China: revolution in preparation

Phil Mitichinson reviews the increasing difficulties in the road to capitalism in China, the recent workers' uprisings and concludes that "in the next period internationalcapital will feel the ground quake under the impact of millions of Chinese workers on the move".

One fifth of the world's population lives in China. "Before the 1949 revolution there were "half a billion Chinese, and perhaps half of these ran a real risk of going hungry. Today the population is 1.3 billion but only perhaps 50 million are so poor that they cannot always eat as much as they want." (The Economist, April 8, 2000).

Without disputing the 50 million figure (it's probably higher), it cannot be seriously argued that this is communism, a society where Marx argued everyone would give according to their ability and receive according to their needs.

Yet the advances made since the abolition of capitalism and landlordism are nevertheless very important, as even these disturbing figures demonstrate.

The colossal waste, inefficiency and corruption inherent in bureaucratic rule however, now threaten these important gains. The remarkable strides forward made since 1949 are a direct consequence of state ownership and central planning in spite of the role played by China's leaders, who have been responsible for such disasters as the famine caused by The Great Leap Forward from 1958-61 and the tragedy of the Cultural Revolution from 1966-76.

In an effort to maintain their own privileged position the Chinese bureaucracy are today preparing a new disaster of the same epic proportions by attempting to move in the direction of restoring capitalism. Having witnessed the chaos caused in Russia, however, they have been trying to proceed more cautiously, with strict central control. In the words of The Economist "Reforms have not been as disastrous as in Russia, where the theft of state assets is an honoured pursuit; on the other hand Russia launched a full blown programme of privatisation, which China is wary of copying. So Chinese officials and managers have had to use more imaginative alchemy to turn state assets into private property. But whatever the method....what has been done to transform national assets into private wealth in China is little different from what Ferdinand Marcos did in the Phillipines, or what ex-President Suharto's cronies did in Indonesia."

Many western economists would have one believe that China's growth in recent years was due to the elements of capitalism introduced and in spite of the remaining state sector.

On closer examination, however, we discover that the state sector has remained dominant in terms of size and specific weight, ie the nature and importance of the sectors remaining in state hands. Even The Economist now admits "At the height of the euphoria about China in the early 1990s, some observers - including The Economist - thought the private sector might already account for as much as 75% of the economy. That was far too optimistic, and the mood may have swung too violently in the opposite direction: some people now put the private sector at only 25% of total output. More considered work by the China Economic Quarterly (CEQ)...puts the private sector somewhere between these two extremes at a little over half of the economy...the private sector contributes about 50% of industrial production...large swathes of the service sector are off-limits to private firms. The state has a near monopoly in telecoms, banking and distribution. According to CEQ, private firms have only 37% of the service economy."

China's GDP per head indicates that the country is somewhat poorer than Indonesia. However, this figure hides some gaping inequalities. The poorest province Guizhou, has a GDP per head of $280, on a par with Bangladesh or Yemen. Sichuan with $525 is level with Pakistan. Meanwhile Hong Kong at $22,990 has a higher per head income than Britain. There is a huge gap between town and country but there are also huge wealth differences within each province, and extremes of poverty even along the supposedly prosperous eastern seaboard.

Explosion of unemployment

The north-eastern industrial heartlands are experiencing an explosion of unemployment. In the past the plant where you worked paid your salary, provided your flat, educated your children, paid your families health care and provided a pension. Now privatisation and closures are putting an end to all that. In 1995, for example, Liaoning had an urban working population of 12 million. By western measures around 329,000 of these would have been classified as unemployed. By the end of 1996 that figure had risen to 800,000; by the end of 1997 to 1.8 million and by the end of 1998 2.2 million with another 400,000 scheduled to be laid off. "So much" quips The Economist "for the socialist paradise." In reality, it is the introduction of the market which has wrecked the lives of millions here and across China.

Elements of the market have brought China not prosperity, but a return of many of the evils which constitute capitalist 'civilisation.' Describing the kidnapping of a young child in the city of Guiyang The Economist says "Mr. Wang's family is a victim of China's new capitalism, which comes with a pretty raw face. Along with child kidnapping, many 'old' Chinese practices have made a comeback in recent years. Young brides are sold to old farmers by their families, or are kidnapped in the same way as children. Prostitution is on the increase. The number of heroin addicts is rising sharply, particularly in south-western China, near the Golden Triangle. Concubinage has returned, and so have disputes, sometimes violent, between village clans."

On the advice of the now infamous WTO (which China has applied to join) the bureaucracy has launched a programme of wholesale industrial vandalism threatening millions of job losses.

Already the consequences of this 'advice' are being demonstrated in China. They have provoked an eruption of industrial and social unrest across the north-east of the country. Strikes, demonstrations, even semi-insurrectionary movements, provide a graphic illustration of the explosive potential for a new dramatic episode in the South East Asian revolution.

