Mao's promised land ends in sweated labour

As China's Prime Minister arrives today to meet Tony Blair, Jonathan Watts in Beijing examines how its economic miracle is built on employers who fail to pay wages, ignore safety rules and discard workers at will

Sunday May 9, 2004
The Observer


Overworked, underpaid and about to lose his job, Huang Zungkun must wonder how the socialist revolution in China ended up creating one of the world's most ruthlessly capitalist states. Not that he has any time for reflection. Like many of the 100 million workers who have powered China's spectacular economic growth, Huang spent his days from dawn to dusk on a construction site for less than 30p an hour.

But - just as typically - the 37-year-old carpenter was laid off, victim of a labour market so overflowing that employers wait months to pay wages, ignore safety regulations and discard workers at will.

In a sign of the transformation that has enriched - and unbalanced - the world's most populous nation, Huang's last day at work was May Day, once a celebration of the peasant movement that propelled the Communists to power in 1949. This month, president Hu Jintao visited a factory to praise 'model workers' for their contribution to China's development. But the party's roots are increasingly belied by a divided society closer to Engels's reports of sweatshop industrialisation in 19th-century Britain than Mao's vision of a proletarian utopia.

Huang left his wife and three children to work in Beijing because he could not support them as a farmer in Henan, one of China's poorest provinces. For seven years he has moved from job to job, helping to build luxury apartments designed for foreigners and China's middle class, many the families of party officials. He earns 14 renminbi (RMB 'People's currency'), equivalent to less than 1, for each square metre of woodwork he completes. If he wakes at 4am and finishes late, he can earn about 56 RMB. If he avoids a gap between jobs, he can make about 9,000 RMB (600) a year, the national average wage.

China is a labour buyer's market, with an estimated 94 million migrant labourers. Next year, 24 million people will come of age into a workforce where eight million are already registered jobless. In the countryside, where 800 million people live, it is estimated 80 per cent of men are underemployed.

On the construction site where Huang works, labourers have no contracts or monthly wages. They are promised money at the end of the year, before which they have to borrow from their bosses for lodging in a disused factory where 20 are crammed into each small, fetid room, sharing wood-slatted beds and lining up with cups and bowls for rice, soup and sometimes meat, for which they pay the bosses 33p a day.

There is a risk that wages, accumulated over months, even years, may never be paid, because developers run out of money or fail to find tenants. Mao Yushi, director of the Unirule Institute of Economics, estimates that delayed payments run into billions of dollars. 'When workers fail to get their salaries on time, they have little choice but to keep working in the hope that the money will come,' he said.

Every revision of the constitution since the start of free-market reforms 25 years ago has shifted the balance to capital. In 1982, the right to strike disappeared on the grounds that everyone was employed by the state, which represented the people. This year, the National People's Congress recognised property rights for the first time and enshrined former president Jiang Zemin's 'Three Represents' theory, which acknowledged entrepreneurs. The party still claims to represent workers so says unions are unnecessary. But the official unions do not want to upset contractors, who often have ties to Communist Party officials.

The result gives tycoons all the freedoms of a Western nation to pursue profits, but none of the democratic restraints from unions, free press or accountable government. Lured by cheap, unregulated labour, foreign investment has flooded into China while domestic entrepreneurs are ramping up production at such a pace that the government fears the economy will overheat.

The United Nations has commended China for lifting 400 million people out of poverty, but the 'iron rice bowl' of secure state employment has been smashed, peasants have no health insurance and the government has warned of a breakdown of public order if the economic growth rate falls below 7 per cent.

'In theory, the laws to protect workers are sufficient, but there is a gap between law and reality,' said Gao Zhisheng, a labour lawyer. 'In Western countries, there is a lack of balance between the power of capital and labour, but in China, that imbalance is far greater.'

With no means of collective bargaining, labourers must resort to petitioning the government, expensive lawsuits or - increasingly - violence. While rarely reported by the domestic media, illegal industrial protests are rising. Last week, 10 factory workers were arrested in Guangdong province for turning over a car and destroying company property after their Taiwanese bosses ordered them to move to an 11-hour day with less overtime. In February, nine arrests were made after 1,000 laid-off workers in Suizhou City, Hubei Province blocked a train line and occupied their bankrupt textile factory.

'There has definitely been an increase in these kinds of cases. We hear about them almost daily,' said Robin Munro of the China Labour Bulletin, a Hong Kong-based group. 'Workers have no one to turn to because they cannot organise and settle grievances peacefully. It is very short-sighted of the government.'

The alternative is to petition the government. This has less than a one in 100 chance of success, but that does not stop aggrieved peasants seeking justice in this traditional way.

Zhang Liying has been petitioning outside the government offices in Beijing for five years. He was laid off in 1996, when his state-run paper factory was privatised, migrant labourers replacing the old workforce. The union was closed and the local government never honoured its promise to pay him compensation. 'As workers, we surely need more laws and policies to protect our rights,' said the 35-year-old. 'But, even if the rules were changed, local officials would ignore them.'

Petitions and violence may not succeed, but the effect has been to alarm the authorities. After two decades of pursuing growth at all costs, the government appears ready to accept that runaway capitalism must be reined in.

Prime Minister Wen Jiabao has called for 'balanced development' that places a greater priority on social justice, the rule of law and the need to address the growing gulf between the urban haves of the wealthy Western seaboard and the have-nots of the impoverished rural interior.

His government has eased permit regulations and police crackdowns, as well as pumping billions of dollars of investment into the poorer inland regions.

But the sheer weight of China's 1.3 billion population means that economic growth overshadows social justice. So, in a quirk of history, China's Communist Party finds itself aiding, abetting and participating in an exploitation of workers on an unprecedented scale; it is certainly not a triumph of the labour movement.


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