Class struggle in China: "A rise like a violent wind" - Part One

The widening income gap in China and the resulting social explosions, threatening the interests of the ruling bureaucracy and capitalists, is a top item on the agenda of the leadership of the Chinese Communist Party. In a bid to ease the revolt, the 11th five-year economic plan is nominally focusing on more equal distribution, but this cannot solve the contradictions created by the move towards capitalism.

China’s National People's Congress (NPC) kicked off its annual full meeting on Sunday, March 5, at a moment when growing class struggle is alarming the Chinese state. The widening income gap and the resulting social explosion, threatening the interests of the ruling bureaucracy and capitalists, is a top item on the agenda of the NPC. In a bid to ease the revolt, the 11th five-year economic plan is nominally focusing on more equal distribution of wealth and "building a new socialist countryside".

Of course, China no longer has a real planned economy, not even the bureaucratic caricature of a plan it once had. During the past decades the only thing the ruling clique seemed to plan, was how much to privatise! While this has meant considerable economic growth, it was at the cost of the social conquests of workers and peasants during the Mao era. Often, so-called experts speak of Chinese economic growth starting after the death of Mao. That is a blatant lie. In fact, average annual growth was higher from the fifties to the mid-seventies, despite the disruptions of the Great Leap forward, despite the disruptions of the Cultural Revolution, and despite the fact that China at that time isolated itself from the world market. In an interesting analysis about the market reforms Martin Hart-Landsberg and Paul Burkett write: “In reality, the Chinese economy at the end of the 1970s was far from a disaster, especially in industry. For example, between 1952 and the end of the Mao era, industrial output increased at an average annual rate of 11.2 percent.” (China and Socialism: market reforms and class struggle, p.37).

Although income has increased, the reintroduction of capitalism in China has had negative consequences on the lives of most ordinary people. Compared with 10 years ago 85.3 percent of people feel the burdens of life are now heavier, according to the China Youth Daily on March 20. Research by the Investigation Center of China News Daily and the News Center of shows that 78.8 percent of people think their incomes have increased but at the same time 85.3 percent contend that they have borne heavier stresses and strains of modern life. Over the past decade, personal expenditure on education, medicine and housing has risen steeply. According to the survey the top three expenses for people were housing, education and health.

Estimates from various sources, including the World Bank and the Chinese government, suggest that income inequality has increased at least 50 percent since the late 1970s, making China one of the most unequal societies in Asia. According to a government study quoted by the official Xinhua News Agency, the most affluent one-fifth of China's population earn 50 percent of total income, with the bottom one-fifth taking home only 4.7 percent. "The income gap, which has exceeded reasonable limits, exhibits a further widening trend. If it continues this way for a long time, the phenomenon may give rise to various sorts of social instability," it says.

Peasants have been hit the hardest. The net per capita income of farmers in 2005 was $402.80, while the per capita income of city dwellers was $1,292, according to government statistics. "What's more, the gap is widening," says Chen Xiwen, a high-level Communist Party functionary for rural finances. However, per capita income does not tell anything about the income of city dwellers (workers) as compared to the new bourgeois and middle class in the cities. An aperitif in a slick Beijing bar costs a month’s wages of a farm worker. On the other hand, China's urban poverty has worsened despite the country's booming economy, according to the China Youth Daily, which quotes dozens of economists. The economists told the paper that the proportion of urban residents living in poverty is now higher than that of rural residents. The poverty rate in China's cities is six to eight percent, which is higher than that in the countryside. Peasants moving to the cities, laid-off workers of state owned enterprises, residents in resource-exhausted cities and senior citizens relying only on pensions make up the largest proportion of the urban poor.

Under Mao the country had build up a social security system that was far superior to the rest of the ex-colonial countries, just like in other deformed workers’ states such as the Soviet Union or Cuba. Today, basic services for ordinary Chinese are falling further behind. China under-invests in crucial social services, especially education and public health. Government expenditure on education fell nearly 20 percent as a share of total education spending in the 1990s. In rural areas 78 percent of the education budget must be raised from peasants through local taxation and fees, while Beijing provides only 1 percent of the funding for rural education. Researchers are discovering that drop-out rates among rural children from junior secondary schools average 30-40 percent. “This is the most under-reported story in China – the country’s massive failure to educate its rural youth in the 1990s,” says Yasheng Huang of MIT Sloan School of Management. In public health, the consequences of misspending are even more severe. Government money, which accounted for 36 percent of all health expenditure in the 1980s, plunged to less than 15 percent by 2000. China has hospitals and equipment, and its per capita spending is higher than comparable developing countries. But these resources are among the most unequally distributed in the world. The World Health Organization rated the fairness of the Chinese healthcare system below all countries except Brazil and Burma. According to China’s own Ministry of Health, two thirds of the population lacks any type of health insurance, and about half of the sick do not seek professional medical treatment at all. In rural areas nearly 90 percent of health costs are borne by individuals.

