Beijing and Local Officials Vie for Control of Private Factory

THE clamor of crashing metal coming from the Yuxin Textile Mill is merely the din of looms, but it could just as well be the sound of clashing bureaucrats.

Officials in the city of Tianmen recently sparred over the red-brick mill and its yellow fields of rapeseed in a political battle that today is being played out across China.

The first volley in Tianmen's drawn-out conflict came in late 1990. In an effort to expand their powers, the central government's Textile Bureau and Industry Bureau annexed more than 70 rural enterprises.

Normally, after such state takeovers the factory directors must surrender many basic decisionmaking powers to bureaucrats.

Although the Beijing-based bureaus spoke of safeguarding socialism, they were driven by nothing more than "bureaucratic gluttony," local officials say.

"The offices wanted to be fatter, bigger, stronger, and more important; they wanted to be able to say, `I am No. 1 in the city,' " says Zhang Anzhi, director of the Tianmen rural enterprise bureau.

The conflict in Tianmen was just one skirmish in the effort by central planners nationwide to recapture economic powers they have lost to factory directors and low-level officials under reform.

Paramount leader Deng Xiaoping since January has sought to subdue "leftist" opponents, curtail the power of bureaucrats, and revive market reforms that would energize the economy. Mr. Deng affirmed reforms allowing factory managers to employ workers, buy raw materials, and sell manufactured goods beyond direct official control.

Still, official abuse of rural enterprises continues, according to numerous reports in the official press.

Even in the reform-minded coastal province of Jiangsu, the Dongtai city government arbitrarily took over a silk-spinning factory owned by farmers, according to the June 4 issue of Farmer's Daily newspaper.

Officials in some areas have seized rural industries only to shut them down. In many cases the officials close the dynamic enterprises because they compete with state industry.

Such abuse has been common since 1989 in Hubei, the native province of the Yuxin Textile Mill. There, state firms have compelled the closure of collective or private companies that compete for raw materials or buyers, says Zhang Yi, an Agriculture Ministry official.

ALTERNATIVELY, officials seize rural enterprises in order to quash the supposed threat to communism from industries flourishing outside the direct control of bureaucrats and party officials, says Mr. Zhang at the ministry's department of township enterprise management.

"These officials do not heed directions from the central government but only act according to their own feelings and ideas," Zhang says.

City officials and managers at the Yuxin Textile Mill say Tianmen officials staged their takeover with one idea in mind: power. By controlling the city's textile factories and other light industries - the heart of the Tianmen economy - the offices would enjoy higher revenue and greater administrative leverage.

For instance, with the Yuxin Textile Mill and the other 70 firms under its control, an administrative office could lay claim to more Communist Party members.

The office could consequently enjoy greater access to manpower and property. It would also gain the $30,000 in annual taxes the industries pay to the rural enterprise bureau, says Zhang Anzhi, director of Tianmen's bureau.

Afraid of losing their administrative heft, reformers in Tianmen thwarted their conservative opponents in mid-1991.

The reformers appealed to the party's provincial committee and publicized the seizure of the plants. They prevailed by highlighting the broad popularity of Deng's changes in the economy.

"The masses support Deng's line and will accept nothing else," says Zhang Anzhi. "They know we are not building poor socialism; we are building rich socialism."