Leaner Factories, Fewer Workers Bring More Labor Unrest to China



March 19, 2002

Leaner Factories, Fewer Workers Bring More Labor Unrest to China


BEIJING, March 18

Copyright 2002 The New York Times Company


As the overhaul of China's moribund state industries

enters a decisive phase, public protests by displaced workers are becoming

larger and angrier than ever, with huge demonstrations breaking out this

month in several places.

In one dramatic example, every weekday since March 1, tens of thousands of

irate workers have gathered outside the headquarters of China's most

glorified oil field, at Daqing in the far northeast, charging official

deceit and betrayal in what some experts have called the largest protests

over labor issues since the Communist Party took power in 1949.

Labor disputes over money and benefits, often peppered with charges of

official corruption, have become frequent as China seeks to streamline or

shed its bloated state- owned factories. If reports in recent days from

Daqing and several other sites are any guide, the scale of unrest is

likely to grow in the months and years ahead as China opens more

industries to competition under World Trade Organization rules.

Millions of middle-aged workers, in particular, say they feel betrayed by

a system that long gave them honor and security, if little money, and that

now seems intent on discarding them.

The unrest has not threatened the rule of the Communist Party, in part

because the police crush any efforts to form independent unions or to

share labor complaints across regions. China's leaders have recently

focused on the stubborn poverty in the countryside, where a majority of

the people live, as a source of instability. But the growing disaffection

of older urban workers, too, is a major preoccupation and the government

has had only limited success in building new social safety nets.

On Sunday in Beijing, the commander of the People's Armed Police, the main

antiriot force, told an officers conference that with China's entry into

the W.T.O. the police must prepare for an increase in "mass incidents,"

the People's Armed Police News reported today.

Workers at the giant Daqing oil complex, who were long exalted as national

heroes, say they were pressured to accept severance agreements that will

strand many in poverty, facing old age without medical insurance or


"We've been cheated and misled," said a woman who gave her last name, Liu.

Ms. Liu, who is in her 30's, took the buyout in December 2000 along with

more than 50,000 other workers and, like most of them, has been unemployed

ever since.

Outraged workers in the aging industrial city of Liaoyang, also in the

northeast, have mounted growing waves of protest. Earlier this month, in a

rare example of cooperation among workers from different industries, 5,000

workers from six bankrupt factories held demonstrations, demanding more

than a year's worth of unpaid wages and pensions and charging that

officials had embezzled the funds.

The standoff there grew today as an estimated 30,000 workers from 20

different factories gathered, demanding the release of a leader who was

arrested Sunday in violation of a public pledge by the authorities,

according to residents and outside rights monitors.

At the Daqing oil fields, workers say they were deceived by managers when

they agreed to the buyouts, sundering the traditional lifetime

worker-factory relationship. Company executives, told to downsize, had

warned the workers of imminent corporate bankruptcy and the likelihood of

massive layoffs with little or no compensation. So more than 50,000

workers, of more than 200,000, took severance offers of up to $500 for

each year of service.

The sums, which were set without negotiation, seemed large at the time,

workers say, and were much higher than the national norm in such

situations. But after more than a year of unemployment and rising

expenses, many of the former employees feel scared and vulnerable.

The protests began when the Daqing Oilfield Bureau announced it would stop

paying the former employees' heating bills. It also said they would have

to make large annual payments themselves if they wished to keep their

medical and old- age insurance. On some days, more than 30,000 Daqing

workers have filled the streets, witnesses say.

"We've discovered that there's a big difference between what we were

promised and what we've been given," said Ms. Liu, who spoke nervously

after receiving a phone call from a reporter. "The managers were very

persuasive and convinced us this was the best deal we could get."

Han Dongfang, an exiled labor advocate, called the Daqing demonstrations

"probably the largest protests over labor issues since 1949." Mr. Han, who

spent time in jail for organizing an independent union in 1989, runs the

China Labor Bulletin in Hong Kong.

The Daqing workers tried to organize but some leaders were detained and

others are now in hiding, Mr. Han said. But the demonstrations have

continued in the oil city, built with legendary hardship in the 1960's on

the cold, marshy plains of Heilongjiang Province and praised by Mao as a

socialist model.

They fueled China's industrialization, but today the Daqing fields produce

more water than oil, output is declining and production costs are

noncompetitive. In 1998, in a national restructuring of oil industries,

they became a subsidiary of the PetroChina Company, which is listed on

stock exchanges in New York and Hong Kong and must pay heed to


Officials of PetroChina, the Daqing Oilfield Bureau and the governments of

Daqing and Heilongjiang Province all declined to comment on the dispute.

The party-run union at the oil fields denied responsibility for the

welfare of the protesters. "These people have terminated their contracts

in return for a lump sum," said an official who did not give his name.

"They are no longer employees of the oil field and they are no longer

members of the trade union."

Riot police have been deployed in Daqing but have so far shown restraint.

The Chinese press has not been allowed to cover the disputes. The

shrinking oil industry is seething with conflict elsewhere as well. Just

this month, disputes over severance terms led to large protests at the

Huabei field in Hebei Province and the Songjiang field in Jilin Province,

a labor official said.

Thousands of labor demonstrations or strikes, usually short-lived, are

reported through internal Government channels each year. Reports seeping

through the censorship in recent weeks suggest how common and seemingly

intractable such conflicts have become.

Last week, as the Daqing protests continued, a more disruptive action

began in a coal mining region in Liaoning Province. Some 10,000 miners in

the town of Fushun, similarly furious over severance packages, have

blocked highways and railroad tracks, according to local residents.

Textile workers are striking in the western province of Sichuan, charging

that state owners are selling off their factory's assets rather than

trying to save it, Mr. Han said. He acknowledges that state industries

must reduce their work forces but said the hostility and misunderstanding

reflect the inability of Chinese workers to organize and bargain.

Ms. Liu, the former employee, said: "In the past, Daqing oil workers were

docile types who obeyed the leaders. Now we feel differently."



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