The unbearable conditions in the countryside are pushing millions of peasants towards the cities in search of a job. If things go on like this, it is expected that between now and 2015 as much as 300 million people will move to the cities, the largest migration in world history. Together with the millions of workers that are sacked through the privatisation of state firms, these peasants form a mass proletariat that cannot but sell its labour power to earn a living. This is a main condition for the formation of capital in China, what Marx called primitive accumulation.

Breeding a national capitalist class

Just like in 19th century Europe, China’s capitalist class is not being created through “fair competition” and the “invisible hand” of the market, but through graft, corruption and outright theft. As an article in the Asia Times analysed: “[The entrepreneurs’] past hides instances of tax evasion, bribery or worse. These sins are due to the ongoing process of transformation from planned economy to market economy.” (16/02/06) Capitalism is has been, and is being, built out of the rump of the planned economy, namely the massive privatisation of state enterprises. This process is described in a letter by veteran CCP members (to which we will return later):

“The wealth accumulated over the decades by the nation's labouring masses, who started off with nothing and built them up painstakingly with their blood and sweat, is now plundered via the collusion of the officials and capitalists, channelled into their private coffers. State enterprises have fattened a whole swag of private enterprises. Through sucking the blood of state enterprises, numerous private enterprises become super-rich overnight, while these same state enterprises, from losing so much blood, are getting thinner by the day. Under the grandiose cover of ‘state enterprise ownership reform’, a feast to loot and divide up the people's wealth is taking place. The result: a whole layer of corrupt officials, opportunists and heads of enterprises are being fattened, a whole bunch of billionaires is created, state enterprises are dealt a blow and seriously weakened. In addition, the repeated proclamations of the dominance of public ownership have long failed to match the reality, the whole country and the people are in ruin, and the workers and peasants have once again slid into being slaves of capital.”

This process of primitive accumulation is spreading on ever vaster scales. In many parts of both urban and rural China, collusion between local government officials and the construction and commercial companies seeking land, results in little if any compensation for land taken, homes destroyed and livelihoods displaced. According to the UN Development Programme, these ruthless evictions have thrown 50 million farmers off their land with little or no compensation. Similarly, rigged sales of government property result in the widespread incidence of “sweetheart deals”, in many cases followed by layoffs or facility closings.

According to Chinese estimates, since 2003 the sale of farmland for industrial and residential purposes created a rough turnover of some 5 trillion yuan (more than US$600 billion). Only 10 percent of the money went to the farmers, some $60 billion. The Asia Times states: “It is interesting to consider where 90 percent of the sales profits go. More than $500 billion went into local coffers, feeding local administrations and their needs, and into the pockets of local officials. Taking a cynical view, bribes are partly necessary, as they motivate officials in favor of market reforms. With such a very concrete incentive in sight, the officials push for economic development rather than hindering it.”

“These officials and their cronies then give birth to new middle and rich classes in previously poverty-stricken farmland. However, since only a small portion of the sales money goes to farmers, they are left out of the process, possibly poorer than before. Had a higher price been paid to them, they would have had a little capital to start other activities. But there are two considerations to bear in mind. China's growth has been thriving on cheap labor. If peasants suddenly got much richer, this could create a shortage of cheap labor, pushing up prices in cities and possibly triggering inflation. Furthermore, there is endemic corruption in the countryside, dating back centuries.” (16/02/06)

Stratfor’s George Friedman writes: “This is a critical process at the heart of Chinese industrialization. The purchase of land, including forced sale, is considered necessary for Chinese economic development. However, Chinese economic development is driven as much by corruption as by land. The government in Beijing has no particular desire to see the farmers dispossessed; on the contrary, the money is made available for delivery to the farmers. But the diversion of funds is hard-wired into the process. It is one of the primary means for capital formation in China...”

