50 years after revolution:
Chinese workers fight privatisation
It is half a century since the Chinese revolution scored a victory and the People’s Republic of China was set up. With the changes it brought in the relations of production and in class relations, the economy acquired possibilities for rapid growth.
According to official statistics. China’s GDP rose from 67.9 billion yuan (RMD) in 1952 to 7,955.3 billion yuan in 1998, an average annual growth rate of 7.7%. which was higher than the average annual growth rate of 3% in the world as a whole. This figure has been the pride of the Chinese government.
The most rapid growth took place in the last decade. Up to 1978, the GDP was only 362.4 billion yuan, which means that under Mao Zedong’s leadership, in 26 years including the disruptions of production during the Great Leap Forward, the peoples communes and the Cultural Revolution, the GDP had increased by only about four times from a very low starling point.
It was in 1987 that GDP exceeded 1 trillion yuan, a two-fold increase in 9 years. And then from 1987 to 1998, in 11 years, the GDP rose by 6.3 times.
Private sector
However, such a rapid increase in the last two decades was partly a result of the rapid development of the private economy. For instance, of the total industrial output of 1996 and 1997, the state-owned economy constituted 28.5% and 25.5% respectively, whereas the private economy constituted 71.5% and 71.5 per cent respectively,
This rapid economic growth was at the expense of major political concessions on the road to gradual capitalist restoration. In the March 1999 National People’s Congress (NPC) when the Constitution was revised, the private economy and individual economy, formerly regarded as playing a "supplementary" role, had their status enhanced to that of "being an important component in the socialist market economy".
Lately, the Standing Committee of the NPC endorsed the "Law on Individually Owned Enterprises", which aimed to encourage and safeguard the development of private economic units. The official figures showed that by the end of 1998, registered individually owned enterprises amounted to 442,000 There were about 31.2 million self-employed industrial and commercial enterprises, some of which were registered as individually owned enterprises
With China treading the path towards capitalism, social polarisation and increased gap between the rich and the poor have become more acute.
To ensure that the military parade could be seen clearly, 25 factories were asked to stop production for 11 days
In the early years of the Reform, "Ten-Thousand Yuan Households" was once the term used to describe the nouveau riche. In later years. over a hundred "Hundred-Million Yuan Households" had emerged. A recent report said that "currently savings in China amounts to almost 6 trillion yuan, mostly concentrated in the hands of 15-16% of high-income households" (NCNA, 30 August 1999)
The deposits of these high income households amounted to 4 to 3 trillion yuan, which was over half the GDP for 1998 and four or five times the total revenue of the country.
But at the other end of the scale, although productivity has risen, unemployment and layoffs are the rule of the day. The Minister of Chinese Labour and Social Security reported to the Standing Committee of the NPC in August that in the first half of 1999, temporary layoffs in state-owned enterprises were 7.42 million workers, of which 5.4 million had not been allocated a new job.
Each temporarily laid-off worker received a living allowance of 170 yuan a month. But some enterprises in some areas did not manage to distribute even this meagre some of money in time. A sum of 1.37 billion yuan was still owed to pensioners from state-owned enterprises.
Crisis of the state-owned economy
The Chinese bureaucracy has deprived workers of their power to be master of the enterprise; and to democratically operate and manage them . With control in the hands of a small minority of greedy and incompetent bureaucrats, inefficiency and low productivity have become a feature of the enterprises. This has led over a long period to calls for reform. However, these reforms have mostly been in vain.
At the end of 1997, a total of 6,599 (39,1%) state-owned enterprises were in deficit The net deficit was 29.3 billion yuan in 1997, and 55.8 billion yuan in 1998. About 80% of slate-owned enterprises are in debt.
However, If they are all allowed to go bankrupt, the repercussions on bank loans and general savings from the people, and on the already problematic levels of unemployment will certainly cause serious problems of social stability. This is one major reason why the Communist Party of China (CCP) has been reluctant to push through such bankruptcies.
It must also be noted that state owned as well as collectively owned enterprises still occupy a primary position in terms of large and medium scale enterprises with 70 per cent and 64 per cent respectively.
President Jiang Zemin, in his speech commemorating the 78th anniversary of the formation of the CCP, stressed that state-owned assets amounted to 8 trillion yuan, forming the prime basis of the national economy.
He warned of the greed of "some comrades" who attempted to use their political power to seize state assets, arguing that if these people were not contained, state assets would eventually disappear.
This speech indicated that the CCP leaders are still compelled to give lip service to Marxism and socialism, and that the gains of the revolution in terms of labour, social welfare and anti-capitalist ideology cannot be easily removed.
The discontent and protest brewing amongst workers has exerted a strong pressure on the leaders, serving as a barrier to a general capitalist restoration in China.
The Chinese proletariat, both on the basis of class consciousness and actual interest, do not support the privatisation of state-owned enterprises. Workers have taken action against privatisation.
For example, the Chinese Youth Journal in Beijing reported the following case on June 4 this year. In Hefei, the provincial capital of Anhui Province, over 2,000 workers had transferred from state-owned enterprises to companies run by joint ventures where they enjoyed twice their former wages and could earn a monthly income of 1,000 yuan.
However most workers later preferred to leave these new jobs and wait to be re-employed in the state owned sector even though this meant they receive only a small stipend of a basic living allowance.
The reason was that in the new jobs, labour intensity was double that of the original job. Management control was strict and dismissal of workers was frequent - hence there was no sense of job security.
Workers thus preferred to return to state-owned enterprises to wait for reallocation of jobs.
For China’s economic reform to be effectively conducted in a way that benefits the majority of the people, radical democratic political reform is indispensable. Without the workers assuming real power, the bureaucratism and corruption of the CCP cadres cannot be combated.
But the CCP has set its face against any political democratic reform and has cracked down on dissidents and those who demand political democratisation. Autocracy has been maintained by the repression of dissent..
110 Billion yuan has been spent on renovations in the capital to celebrate the 50th Anniversary. To reduce air pollution to ensure that the military parade could be seen clearly, 25 factories including the Beijing Steelworks were asked to stop production for 11 days with an estimated loss of 100 million yuan.
The mobilisation of several hundred thousand people for the mass parade was meant to put up a show of strength and pride, yet they could not cover up the grim reality of life in China today.