Striking Chinese miners occupied a town and fought street battles with police for three days in February. The occupation of Yangjiazhangzi, in China’s north eastern province of Liaoning, was only brought to an end after detachments of the People’s Liberation Army (PLA) forced the 20,000 workers to retreat.
The occupation was sparked by news that the workers were to be laid-off as a result of the privatisation of the molybdenum mine and would receive only a derisory 560 yuan ($US68) per year of service as compensation. With unemployment now running at over 30 per cent in Liaoning, the workers knew this was a life sentence of poverty.
These high levels of unemployment are now common across China, but especially in the areas of heavy industry such as the north east. They point to the determination of Zhu Rongji’s government to force through the capitalist restructuring of the large scale industrial sector which was the core of China’s planned economy.
Since 1996, when the government launched the policy, 30 million workers have been sacked from state industry. In its report to the National People’s Congress in March, the government identified a further 10 million jobs that were to be eliminated this year alone. But the workers have not taken this lying down. Reports monitored in Hong Kong estimate as many as 100,00 demonstrations, strikes and other mass protests in China in 1999.
The onslaught on jobs is not the only evidence of Beijing’s commitment to restoration. A recent World Bank survey reported on progress with proposals to break up the planned sector of the economy into “enterprise groups” which would be run as autonomous corporations, state capitalist trusts in all but name. By 1997, 120 of these were already operating and 66 of them were quoted on the Chinese stock exchange.
Lower down the scale, industrial enterprises which were not required for the trusts have been either closed or privatised. This has given managers and party officials the opportunity to line their own pockets either by embezzling unpaid wages or by selling the assets to themselves and their families at knockdown prices and then re-opening for business.
However, there is a limit to how many officials can get their snouts into the trough. When the PLA was ordered to divest itself of all its commercial and industrial interests in 1998, for example, it lost much of the funding for its own wage bill. This is creating tensions and divisions within the party and state apparatus.
Not surprisingly, amongst both workers and officials there are many who look back to the period when their jobs seemed secure. There are frequent reports of Mao Zedong placards being carried on anti-corruption demonstrations in the areas worst hit by unemployment.
Another expression of growing discontent with the regime is the growth of the Falun Gong. This semi-religious cult has spread spectacularly in recent years. Last April, 10,000 members besieged government headquarters in Beijing and this year’s anniversary of that demonstration saw a week of daily protests on Tiananmen Square. The government’s own condemnation of the cult included a recognition that it had gained support within the Communist Party itself.
The government’s first response has been a wave of repression on a scale not seen since the suppression of the Democracy Movement after the Tiananmen Massacre in 1989. However, it has also tried to distract attention by playing the nationalist card.
The recent elections in Taiwan, which Beijing continues to regard as a rebellious province of the mainland, provided an opportunity for a great deal of rhetoric and military exercises. President Jiang Zemin also announced important budgetary concessions to the PLA to compensate for the loss of its industrial wing.
Nonetheless, no amount of flagwaving or financial largesse can alter the consequences of the government’s policies. It is possible that the bureaucratic leaders believe they can maintain an independent role for themselves within a restored capitalist China but, in the long term, that will prove to be impossible.
An inflated and parasitic state bureaucracy was only possible in the past because China’s capitalist class had been driven out of the country after the civil war and its working class was held under the political-military dictatorship of the party. Control of the state economy financed this bloated apparatus but proved unable to develop it beyond the first stages of industrialisation.
Now, as a new capitalist class grows in China and establishes links with those overseas and in Hong Kong, the only viable role for the bureaucracy is as capitalism’s instrument for maintaining the exploitation of the working class. The balance of forces may for some time allow elements of the bureaucracy to survive as the masters of a state capitalist sector but even this is not guaranteed.
The deal struck with the USA to gain entry to WTO will undermine the cohesiveness of the bureaucracy. Particularly the opening up of the financial sector to international banks and financiers will encourage the break up of the trusts that are being created out of the state sector.
The immediate prospect is continued growth of the capitalist sector and increased attacks on the working class in both state and private industry and of increased resistance by the workers throughout China. This will undoubtedly create divisions within the state and party apparatus and some currents will attempt to strengthen themselves by relating to the workers’ struggles.
However, what the working class needs above all is political independence in the form of its own party. A revolutionary party in China must be built within its day to day struggles, drawing not only on the experience of the anti-bureaucratic struggle of the last ten years but also on the lessons of restoration in Eastern Europe and the former Soviet Union.