This report examines the evolution of China's labour movement from 2000 to 2004, the changes in government policy towards the labour movement, and the role of the All China Federation of Trade Unions (ACFTU).
Economic, Social and Political Change
The turn of the millennium saw a massive sell-off of state assets in China, which led to the number of private enterprises tripling from 440,000 to 1.32 million in just five years from 1996 to 2001. Accordingly, the proportion of private enterprises among Chinese companies rose from 16.9 percent to 43.7 percent.
This process of privatization was accompanied by severe unemployment, the weakening of the social security system and the widening of the gap between rich and poor. According to official statistics, the lowest income group accounted for 10 percent of China's urban population, about 50 million people. In 2003, surveys estimated that the number of Chinese urban citizens who were dissatisfied with their livelihood was between 100 million and 200 million, while the number of city dwellers who were extremely dissatisfied was nearly 36 million. From 1985 to 2002, the absolute difference in annual income between the highest and lowest income groups increased 20.6 times from 901 yuan to 17, 680 yuan. Moreover, during our survey period, China's labour supply exceeded demand by about 15 million workers on average each year.
The simmering discontent in Chinese society would often boil over into mass protests. Forced removals, enterprise bankruptcy and restructuring, land grabs and government taxation all led to violent protest. For example, in late October 2004 tens of thousands of protesters, angry at forced removals, staged a sit-in at dam construction site in Sichuan. Riot police were sent in and in the ensuing mêlée at least one protester died and many were injured.
While there has been considerable economic and social change, the political environment, despite Hu Jintao succeeding Jiang Zemin as president, has remained stable. Hu Jintao stated that the government should serve and work for the benefit of the Chinese people. However, the government continued to use the pretext of maintaining social stability to restrict freedom of speech, media and assembly. Although the government made it a priority to combat corruption, corruption continued to flourish.
On 1 July 2001, then Chinese President Jiang Zemin stated that the private sector constitutes an important element in China's socialist system, and that private businessmen should be permitted to join the Chinese Communist Party. Since then, private businessmen have wielded considerable influence over all levels of government, and had a significant impact on policy-making and legislation.
China's labour movement
The closure and merger of hundreds of thousands of state owned enterprises in the 1990s meant that China's labour movement was dominated by laid-off workers. Many laid-off workers found it difficult to gain re-employment. And rising unemployment was a key motivating factor for workers protesting against management plans to reduce the workforce.
However, from about 2002 onwards, the labour movement began to change, and an increasing number of migrant workers started to organize protests. Moreover, the scale, frequency and duration of industrial action increased, and labour unrest evolved from random, sporadic outbreaks to regular occurrences. Apart from demanding their economic rights, Chinese workers started to demand their political rights.
Whereas in the past, the Chinese government adopted a harsh approach towards labour movement, often detaining labour leaders, in this study period, the government initiated a softer and more conciliatory approach. Instead of suppressing the movement, the government sought to "educate" and convince workers of its position. Moreover, the government gradually made some concessions to the workers.
Despite the gradual softening of the government's stance, China's labour movement still faced major obstacles: The most significant obstacle was the lack of leadership and organizational ability within the labour movement itself. Decades of a state-planning had inculcated an attitude of dependency in the workers, at first dependency on their work unit and then on government social welfare agencies. In those cases were laid-off workers did organize protests, the local government could often afford to wait out the protest because it posed no threat to the local economy. Tight censorship of the media meant that strikes and protests were not reported nationally, regionally or even locally. The government, in many cases, still adopted repressive measures and management often used the technique of "divide and rule" to weaken disputes where several members of the same family worked in the same state owned enterprises.
China's official labour union
During the 1990s, the ACFTU set up a system of collective bargaining to resolve labour issues. However, the ACFTU only managed to establish a relatively small number of union branches in private and foreign owned companies. Where a union was established, the tripartite system of negotiation (ACFTU, company management and workers) often failed to resolve disputes because the ACFTU was too closely allied to the government and lacked independence. Moreover, the ACFTU would often evade or ignore politically sensitive labour disputes.
There is a huge gap between the stated aims of the ACFTU and what it can actually deliver. The ACFTU should address the needs and aspirations of the workers but in our survey we found that local ACFTU officials often only paid lip service to workers' demands and petitions, and were usually unhelpful and unresponsive.
Conclusion and Recommendations
In September 2004, the central government announced its goal of creating a "harmonious society". However many local governments continue to use repressive measures against the labour movement. More importantly, the Chinese government's "soft approach" has not addressed the root causes of social unrest, namely corruption, social injustice and income inequality, nor has it given the Chinese people more freedom of speech and the right of assembly.
CLB believes the denial of workers' rights will only increase social instability. As living standards increase, ordinary people will become increasingly aware of their rights and increasingly oppose social injustice. Under these circumstances, suppression of people's rights will only exacerbate social unrest.
A major cause of worker dissatisfaction in China is the corruption of local officials. Indeed, the discontent and unrest of Chinese workers has thus far not been directed at the central government, but at specific corrupt local officials as well as unscrupulous and greedy company executives. Therefore it would be a mistake for China's leaders to assume China's labour movement is similar to Poland's Solidarity movement, and adopt harsh measures in response to it. Such a reaction would demonstrate a lack of understanding of the changes in China's economy, society and the actual conditions of the workers.
CLB believes there is still scope for the Chinese government to resolve social unrest in a humane and rational manner. In fact, the struggle by Chinese workers for their rights presents the government with an opportunity. Given that China's workers still trust the central government, the central government should use the rule of law and play the role of an independent mediator as workers struggle against corrupt local officials and the vested interests of capitalists. The government should punish local officials and businessmen who violate the law, while creating a platform for genuine social dialogue among all parties.
As China's labour movement continues to intensify, how should the Chinese government respond? Should the government continue with its old ways of suppression and thus undermine its own legitimacy? Or should it undergo a fundamental change, and create a new balance of power among workers, management and local government? This could be one of the most important choices facing the Chinese government at present.