By JOMO and BaoYunCheng
Two major incidents in China have grabbed international headlines recently. First are the workers protests, occupations and strikes against the privatization that took place in Jilin and Anyang. Second, are the inter-ethnic rebellions in the Xinjiang Autonomous region, also known by some as East Turkestan. The authoritarian measures taken by the Chinese state further fanned the discontent and violence. That both of these actions have been sparked off by incidents taking place in factories, initiated by workers, is worth noting. It raises some questions to be asked about the challenges that lie ahead of building a working class movement in China.
In an effort to increase profitability, the Chinese state has started to privatize and sell off many state-owned enterprises, and its impact on workers is glaring.The guarantee of jobs and benefits to state employees had, for many years, prevented the state from realizing its maximum profitability. As global consumption and demand for Chinese products have declined with the recession, the drags of paying out benefits and protecting jobs have only been exacerbated. Thus, more and more state-owned enterprises have fallen into the ownership of private companies. Concretely, privatization has led to massive firings of long-time workers, while those remaining have experienced increased workloads, work speed-ups, decreased wages, and the elimination of benefits. For those reasons, China has seen a rapid increase of working class resistance against privatization.
On July 24, 2009, some 30,000 workers and retired employees at the state-owned enterprise of Tonghua Steel as well as their families staged a massive strike to protest against the decision of the provincial government of Jilin to sell Tonghua Steel to the private firm Jianlong Steel Group. The owner of Jianlong Steel, Zhang Zhixiang, has been acquiring large and medium-sized state-owned enterprises at low prices and then expanding and developing them. In the process, he has been amassing incredible wealth (his own personal wealth estimated to be over 20 billion RMB), soaring to become the country’s tenth richest man. Tonghua Steel was for a time, managed by Jianlong in 2005 but later resold in March 2009 following successful worker demonstrations and unprofitability. During Jianlong’s ownership (and in contrast to Zhang Zhixiang’s personal wealth), experienced workers with more than 20 or 30 years of work saw their monthly salary decrease to around 300 RMB, whereas new management was constantly hired from the outside and awarded with high salaries. The CEO of Jianlong, Chen Guojong, had an annual income over 3 million RMB. Thus, when in June 2009 Tonghua Steel began yielding profits again (specifically 60 million RMB in revenue that month), Jianlong began talks to reacquire Tonghua Steel. It is in this context that the massive turnout to the July 24th strike must be understood. By the afternoon, workers had violently clashed with armed police and fought with managers, ultimately capturing the CEO Chen Guojong and beating him to his death. By 10:00pm, the 30,000 strong contingent of workers had occupied the factory zones and refused to retreat. Because of this immense pressure, the local government, which had given Jianlong the consent to reacquire Tonghua in the first place, reneged on this consent and declared through the media that Jianlong had decided to quit from Tonghua Steel.
On the same day, July 24, 2009, the 30-year-old state-owned enterprise in Anyang (Henan province), Linzhou Steel Corporation (LSC), was sold to a private firm. Following the takeover, massive layoffs ensued, with workers getting only 1,090 yuan ($159.50) for each year of service they had put in. By mid-August, thousands of workers and recently fired employees stormed the streets to protest the takeover. By the fifth day of the protest, August 14, workers captured a government negotiator and held him hostage for 90 hours, forcing the provincial government of Henan to intervene and overturn the sale of LSC.
A few days later, on August 22, 2009, 5,000 workers at four coal mines in Hunan province, Central China, started to strike over a proposal by the local state mining entity, the Jinzhushan Mining Industry of Hunan Coal Group, to become privatized and listed on the stock market. In order to attract private patrons, the Hunan Coal Group waived from the contract the legally required compensation of one month’s pay for each year that workers put in. The striking workers, mindful of the two abovementioned protests, declared to the Hunan Coal Group, “We have not beaten anyone, we have not detained anyone, and we have not destroyed any company property. All we want is an answer.” The struggle in Hunan continues today, with the company forming a “mine protection brigade” to intimidate and attack strikers and the local government threatening to arrest the strikers.
Another attack on the workers mounted by the Chinese state, did not however, result in the same inspiring sense of unity that the steel workers sparked off. In recent years, China’s strategy to keep a downward pressure on wages and to ensure economic competitiveness has been to transfer ethnic minorities from the West to coastal regions in the East to work. Since 2002, a government-sanctioned rural migrant-worker program has shipped 100,000 people annually from the Xinjiang Uyghur Autonomous Region to the Eastern coastal regions of China to work in factories. Most of these migrants are single women who range in age from 16 to 25. In the first half of 2009 alone, over 96,000 people from southern Xinjiang alone, most of whom were Uyghurs, were transferred to Eastern factories as part of the program. Chinese government authorities have praised this program as a “major means of poverty reduction” for the people of Xinjiang, not a total lie when you consider the average income in Xinjiang is 540 yuan per month. On the other hand, any increase in income from working in coastal factories is more cursory than substantial, with the average being 850 yuan ($125). To add insult to injury, Chinese government official Huang Yu states that the transfer of ethnic minorities from Xinjiang to Han-dominated areas of China, and their interaction with Han Chinese, would make “them [minorities] more open-minded, which is definitely good for their personal development.”
