By Phil Clarke
China's economy, which as recorded more than 13% growth in 1992 and 1993, is the fastest growing in the world. Despite that, it is a dramatic example of the dictum that, without a profound change in the social relations of society, economic growth alone cannot improve the conditions of the working class.
Economic growth in china is being accompanied by an attack on fundamental reforms made during the Chinese revolution. The attempt to move to a market economy is resulting in millions of workers being made redundant and a huge growth in the numbers of rural and urban unemployed.
In 1993, in Heilongjiang province alone, more than 2 million workers were sacked. Private entrepreneurs are replacing state-owned firms with thousands of sweatshops with low wages, long hours and unsafe working conditions. Child labour, illegal in China, has grown to epidemic proportions and the number of workers killed or injured in industrial accidents has risen dramatically.
To make matters worse, the 13% economic growth is accompanied by an inflation rate? at around 20% a year, which is eating away at the livelihood of every worker.
Chinese workers are not taking this offensive lying down. Since March there have been major strikes and go-slows in Shenyang, Dalian, Hengdu, Shenzhen and other major cities.
Labour unrest is particularly acute in the north of the country where much of the state-owned heavy industries are located. More than 300 strikes and protests occurred in March and April in the north eastern provinces of Anhui, Heilongjiang, Gansu, Liaoning, Shaanxi and Sichuan.
Some of the strikes lasted more than 40 days and involved more than 200,000 people. According to the China Labour Bulletin there have been two huge demonstrations involving tens of thousands of people in the industrial towns of Harbin and Qiqiha'er, both in Heilongjiang province. One report said that some workers committed suicide in front of government officials, while others chanted "We want to survive, we want to eat".
Nothing scares China's Stalinist leadership more than organised labour protests. Some of the harshest prison sentences doled out after the 1989 Tienanmin Square massacre were against the organisers of the Federation of Autonomous Trade Unions.
Communist party leaders have attempted to buy off the present wave of protests by extending unemployment benefits and passing new laws protecting workers' living conditions. However, these reforms are largely symbolic.
Another ploy has been to heap the blame on "foreign entrepreneurs" and to encourage unionisation of new enterprises by the tame official All-China Federation of Trade Unions. But "unofficial" labour activism is still being harshly repressed and workers' demonstrations brutally broken up.
More than two thirds of all Chinese still work in state-owned industries, giving the lie to claim by many ex-Maoists that capitalism has already been restored. Nonetheless, China's leaders aim to subordinate the state sector to the "laws of the market" by making them compete against deregulated private firms. Official government estimates claim that 20 million of the 109 million state workforce are "surplus to the requirements". Others say that this is a massive underestimate.
The structure of employment will change drastically as the "iron rice bowl" is gradually broken.
Up to 40% of government workers are employed by "non-core" enterprises which have been allowed to close down on financial grounds. In China's huge economy this is a tiny number. For the moment the central bank is continuing to pay subsidies to state enterprises. But this cannot continue as long as the rules of the market are applied.
According to the State Statistical Bureau, 34.2% of all state firms made a "loss" in 1992, and that figure had increased to 49.6% in 1993. With a state budget deficit of $15 billion and the potential for huge numbers of bankruptcies, a new clampdown on central government subsidies is in the offing.
Official statistics claim that unemployment in China is 2.6%. But these figures do not include around 200 million "surplus" rural workers, unable to find jobs. Mechanisation and the vastly improved efficiency of agriculture since the 1979 reforms have created a rural employment crisis.
An estimated 30 million people have drifted from the countryside to the cities and become the new urban poor. These unemployed and forced to survive a squalid existence in ghettos and in the coastal towns. About 30 million, or 5% of the workforce, work in foreign-owned firms; 10 million new workers come onto the labour market each year.
As a result of this the social fabric of China is rotting. Corruption amongst national and local party cadres is rampant, and law and order is totally breaking down. The police are deeply involved in criminal activities in every major city. Travellers are regularly shaken-down by roaming gangs, and a culture of violence and street-gangs has developed amongst youth.
The only response from the Communist Party leadership to this growing crisis is repression. However, with corruption and crime so all-pervasive, this repression is ineffective.
The general economic model promoted by Deng Xiao-ping's regime is "market stalinism" — market reforms plus an increasingly authoritarian police regime with the Communist Party trying to stamp out all dissident activity.
Each year the number of death sentences and those sent to labour camps increases. Last year there were more than 2000 executions, while there are more than 1 million in the labour camps.
While trying to keep tight control, the CCP leadership has in fact created an explosive cocktail. Mass unemployment and growing inequality in the cities and the stagnation in rural incomes will see the strikes and demonstrations of recent months be repeated.
This social chaos is compounded by conflicts inside the ruling bureaucracy, especially between the regional leaderships of the special economic zones (the sector for much foreign investment) and the central government.
Unless the Chinese workers are able to forge a political alternative to challenge the ruling bureaucracy's rush to destroy the collectivised economy with its associated gains for the workers, a unified Chinese state could collapse into civil war between regional bureaucratic warlords.