“Beneath the surface, a number of things are taking place. The Chinese economy has been growing at a frantic pace. This is not necessarily because the economy is so healthy, nor because many of these industrial projects make economic sense. In fact, the government in Beijing has been very clear that the new projects frequently don't make a great deal of economic sense, and has been trying to curb them (though it does not necessarily command obedience in every case from provincial or local governments). On the other hand, China needs to run very hard to stay in place. Within what we will call the entrepreneurial bureaucracy – with pyramiding, undercapitalized, highly leveraged projects being piled one on top of the other – new investment projects are needed in order to generate cash that stabilizes older, failing projects. Slowing down and consolidating is not easy when there are bank loans coming due and when money has to be spread around in order to maintain one's position in the system.”

“That means that aggressive economic growth is needed. It also means that massive social dislocation – including theft of land – is embedded in the Chinese system. The flashpoint is the interface between the rapidly spreading industrial plants and the farmers who own the land. The bureaucratic entrepreneurs need not only the land, but also the money that legally is due to the farmers.” (Stratfor, 13/12/05)

Communists’ transformed into capitalists

The core of the new capitalist class is formed by former and even current members of the Communist Party and the State Apparatus, just like Trotsky predicted about the Soviet Union. A 2002 survey of 3,635 entrepreneurs reported that 30 percent were party members and 35 percent had been recruited into the Chinese People's Political Consultative Conference, a prestigious government advisory group. Apart from the capitalists belonging to the Chinese Diaspora (in Taiwan, Southeast Asia etc.), many of the new capitalists were former bureaucrats and managers of state industry. In large and medium-sized state enterprises, the Communist Party secretary and the chairman of the board are the same person about half the time. “In 70 percent of the 6,275 large and medium-sized state enterprises classified as “corporatised” as of 2001, the members of the party committee were members of the board of directors. All told, 5.3 million party officials – about 8 percent of its total membership and 16 percent of its urban members – held executive positions in state enterprises in 2003. (…)

“Corruption is now assuming forms normally associated with regime decay. Corruption involving large numbers of officials used to be rare. Now it’s rampant. Regional data suggest that large-scale corruption rings account for 30 to 60 percent of all the cases of graft uncovered by authorities. In some of the worst instances, entire provincial, municipal, and county governments were found to be tainted. In Heilongjiang Province, a corruption scandal involved more than 400 local officials, including the former governor, the former organizational chief of the party’s provincial committee, a vice governor, the chief prosecutor, the president of the provincial high court, and eight of the province’s 13 party bosses. (…)

“The ruling elite in China, it appears, is drifting and insecure. Fearful about what the future may hold, some officials do not want to wait even a few years to turn their power into wealth. In 2002, almost 20 percent of the officials prosecuted for bribery and nearly 30 percent of those punished for abuse of power were younger than 35. (…)

“A generation ago, the offspring of the ruling elite took up positions in the government or military; today, they go into business. The social ramifications of their self-dealing are particularly evident in real estate, where peasants regularly earn less than 5 percent of the value of their land while developers pocket 60 percent, with the remainder going into local government coffers. Privatization, too, offers insiders a chance to hit it rich by gobbling up state assets on the cheap. A recent study showed that 60 percent of privatized state enterprises were sold to their managers. As a result, 30 percent of all private-firm owners are now party members.” (Minxin Pei, The dark side of China’s rise, Foreign Policy, March/April 2006)

Even during the Mao era, the State defended the interests of the bureaucracy. But the CCP leadership leaned on the masses to give blows to the rotten capitalism of Chang Kai Shek, whose bourgeois nationalism had not been able to develop the productive forces. However, the introduction of the market reforms has transformed over a period of time a large layer of the bureaucracy and their kin into capitalists. The State apparatus defends the interests of this nascent bourgeoisie against the workers, as is not only evidenced by the pace of capitalist restoration but also by the severe repression of workers’ and peasants’ resistance which accompanies this.

Some people, both from the Left as from the Right, argue China still is a socialist-inspired state because of the still large state industry and the role of Communist Party leaders in these enterprises. Indeed, even today state industry counts for something around 30 percent of GDP, and in terms of people employed the state-owned enterprises are among the biggest in the world. But state industry does not equal socialism. Many capitalist countries have state firms which employ a considerable amount of people, but we would never describe these as socialist. Although they are not in private hands, they are organised on a capitalist basis, for example with workers on a contractual basis. In a workers’ state, state industry has totally different characteristics. In a healthy workers’ state, such industry for example would be run under workers’ control and management. But even in a deformed workers’ state, such as China under Mao, state industry has a completely different character. In the past, state enterprises provided such things as housing, pensions, healthcare etc., to the workers. They got job security and only in the 1980s contractual labour was reintroduced.