This line of reasoning is hardly foreign to the ethnic minorities of Xinjiang. In 1956, Mao Zedong was calling on China’s youth to “open up” and develop the West. In one fell swoop, 200,000 soldiers came in and occupied Xinjiang. Fast forward four decades and we see the same colonialist mentality used to justify the wholesale displacement of Xinjiang ethnic minorities—this time permanently from their land—to work in the far away coastal regions.
Instead of Huang’s suggestion of a cross-cultural interaction that is “definitely good for their [minorities] personal development,” though, the reality has been an exacerbation of inter-ethnic conflict between the Xinjiang natives and the Han Chinese. For capitalists in the Chinese coastal regions, demand for migrants is at an all-time high because worker compensation is at an all-time low. As more migrants enter the coastal workforce, locals remain unemployed. Because of their longer service in the workforce, local workers, mostly Han Chinese, have come to expect relatively higher salaries and greater benefits, all of which translates into decreased profitability for factory owners.
For the capitalists, ethnic tension among workers is key to their continued functioning. Quite recently, on June 26, 2009, a brawl between Han and Uyghur workers occurred at a toy factory in Shaoguan, Guangdong Province. This sparked massive riots by Uyghurs in Urumqi, Xinjiang, that resulted in some 200 deaths. Most recently in September, some Uyghurs allegedly stabbed over 530 Han Chinese in Urumqi with syringe needles, the content in which are yet to be known. As long as racism translate into workers busily fighting each other, the capitalists remain safe from a unified working class intent on wresting control of the workplace from the managers.
Within a summer, we see the both cases of inspiring unity, and also the glaring contradictions of inter-ethnic conflict within the working class. What are the challenges to building a unified working class in China? The Chinese state was founded on the belief that ethnic minorities will come together to modernize the country. It has become code word for the Chinese army to occupy ethnic minorities homelands — such as Tibet and Xinjiang. Western, liberal racist conceptions of human rights recognize that there is a problem, but they ultimately serve as apologetics for US intervention, and many tend to collapse of all Chinese workers (1.3 billion!) into the authoritarian Chinese state, leaving no room, and having no analysis of workers agency and struggle. How can we chart another path, where the first foot forward is anti-racism, anti-Han chauvinism, and also the liberation of all working people in China including ethnic minorities? In the US, we have seen white supremacy divide the working class, preventing white workers from uniting with the demands of Black, Brown and Asian workers. Is Han supremacy also at play in creating divisions between Uyghur and Han workers in China? What are from-below, grassroots, non-statist examples of where these ethnic divisions that translate into divisions within the working class, have broken down?
Here are some broader points I have been thinking about in terms of China, the economic crisis, and comparisons with the United States.
1. It seems while the United States has been imposing austerity on its own working class, there has been intense lobbying and discussion in magazines like the Economist and in interviews with Charlie Rose over the need to raise the buying power of the average Chinese worker. This translates into increased wages. This is tied to the recognition of the CCP that they cannot live off exporting to the United States forever. They are witnessing first hand, in the last two years, the dangers of this deep recession. They are also seeing the flight of foot of capitalism where sectors of it have relocated to Vietnam and Bangladesh and even interior China where wages are lower. While appearing contradictory, this makes sense. My hunch is that it could give the Chinese capitalists to let commodity productions which don’t make much profit relocate, even out of the country if needed, and to move up the commodity chain into mid and high-tech goods.
Here is an important graphic on p.24 which demonstrates wage increases on the coast of China. http://libcom.org/files/china.pdf
2. We can also see government intervention, its scale, and its effectiveness differ in the two countries. Healthcare is the most clear. In the US, it is pretty clear that there is little political will for a comprehensive health care system. Instead, a sham plan is being cooked up where most working people will be looted to line up the wallets of health insurance companies and providers. In contrast, the last time I read related material on China, there was discussion along the lines providing some type of healthcare to millions of people so it can free up their wallets. In other words, if you know the government is not going to provide a penny when you get sick, you tend to save more, and buy less dvds and other fun items. This is one dimension among others tied to the need to start a real domestic economy of China which can make it more independent of exports.
3. These realities are further sharpened by the growth of Chinese economy (regardless of the inaccuracies of the data the CCP releases) compared to the contractions of Western Europe, Japan, and the United States. I don’t believe the Chinese capitalists or state are any nicer or more progressive than the United States.
Perhaps one way to look at this question is are we seeing the birth of a new powerful capitalist state comparable to what we saw of the United States from the 1900s to the 1960s. This has important implications because it gives space for working people to fight for gains and at the same time–in the most economics sense–room for the rulers/ capitalists to throw a few dollars worth of concessions to workers. This might explain the reality that there have been thousands of strikes in China and yet no revolution. Strikes not being synonymous with revolution is something I have had to learn about. Workers can win strikes on a case by case basis and it looks like that is happening in China because of the political-economic moment. This has reformist and revolutionary implications. The experience of the US, compounded by a Stalinist-left and other tiny revolutionary organizations is the former. At the same time, I still do not believe a boom period in capitalism does not close off chances for revolution.
