China's unions take on the challenge of change

During a visit to the People's Republic of China in July, 
Marilyn Bechtel talked with trade unionists at the enterprise, 
city, provincial and national levels, to learn how they are 
helping workers meet the challenge of economic restructuring 
going on in China today. This is the first of two articles; the 
second will deal with the situation of China's migrant 
workers.

It has been a quarter century since the policy of "reform and 
opening up" began to be implemented in China, featuring 
restructuring of state owned enterprises (SOEs), and opening the 
economy to domestic and international capital. This complex path 
is a central feature of what the Communist Party of China (CPC) 
calls "building socialism with Chinese characteristics".

It is viewed by the CPC as the only practical way to jumpstart 
economic development under the very difficult conditions of a 
developing country with a huge population and a large diverse 
land mass, facing extreme poverty and devastation from war as 
well as from world capitalism's unending efforts to overturn the 
Chinese revolution.

Far from being a "free-for-all", the overall economic picture is 
influenced through macroeconomic controls such as monetary 
policies, investment growth, credit and taxes. Nor has the 
private sector taken over; currently about two-thirds of the 
Gross Domestic Product (GDP) comes from the publicly owned 
sector.

Especially since the start of the 1990s, the shift from a stress 
on state planning, with lifetime employment for urban workers, to 
one permitting much greater operation of markets has accelerated 
the country's economic growth and brought improved living 
conditions to most Chinese.

At the same time, however, the process has brought layoffs and 
unemployment to millions of workers as SOEs reorganised to boost 
productivity and competitiveness.

In that period, north-eastern China and other old heavy industry 
centres have gone from industrial heartland to "rust belt", while 
laid-off workers have faced the need to upgrade skills, learn new 
technologies and, often, to prepare for entirely different lines 
of work. Even in eastern China, where rapid industrial growth has 
been a national priority for years, similar processes are taking 
place.

In the US, millions of workers and their communities have faced 
similar challenges, as the workforce has been slashed under 
pressure of new technology and plant closings.

New strategies

Like trade union movements in many countries, US and Chinese 
trade unions are each having to develop new strategies to uphold 
their workers' interests under the new conditions.

However, while US workers' wages have stagnated or declined in 
the last decade and vacation days have decreased, in China during 
the same period the average worker's wage rose 40 percent, the 
work-week has been cut and vacations are lengthening.

I talked with trade union leaders in four different cities, 
Shenyang in the north-east, Ningbo and Hangzhou in eastern China, 
and the capital, Beijing. Specifics varied from region to region, 
but the overall picture was similar, a significant gap between 
the number of workers seeking jobs and the employment 
opportunities available to them, massive programs to retrain and 
re-employ workers displaced in the reform of state-owned 
industries, and new emphasis on pre-employment training and on-
the-job upgrading of skills.

Though these programs are far from solving problems for all 
displaced workers, the avenues they offer have helped millions to 
find new jobs and to stabilise their employment situation.

In the years just after China's 1949 socialist revolution, 
Liaoning, Jilin and Heilongjiang — the north-eastern provinces 
once called Manchuria — were the main national centre of heavy 
industry, producing the country's first steel, machine tools, 
locomotives and aeroplanes. Under the centrally planned economy 
of that period, enormous resources from all over the country were 
channelled into the region and, in turn, its products were 
distributed nationwide.

However, as emphasis on central planning was reduced, the region 
lost its cutting-edge position. Once providing 17 percent of 
China's industrial output, by last year the north-east had 
slipped to nine percent.

The Communist Party of China's 16th National Congress in November 
2002 laid the basis to re-develop the region so it can again play 
a major role in China's modernisation process. Revitalisation was 
given additional impetus at the CPC's October 2003 Central 
Committee meeting.

Revitalisation

The process involves upgrading technology to contemporary 
standards, restructuring SOEs, encouraging development of joint 
public-private and private ownership, and bringing in more 
domestic and overseas investment.

The goal is to restore the region's full industrial potential by 
the year 2020. As of July, the National Development and Reform 
Commission had approved investments in 160 projects in the area, 
totalling about 66.6 billion yuan (US$8 billion).