But most importantly, under capitalism state industry is meant to prop up national capitalism by a state which defends the private ownership of the means of production. This is what we saw in Germany under the rule of the Junkers; or in most European countries with the nationalisation of the energy sector; or in Venezuela under the Fourth Republic with the nationalisation of oil; or in South Korea under the military rule of Park Chung Hee with the nationalisation of the banks and even the introduction of five-year plans; and so on. The fact is that today in China after almost three decades of market reforms, capitalism has become the dominant mode of production. And private property is defended by a strong State against the workers. However, the nascent Chinese bourgeoisie also needs a strong State against imperialism. They saw what happened to Russia, or what happened to South Korea when the State bowed to the interests of the imperialists. Today the biggest chunks of Korean capital are sold-out to foreign multinationals. GM bought Daewoo Motors, Renault bought Samsung Motors, Philips bought a 50 percent stake in LG-LCD (a subsidiary of LG Electronics) etc. The leaders of the Communist Party know that Chinese capitalists are still not strong enough to compete against the imperialist giants. In a recent interview with the official Xinhua News Agency, Li Deshui, head of the National Bureau of Statistics and a defender of the capitalist road, said untrammelled access for foreign companies could threaten China’s “economic security and national sovereignty”. “If we allow the free development of malicious acquisitions by multinational companies, the autonomous brands and innovative ability of China’s national industry will gradually disappear,” Xinhua quoted him as saying. Therefore they keep the strategic industries for the moment in the hands of the state and meanwhile keep on nurturing national capitalists. But since the main logic is defending capitalism, we can hardly speak of China as a socialist state…

Having said that, this does not mean that are no contradictions in the Chinese leadership. These are not so much contradictions between pro-capitalists and real socialists, but rather contradictions on how fast to go forward and how to handle the increasing resistance against the capitalist road. Under the pressure of growing protests of peasants and workers, the 2006 National People’s Congress is divided. Wu Jinglian, chief economist at the State Council Development Research Center, a high-level government think-tank, explains what the odds are: “At issue is whether we want a true market economy or bureaucratic capitalism, and under these complex conditions, pushing reform forward has become extremely difficult.” (Reuters, 06/03/06) From this quote it is clear which direction he prefers. But others want to temporise in the reforms and stabilise the situation.

Some pro-capitalist measures have already been delayed, such as a law to enhance private property rights. At a meeting in October, the Standing Committee of the National People's Congress scrutinized a draft law on real property rights, the first of its kind. China already has laws on intellectual property rights in force. With a law on real property rights, legal protection of private property would be even more consolidated. It was generally expected the draft would be passed by the NPC 2006 session. However, in August last year Gong Xiantian, a Peking University Law professor and Communist Party member, petitioned the NPC Standing Committee saying the draft law on real property rights "violates the principles of socialism” and "would undermine the legal foundation of China's socialist economy". He says the essence of the draft law is to protect the real property rights of the extremely rich minority, though in form it sounds as if everybody's rights would be protected. "It equally protects a rich guy's limousine and a beggar's rod," he added sarcastically. (The Standard, 27/02/06) Gong's petition somehow reached the higher authorities. Although Yang Jingyu, the director of the NPC's Law Committee, denies that this petition is the cause of the temporary cancelling of the law on real property rights, it is clear the leadership has put the draft back in the fridge because they fear it could become a focal point for a national campaign. And organisation on a national scale is something they fear the most.

Brewing social unrest has not yet precipitated a nationwide crisis, and participants in localised incidents have yet to form a generalised movement with mass appeal. Most incidents are triggered by specific grievances (unpaid wages, high taxes and land seizures). To avoid a nationwide movement with insurrectionary tendencies, the regime desperately needs the economy to keep on growing at a high rate of 8 to 10 percent, so they can provide jobs and an income. But that’s where the shoe pinches. Even while the turn towards the market has brought high growth, it has also brought with it deep economic contradictions typical of capitalism. China is moving towards a classic crisis of overproduction. Chinese economic planners revealed in early 2006 that 11 major capital-intensive manufacturing industries were overproducing. For example, the country’s steel industry, the world’s largest, has 116 million tons (or about 30 percent) of excess capacity. Another indicator is foreign investment, nowadays the main motor for capitalist economies. As Michael Roberts explained in The perfect circle of success: “If that [foreign investment] starts to decline, then it means that G7 corporations have less to spend or they are worried about not getting enough profit out of the workers in China. In 2005, foreign capitalists invested $58bn in China. That’s very high, but it is slightly less than in 2004. Just the first signs.”

