China: Workers convicted for resisting robber barons


On July 29, three leaders of a 29-month factory occupation in the city of Chongqing, in China's southwest Sichuan province, were each sentenced to suspended prison sentences of 18 months.

In a rare move, the official media and websites reported on the case a few days later, while the full story of the struggle was presented in a three-part article by Chen Tanqiang, a former deputy editor of Guangming Ribao, a Communist Party paper, uploaded onto the website on November 11.

In December 2005, when the factory's new owners, Modern Electric (Hong Kong) Co Ltd, refused to speak to the workers' representatives, they sealed all of the exits of company's Chongqing office by welding shut the security grills, preventing 11 managerial staff from leaving the building.

While this action was rather unique, the issues behind the factory occupation have been common to many of the labour struggles in China since the Beijing regime escalated its pro-capitalist privatisation drive in the mid-1990s.

The story started in 1998 when the 44-year-old collectively owned Chongqing Washing Machine Main Plant, with a work force of 880, was taken over by the partly US-owned Heifei Rongshida company based in China's eastern Anhui province, and renamed Chongqing Rongshida.

According to a report by the Chongqing-based Beibei Chartered Accountants, Chongqing Washing Machine had a net asset value of 47.8 million yuan (US$6.4 million) in the months before the takeover. Under the deal, Heifei Rongshida agreed to invest 30 million yuan in cash into the plant in addition to 8 million yuan of equipment and 12 million yuan of "intangible assets". Not knowing the financial details, the workers raised no objection to the deal.

Then out of the blue on March 9, 2004, Chongqing Rongshida's workers were informed while at work that their plant had once again changed hands, having been "sold" for one yuan to Modern Electric and renamed Chongqing Meiyi Electric.

The workers began petitioning to many different government authorities. But, receiving no response, they started occupying the plant.

In August 2005, the Meiyi management filed a lawsuit against seven workers for 800,000 yuan worth of alleged damages in addition to legal costs. These seven workers happened to be on roster to defend the factory occupation on July 25 of that year. According to the August 29, 2005 Chongqing Xinbao, the lawsuit was preceded by many unsuccessful attempts by Meiyi personnel to break the workers' occupation, especially in the three months before the lawsuit.

In November 2005, 502 of the plant's workers initiated a lawsuit against Heifei Rongshida, accusing it of unlawful appropriation of their factory in 1998 and demanding compensation equivalent to the plant's 1998 asset value. However, the court refused to accept the case on the pretext that the workers were not commercially recognised "legal persons", unlike shareholding individuals and companies.

According Chen Tanqiang's account, the workers' occupation was finally broken on August 29, 2006, by a joint force of local police, Meiyi's security personnel and some hired thugs.

In a July 7, 2006 letter by 568 of the plant's workers to the Chongqing municipal authorities, the workers revealed that some 80% of the plant's work force had been on roster for more than two years to "defend the plant" while not having any source of income.

According to Chen, the workers pointed out to Chongqing journalists that asset evaluation hadn't yet included the 42,437 square metres that the plant was sitting on, which has an estimated current market value of 50 million yuan. They pointed out that the plant's 48.7 million yuan of net asset value should have been recognised as an equity contribution in the 1998 deal, making the plant's employees half owners of the new firm, rather than the whole enterprise being gobbled up by Heifei Rongshida.

According to decree No. 139 of 1998 of the Chongqing municipal government, Chongqing Rongshida was entitled to a tax holiday of various sorts for up to five years. The 2004 sale of Chongqing Rongshida seemed to have been timed to coincide with the end of the tax exemption.

For four decades after the 1949 anti-capitalist revolution in China, workers employed by the state-owned and collectively owned enterprises had been instilled with the idea that those enterprises were publicly owned and produced for the people as a whole. Workers had a say on major decisions in the running of the enterprises through regular workers' assemblies within these enterprises.

The residual sense of collective ownership among many such workers now clashes with the capitalist legal framework in operation in China, where private shareholders and companies can buy and sell factories without any say by their workers.

In an attempt to justify the robber-baron approach of the city's rising capitalist class, Wang Yang, secretary of the Chongqing Communist Party municipal committee, told a December 2006 meeting of the managers the city's capitalist "people's enterprises" that any "irregularities" committed by their owners in their emerging stages were akin to innocuous "birth marks" that should be forgiven and forgotten.

This year, Yang was elevated to the ruling Communist Party's central leadership body, the 25-member Political Bureau.

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