China faces growing labor unrest

Workers in Liaoyang are threatening to march again this week if protest leaders are not freed from jail.

The main road into Fushun in China's northern "rust belt" is lined with weedy factory yards and brick buildings so crumbled it appears a marauding army passed through.

Last week, as part of a large wave of labor protests in northern China, an army did twice block this road – an army of 4,000 to 10,000 xiagang, or laid-off workers, from heavy industries that were once the pride of China's command-and-control economy.

As many as 80,000 idled workers in Fushun and two other cities have taken to the streets recently.

Silently, illegally, like xiagang in nearby Daqing and Liaoyang, Fushun's former coal, cement, steel, and petrochemical factory employees marched to government offices, braving police and demanding living allowances they say stopped months ago. Late last week, Fushun officials dispersed the crowd by distributing about $9 to each protester.

In the rust belt, a deeply felt sense of grievance and fear is fodder for a potential mass movement not seen in China for many years. Such protests alone are not new. What's new is the combination of factors: the numbers of protesters, the cross-factory dialogue among workers, the simultaneous nature of the protests, a set of demands with a political edge to them, and unrest in the model Maoist city of Daqing.

China may have defused the protests, but it has yet to report them in its own media – evidence, experts say, of the level of sensitivity among officials to any independent activity outside Communist Party lines.

"There is a real sense of crisis," says one laid-off Fushun worker who sells statuettes carved from black amber, a local stone. "In the Mao era, people had security."

As China shifts to a market system, hundreds of inefficient state-owned enterprises have closed. The Tiger Platform coal mine in Fushun laid off 24,000 of 30,000 miners two years ago. Economists in and out of China agree such industries must go. But the "buyout" methods are leaving millions of unemployed, like those in Fushun, facing a threadbare future, even as they watch on TV – and on the streets – a new generation of Chinese, sometimes old bosses and their families, flaunting flashy new cars and cellphones, and spending wads of cash on shoes that would buy groceries for two years.

As industries close, a generation of the proletariat,raised under communist ideology to believe they were the "masters" of the country, now feel at the mercy of bankrupt companies and cash-poor municipalities.

For years, idled workers were designated as xiagang, a category meaning "laid off but not officially unemployed." The factory had to pay them a stipend of $30 to $55 a month. But under a new policy of factory buyouts that began two years ago, workers got a lump sum calculated according to the number of years worked. Once the buyout is finished, the factory no longer has responsibility. In Fushun, 20 years in the coal mines yields a buyout worth about $4,400.

To a simple worker, such lump sums seem mind-boggling. Yet, the jobless are now finding that in the new China, they must pay roughly $1,900 a year in costs never before anticipated – heating and medical and pension insurance, formerly paid by the state.

"They've been raised to eat from the iron rice bowl," says a Western diplomat. "Now you are hearing the shattering of the last vestiges of that rice bowl."

In Liaoyang, where four xiagang were arrested for organizing workers, a center of the protest is found in a tiny alley lined with by dormitories of the now defunct Ferro Alloy plant. There, on March 5, behind a stand of apples and mandarin oranges, workers posted four tabloid-sized white sheets.

The first is a letter to Chinese President Jiang Zemin, signed by "The workers of the bankrupt Ferro Alloy plant." The second is a letter to the provincial government of the Province of Liaoyang. The third is an open letter to city residents that begins sarcastically, "People of Liaoyang, did you have a good lunar new year?" (China's new year is in February.) The fourth is a lengthy and detailed list of the violations by Ferro Alloy leaders of their responsibility to the workers, including buyouts that were far too low. (Twenty years in the Ferro Alloy plant yielded just over $2,000.)

In colorful language, the workers describe the "infestations of decay of factory leaders.... They are corrupt worms."

The sheets are still there, indicating for whatever reason – sympathy or fear of more unrest – that police have not yet decided to remove them. Next to the sheets is a large pink poster calling on the workers to gather at the factory gate.

The leader of the Liaoyang Ferro Alloy workers, Yao Fuxin, disappeared into a police van last week. Police nabbed three other organizers from the middle of a crowd two days later. Mr. Yao's wife says that the Ferro Alloy workers have decided not to protest today but that they would return to the streets tomorrow if the four men are not released.

Worker protests in China often coincide with the meeting of the relatively toothless "People's Congress" in Beijing – where party-appointed representatives of China's districts meet for a national discussion. They also tend to rise at the end of the winter, often bitter in the northeast – a time when workers pay their heating bills.

In Liaoyang, the xiagang protests were also sparked by a former city leader's televised comments during the People's Congress that in Liaoyang there were "no unemployed."

Protests in Daqing are significant because, under Mao, the city was China's top model of heroic industrialization. "In industry, learn from Daqing," was a famous slogan. Amid harsh conditions, workers carved out China's first oil field, which kept the country heated and self-sufficient until the 1980s. During the Cultural Revolution, movies extolled Daqing, a name that was given to the city in 1969, meaning "big celebration."

But many observers doubt that the workers' restiveness will lead to an organized or independent movement. Party political officials have proven adept, as in Fushun, at quieting passions with a variety of monetary compensations. Party security officials show that they can easily nab any grass-roots leader who stands out by taking an independent course of action.