Since China now is tightly knit to the world market, slowing investment and slowing exports would have devastating consequences. In fact, already now China is built on a huge bubble in real estate and finances. “Image projects” (such as new factories, luxury shopping malls, recreational facilities, and unnecessary infrastructure) tend to impress Western visitors, who view them as further proof of China’s economic prowess, but in reality they are not. China’s banking system, which costs Beijing about 30 percent of annual GDP in bailouts, is even during this economic boom saddled with nonperforming loans and is one of the most fragile in Asia. A similar situation persisted in Southeast Asia and South Korea before they collapsed in the 1997-98 Asian crisis. Li Deshui, China’s chief statistician, pointed out in January that, after a year of efforts to hold it down, 48.8 percent of China’s 9.8 percent growth in 2005 was still attributable to fixed-asset investment. He insisted that excess capacity is still a “prominent and serious” problem and foresees “huge waste and bad bank loans” – and rising unemployment, with attendant social tensions. (The Times, 06/02/06)

Mass incidents”

Although the economy until now has been growing at a frantic pace, this has not decreased social tension.  For example, last year’s anti-Japanese riots were permitted to continue so that China’s workers and peasants could blow off some steam. The Ministry of Public Security reported last year 87,000 “mass incidents”, meaning big protests by workers or peasants. These figures are up 6.6 percent from 2004, after they saw already a 28 percent rise from 2003 to 2004. And these are official figures, always an underestimate. Also the number of people participating has been rising. The average size of protests and demonstrations grew from 8 persons in 1993 to 52 in 2003 (the year before things started to really explode).

According to Jenny Wai-ling Chan, “the number of arbitrated [labour] cases grew tenfold during the 1990s, from 12,368 cases in 1993 to 120,191 cases in 1999. By 2002, there were 184,116 cases. Also significant has been the drastic increase in arbitrated ‘collective labour disputes’. Official records show a trend of a higher ‘average number of employees’ involved per case, which indicates the collective nature of labour conflicts. (…) With regard to the cause of labour disputes, the China Labour and Social Security Yearbook shows that more than 50 percent are over wages, welfare and social insurance payments, and more than 30 percent are over the termination of labour contracts and dismissal. In foreign-invested and private enterprises, wage arrears are particularly serious. Despite the rise in numbers, it should be said that the national data for arbitrated labour disputes may underestimate the actual number of disputes. For example, it is possible that a quantity of migrant workers and employees in state-owned enterprises have not used institutionalised channels for conflict resolution. On top of that, other applications for dispute resolution have met with rejection and, although technically disputes, are thus not included in the official data.” (CSR Asia Weekly, Vol.1, Week 11, 2005)

Dorothy Solinger states: “The last annualized figure for labor protests that the Chinese state was willing to announce publicly was 100,000 for the year 1999. But a 2001 internal report from the Ministry of Public Security disclosed that the numbers ‘began a rise like a violent wind’ from 1997, the year of the Communist Party's 15th Congress, which pressed for factory firings in the name of ‘efficiency’ (…) What is sparking so much unrest in a country that is usually depicted as daily growing more affluent and which places such high emphasis on ‘stability’? The causes are: unpaid wages and pensions, sudden and massive job terminations, corrupt officials held responsible for the bankruptcy of some industrial enterprises and an end to most socialist privileges and benefits, guaranteed since the earliest days of the Communist regime in the 1950s (…) In the interest of undoing what post-Mao Zedong leaders came to view as the excesses and waste of the socialist, planned economy, some 60 million state-owned enterprise (SOE) employees have been summarily sacked since the early 1990s, as their factories failed.” (Worker protests in China, Project Syndicate, February 2005)

Workers frequently demonstrate to protest low wages and work conditions, in addition to expensive company store, dormitory and other expense charges, which were free or cheap in the past. On some occasions, workers even take the law into their own hands to protest layoffs and unpaid wages. For example, in November 2004, workers at a factory in southern China took their bosses hostage over unpaid back wages, and in the same month workers in another factory in the same town fought with security guards to protest layoffs. (The economic basis for social unrest in China, A.Keidel, May 2005,) Under the surface of society, anger has accumulated so strongly in the last period that any small incident can trigger an outburst. For example, also in November 2004, a woman’s anger at bridge tolls led 30,000 people to riot, confronting hundreds of police and paramilitary units, leaving one person dead.

