A mill that prints silks spins profits with bonuses

Designers at Shanghai's No. 7 silk printing mill receive bonuses that make their pay packets up to one-third fatter than that of the manager. This is one of the fruits of the new incentive plan that has dramatically increased the mill's profits during the past year, according to the manager, Huang Guansong.

The designers are rewarded for their creative work, which has won the mill three gold medals in national competitions.

"Our products have caught up with those of our main competitors -- Italy and Switzerland," Mr. Huang said. And, at a recent Canton Trade Fair, he had the satisfaction of hearing a foreign businessman comment that some of his most prized designs could only have been made in China.

Ninety percent of the No. 7 mill's 3.5 million-meter output last year was exported, according to Mr. Huang. The mill grossed $12 million (US) in export earnings and made a profit of 3 million yuan ($2 million). This was 500,000 yuan ($333,333) more than the previous year.

The No. 7 mill will dye and print silk cloth in any design the customer wants. But 70 percent of its designs are its own. Of these, some of the most distinctive are muted pinks and beiges, with subtle themes inspired by motifs from ancient Chinese silks.

Mr. Huang -- lean, quiet-spoken, dressed in the same ubiquitous blue cotton tunic and trousers his mill workers wear -- tells a story that illustrates both pride in China's artistic and cultural heritage and the political turmoil of the recent past.

When the Cultural Revolution began in 1966, the No. 7 mill, which is a relatively small establishment of 524 workers in the crowded Hongkew section of Shanghai, had enough "veteran workers" to keep the youthful Red Guards from from disrupting production.

But the factory was not allowed to dye and print silk according to designs supplied by foreign customers, nor to turn out the kind of colorful designs that would appeal to foreigners. As a result its exports orders dropped. In 1970 the factory was ordered to turn out designs based on so-called revolutionary operas patronized by Mao Tse-tung's wife. That year practically no cloth was sold to foreign customers.

The following year Premier Chou En-lai personally instructed the mill that it could turn out any colorful designs it wanted so long as they were not "ugly or sexual." A year later archaeological excavations at Changsha in central China uncovered many ancient designs on silk -- "a rich legacy of the Chinese people," Mr. Huang said.

The mill sent its top designers to Changsha to study and reproduce about 12 of the ancient motifs. The designs were warmly received at the Canton fair. But followers of the "gang of four" -- the all-powerful group headed by Mme. Mao -- criticized the factory for "copying feudal rulers." Mr. Huang, then as now the manager of the factory, accepted the criticism. But he continued production , on the grounds that without salable designs the factory would have to close down. To this the "gang of four" had no response, except to grumble that "this factory is good in production, but not good in politics."

That was the kind of atmosphere from which the No. 7 mill emerged as a result of the downfall of the gang of four a month after Chairman Mao's passing in September 1976.

Today, the No. 7 mill can hardly keep up with orders, so popular are its designs. An incentive bonus system was introduced in January 1979, and the mill , which hitherto had had to return all its profits to the state, was allowed to retain 5 percent to finance this system and other improvements.

Overall wages are still set by the state, but the plant can add 5, 10, or 15 yuan per month to individual pay packets as bonuses for work consistently well done. The top designer gets 130 yuan ($86) a month, compared with 90 yuan ($60) a month for Mr. Huang (and 68 yuan average wagen per worker).

The mill is also empowered now to seek bank loans for expansion and modernization. "Our machinery is antiquated but our spirit is good," Mr. huang Said. Because China is still in a three-year "period of adjustment" after the fall of the gang of four, the mill's expansion and modernization plans still modest, and Mr. Huang was reluctant to go into details. But as the national goal of "four modernizations" (of agriculture, industry, science and technology, and defense) progresses, the mill expects to undertake a far-reaching re-equipment program that will eliminate many manual operations and vastly increase productivity without increasing personnel.