During conversations in several cities, union leaders described 
the union's responsibilities to uphold workers' rights during 
restructuring. In SOEs, the chair of the workplace trade union, 
elected by representatives of all the workshops, is usually a 
member of the top administrative staff or, in reorganised 
enterprises, a member of the board of directors.

This assures union input as reorganisation is discussed. The 
Workers' Congress of elected representatives must discuss and 
ratify restructuring and employment plans before they can take 
effect.

Lay-offs

While in Shenyang, I talked with Wu En Tao, Vice Chair of the 
China Shenyang Federation of Trade Unions. He said about 30 
percent of workers at the city's SOEs have been laid off. Some 20 
to 25 percent have found new jobs in SOEs, while others have gone 
into information technology where pay is about equal to the SOEs 
or into lower-paying service jobs.

(Though he did not cite a specific figure, Liaoning Province's 
Labour Bureau said some 750,000 workers were laid off in Shenyang 
in 2003.)

Wu outlined a series of measures with union involvement to aid 
the unemployed. Among them: job agencies that train workers, 
upgrade their skills and help them find jobs; programs matching 
workers' skills to available jobs; and small interest-free loans 
to workers wishing to start their own businesses.

Nation wide, provisions for laid-off SOE workers include 
temporary income support for the newly jobless, unemployment 
insurance, and a minimum living standard guarantee for those who 
don't find adequate new employment.

Tong Qing Feng, Vice President of the China Institute of 
Industrial Relations in Beijing, told me that while the process 
varies by region and by industry, workers basically have three 
years in which to be retrained at re-employment centres.

After that, the social security minimum living standard kicks in 
for those who do not find a new job. However, Tong said that the 
social security provisions have been implemented unevenly so far 
because of a shortage of funds. He said the Institute is 
optimistic that the peak of layoffs has been reached and they 
will taper off soon.

Training

An example of a long-established SOE that has found its footing 
in the new environment is the Shenyang Blower Works. Founded in 
1934, long before the revolution, the plant at first mainly made 
coal cars. Now it makes centrifuges, turbines and other precision 
equipment for the petroleum and chemical industries. The plant 
employs 2700 workers, half of whom are skilled technical workers. 
This fall [spring time in Australia] they will move to brand new, 
state-of-the-art facilities.

Trade union vice chair Zhang Jiashu told me that before their 
employment starts, all shop-floor workers receive technical 
school training.

When they join the plant's workforce, they are trained for their 
particular job. Training is continuous, and many workers earn 
certificates of competency at various levels. Competitions among 
the workers provide added incentive to hone skills.

The economic picture is very different in densely populated 
Zhejiang Province, south of Shanghai, where accelerated 
development including building up private enterprise has been 
emphasised since the 1990s.

During a meeting in the city of Hangzhou, provincial Trade Union 
Federation leaders said over 90 percent of SOEs in the province 
have been restructured. Though the employment environment in 
Zhejiang is more stable than in other areas, problems still 
exist, they said.

Besides SOE workers laid off during reorganisation, jobs must be 
found for farmers who have lost their land, a rapidly growing 
number of college graduates, and migrant workers drawn to the 
bustling region.

Through combined efforts of the trade unions and government, over 
half a million new jobs were created last year, and a similar 
number is planned for this year, the unionists said, but despite 
this great effort, a substantial gap remains.

In the province, 75 training facilities offer some 650 classes. 
Programs now feature exams for skills certification. Training is 
done to enterprise specifications, and workers are referred to 
those enterprises when they finish.

Every city and county also has at least one centre to aid workers 
who experience unusual difficulty in finding new work. These 
centres advocate with the government on policy matters, serve as 
employment agencies, aid workers in difficult life situations, 
and offer advanced technical and professional training.

In a period when China's great economic progress has benefited 
virtually all Chinese while at the same time regional 
inequalities and unemployment remain to be overcome, the 
country's trade union movement is playing a major role for 
progress as it strives to uphold workers' rights under new and 
evolving conditions.

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People's Weekly World