Absence of information

Reports of these movements have been conspicuous by their absence from our TV screens and newspapers, no doubt partly because such movements against job losses might serve as an example to others, but also because the Chinese authorities, the 'People's Police' and the 'People's Army' have been stamping them out with ferocious repression.

One example, which is apparently typical, is the movement of 20,000 miners and their families in the north eastern coastal town of Yangjiazhanzi near Huludao.

The molybdenum mine there which once supplied 35 percent of China's production has been declared bankrupt and its 20,000 workforce thrown on the slag heap. They were offered an insulting one-off severance payment of Rmb560 (£43) for every year they had worked in the mine. After that there would be no further unemployment welfare at all.

The miners and their families took to the streets and blockaded the traffic on Yangjiazhanzi's main highway. The police responded by firing tear gas into the crowd. Rather than simply disperse however the crowd fought back. This is what the press, as ever, refer to as "rioting." The police were unable to quell the crowd, and therefore the army was brought in from four neighbouring cities. After fierce fighting the army managed to gain control, but not before firing their guns. They then occupied the town until March 31.

Even now the police are patrolling the streets. Official notices have been plastered across shopfronts warning residents not to hurl stones at factories or government buildings, destroy cars, burn oil tanks or spread rumours. The leaders of this movement have apparently been arrested. Their fate is unknown. Arresting a few individuals won't solve the problem facing China's rulers, however. These movements are caused by conditions, not by agitators.

Millions continue to pour into the cities from the countryside in search of work. These migrant workers inevitably do the most menial jobs. This has given rise to the phenomenon of dagongmei, "little sisters doing labour", that is, young working women from the country. These young women work in the most appalling conditions, yet they are the lucky ones. Many more are forced into prostitution or begging.

No-one is sure exactly how many economic migrants there are at present, but estimates range as high as 130 million. Their treatment is often compared with the situation in England at the turn of the 19th century. Others draw parallels with 19th century Shanghai. We might add a comparison with 1917 Russia, or 1998 Indonesia, or in fact any situation where the conditions for revolution are brewing.

Demonstrations are regularly taking place over non-payment of pensions, of welfare and over job losses. Even Zhang Zuoji the minister of labour and social security announced last month that between 500,000 and 600,000 retired workers had not received their pensions on time last year and that 600,000 to 700,000 redundant workers haven't received their living allowances. These official figures are undoubtedly very conservative.

The combination of elements of the free market, with a Stalinist command economy results in the worst of both worlds for many millions in China. Any further movement in the direction of capitalism will spell ruin. Already thousands of steel mills, coal mines, textile mills and cement plants are threatened with closure. The World Bank estimates that approximately 50 million state employed workers are "surplus to requirements" - the requirements of making profits that is. The creation of such super unemployment has serious consequences for the central government's budget deficit, already at a record high, and for local government administrations which will be expected to foot the welfare bill. This would increase pressure on the government to devalue the currency causing further destablisation throughout the region. It is ironic that only a decade ago China, like Russia, was being trumpeted as a new market which would save world capitalism. Now both constitute new ingredients of instability politically and economically.

Politically there are far more serious consequences for the Chinese bureaucracy. If the closure of one mine or factory results in an explosion, then widescale job losses threaten a new revolutionary movement which must make them tremble at the knees.

The Chinese bureaucracy has no moral difficulty in crossing over to capitalism. Equally they would have no ideological problem with throwing the whole process into reverse. What direction they will take has not yet been decided. The press make great play of the next party congress in 2002, where a new generation of leaders should emerge. There is some truth, perhaps, in the old saying that when the old men die the young ones betray. What direction the bureaucracy will take, however, depends on more than the opinions of individuals. Widespread industrial closures says The Economist means "The possibility...for a prolonged industrial slump and a restive population." This "restive population" is what will concern them most. Equally, despite its size, China will be far from immune from the impact of a slump in the world economy. The revolution in the rest of South East Asia too is far from over, each new episode will have a profound effect inside China too.

Crusade against corruption

President Jiang Zemin has launched a new crusade against corruption. The new wealth being created by an elite in the south is like a stab in the back for millions of workers facing no future. The bureaucracy is continuing to try to play a balancing act, now leaning on the workers against elements of corruption, now advancing new economic 'reforms.' This cannot go on indefinitely. On the road to capitalism there is no solution for the Chinese masses. In fact that road leads to ruin and even threatens the break up of the nation.

Not the minor corruption of local party officials or new capitalist bosses but the corruption at the very heart of the regime needs to be rooted out. Only the working class can do that. Once more they have begun to move. Their courage and their will to fight cannot be in question. What they will need is a progamme for the socialist reconstruction of China and an organisation. Armed with these vital tools the Chinese proletariat will take its rightful place in the front rank of the struggle for a socialist transformation of the world.

It has been argued that if everyone in China jumped at the same time the whole world would shake. In the next period international capital will feel the ground quake under the impact of millions of Chinese workers on the move.