But recently the unrest has arisen most frequently in response to land seizures by local governments to make way for industrial development on the edges of growing cities. Forty million farmers have lost their land as ever larger areas are appropriated for industrial and residential uses, and many are enraged over inadequate compensation. "A lot of the older peasants, how can they find other employment? They have lost their land, they have no money, they have no social security, they cannot find jobs. There are bound to be serious, serious social problems," says Joseph Cheng of the City University of Hong Kong (AFP, 25/02/06). Especially since 2004, the peasant struggle has taken on an immense scale. For example, in October 2004 in Sichuan Province, 90,000 peasants fought with police over losing their homes for little compensation to make way for a hydroelectric dam. Only martial law restored order.

“Each week brings news of at least one or two incidents, with thousands of villagers in a pitched battle with the police, or bloody crackdowns in which hundreds of protesters are tear-gassed and clubbed during roundups by the police. And by the government’s own official tally, hundreds of these events each week escape wider public attention altogether. (…) The response by the Chinese authorities, a mixture of alarm and seeming disarray, is a clear indication that whatever is brewing here is being taken with utmost seriousness at the summit of power.” (The New York Times, 24/08/05)

A recent incident in Dongzhou, a village near the town Shanwei in Guangdong province, has acquired an exemplary significance. The protests in Shanwei had gone on for quite a while before coming to a head last December. Land was confiscated a few years ago for a wind-power project. The farmers who worked the land were never compensated for their dislocation. Public demonstrations began in August 2005, continuing intermittently. With no compensation forthcoming, the protests escalated in December. According to official reports, they were led by three men and were armed with knives, steel spears, sticks, dynamite and Molotov cocktails. Members of the local People's Armed Police (paramilitary police) fired tear gas at the crowd, but the three leaders rallied the crowd to continue. According to the description of events given by the Chinese government, the demonstrators started to throw explosives at the police as night fell. The police opened fire. The government said that three people were killed, eight wounded. However, an on-site investigation by a civil rights campaigner showed that more than 30 villagers were still missing and that their families were worried their bodies may have been cremated. According to international media, the incident marked the first reported large-scale shootings of demonstrators in China by official security forces since Tiananmen Square in 1989.

But the use of violence, instead of calming down the situation, has the opposite effect. In January, The New York Times (18/01/06) reported on a clash in the village of Panlong, also in the province of Guangdong. “Just as the protests are becoming more and more common, so is the use of overwhelming force to put them down. A major threshold was crossed early last month in the village Dongzhou, about two hours from here by car, where residents estimate that as many as 30 people were killed by paramilitary security forces that opened fire on a crowd of demonstrators. (…) In a series of interviews Tuesday, people here made it clear that there was a broad awareness of the events in Dongzhou and of the fact that much of rural China is simmering with discontent. (…) ‘People here have tried everything you can think of to get the problem solved before this happened,’ said a resident who gave his name as Chen. ‘They talked to the village committee, the township and municipal governments. One of them even went to Beijing. But nothing is done - the village officials just simply ignore them.’ Chen described the peak of the demonstrations, Saturday night, when the deaths are said to have occurred. ‘It was like a war, so real and so brutal,’ he said. ‘I did not see who started it, but I saw policemen were beating the villagers and the villagers were fighting back with stones and firecrackers’.”

Just as little as state violence, neither official gestures seem to quell the situation. All attempts to resolve and achieve a balance, only inflame more, as the article proves: “Although there have been small-scale protests over land issues going back to the early 1990s, villagers said trouble broke out in earnest early last week after a widely publicized speech by the Communist Party secretary for Guangdong Province, Zhang Dejiang. He said land issues must be resolved equitably. Brandishing the party secretary's words, villagers began a sit-in and later obstructed traffic, demanding that the matter of compensation for land they had surrendered be reopened. A particular focal point for the protests was the Minsen garment factory, the land for which villagers said had been acquired through corrupt deals with local political figures.”

The unrest even has penetrated the army, which is evidenced by an August 2005 notice by the armed forces, quoted in the Liberation Army Daily. The notice issued a warning to soldiers that they would be severely penalized for taking part in petitions or demonstrations. The statement appeared to be prompted by a series of protests by veterans over their pension benefits at a People’s Liberation Army office in Beijing. When social protests are entering the army barracks, the regime knows the alarm code is red. In 1949, Chiang Kai Shek’s nationalist government collapsed after its troops were no longer prepared to fight for it.



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