Meanwhile, is the US a declining capitalism where the capitalists are squeezing their working class worth every penny because their profit rates are so low, they have truly become a vampire. As far as I understand revolutionary politics, this has important implications for reforms, solitary strike actions versus more militant demands and the need to link up and fight on a national basis the way the rulers are attacking working people. The rulers in the US are desperate to keep their number 1 position and are arguably less likely to give scraps to workers unless workers change their posture on a national scale not seen since the 1960/ early 70s. The challenges to revolutionaries are real but I also believe that only revolutionary perspectives can give plausible solutions to the crisis humanity faces today.
Either way these are just preliminary thoughts as I look at these two countries in this economic recession and political crisis.
Good insights Will. With the stimulus packages, it does seem that the Chinese state sees domestic consumption as a priority and has accordingly subsidized rural residents to purchase ovens, microwaves, etc. Concomitantly, it may be easing the restrictions on rural-migrant workers from permanently settling in cities. If this goes through, it would provide Chinese industries with an influx of new consumers with money to spend on commodities rather than regularly traveling to and from rural areas.
At the same time as a new consuming ‘upper’ tier of a working class is created though, China is redoubling its efforts to get ethnic minorities from the West to work for cheap in Eastern coastal factories. This new ‘lower’ tier of working class is important for China to sustain its global competitive edge, especially considering other more exploitative areas in SE Asia. What will happen to the former Han Chinese workers in these areas though? Are they going to be bumped up to the ‘upper’ tier of working class? Ethnic conflict in the Eastern Coastal regions suggest that this has not been the case. Can China survive the economic crisis by relying on consumption by state bureaucrats and the ‘upper’ working class alone? Or will the Han Chinese who are displaced by ethnic minorities from the West eventually be bumped up a tier?
What are the new industries that will emerge to encompass recently laid off workers if nonproductive sectors are relocated to SE Asia?
How can working class solidarity be achieved in light of these real ethnic divisions?
Great points Will and great questions BYC… I’ll try to take a stab at this one:
“Can China survive the economic crisis by relying on consumption by state bureaucrats and the ‘upper’ working class alone? Or will the Han Chinese who are displaced by ethnic minorities from the West eventually be bumped up a tier?”
I imagine that the state wants to “engineer” a middle class consumer base through programs like health care, easing the relocation laws, etc. as folks laid out.
At the same time, wages on the East Coast of China are being driven up by strikes, occupations, folks kidnapping their bosses etc. The state is probably not thrilled about this mass activity but it provides an opportunity for them to kill two birds with one stone. They can buy off a layer of the insurgent workforce through wage increases, dividing them from lower paid migrant workers from the countryside and from ethnic minorities. This can create an aristocracy of labor similar to the white skilled labor base in the US which has historically been coopted into busines unionism and US nationalism. This divides the class and gets the upper layer of the class to help police the lower layers on the basis of race rather than uniting to fight the bosses. At the same time, it also creates an expanded consumer base for domestic industry. All of this is very similar to what the US did with the New Deal and Keynesianism.
If the types of insurgency outlined in your piece continue I do think that the Chinese state might have to incorporate more of the Han workers in mid to lower skill level jobs, including migrants to the cities, into a slightly higher tier in order to keep order. They may not want to – it might not always make pure economic sense to do so, but they’ll at least need to pay them marginally higher wages then ethnic minorities if they wish to really create a caste system that can help prevent a unified workers movement.
I wonder how much the Chinese rulers study the US and white supremacy here as a model. I don’t want to overemphasize this – China is a different country and the state there has developed it’s own unique methods of social control…. but at the same time, I do think it’s a useful analogy. In the US even unskilled white workers were given marginally better wages then workers of color in order to maintain the political coherence of white supremacy.
Incidentally, as Will suggests, it is these kind of co-optation methods that are starting to break down a bit in the US but are more of an option for the Chinese state. In the US a contracting capitalist system can’t dish out the kind of “reforms” and/or reactionary patronage that make people satisfied to go home and keep slaving away. For example, the bosses can no longer afford to buy off white workers in small rustbelt towns who are no longer central to their profits… they can’t invest in a largely political project of maintaining white supremacy for the sake of social control… so many of these white workers are polarizing. Some of them, like the lumpen white kids in my classes, are starting to identity with people of color because they are starting to face similar issues of unemployment, police brutality, etc. and they find that youth of color understand them better than White America does. Other white workers are moving to the far right , buying into an insurgent white supremacist populism that holds out the false promise of restoring their privileges.
Of course, there is no automatic reason why the Chinese working class will go the same route as the US working class…. workers may overcome these emerging ethnic and teir divisions in the workforce, the state might not be able to dish out enough patronage fast enough, the economy as strong as it is might not grow fast enough to incorporate the flood of people displaced by primitive accumulation in the countryside. We’ll see. One thing is for sure though – the Chinese working class is at the center of global class struggle today and all eyes will be on its next moves.