The Chinese government's refusal to allow independent trade unions is fueling worker protests, Human Rights Watch said in this new report.The 50-page report, "Paying the Price: Worker Unrest in Northeast China," analyzes in detail the demonstrations that took place from March through May 2002 in three cities in northeastern China, and the government response to them. The unprecedented demonstrations lasted longer than any since the 1989 pro-democracy movement. In Liaoyang, metal workers laid off from former state-owned enterprises took to the streets intermittently over a ten-week period. In Daqing, laid-off oil workers encountered a massive show of force and security forces detained at least sixty workers for periods ranging between twenty-four hours and two weeks. In Fushun, thousands of laid-off miners and workers from nearby factories blocked roads and rail lines until they were given limited payouts.
Four key protest leaders in Liaoyang city were indicted on March 30, 2002 after leading a four-year effort to bring workers' complaints to the attention of local authorities. They may be put on trial at any time. Yao Fuxin, Pang Qingxiang, Xiao Yunliang and Wang Zhaoming are charged with "illegal assembly, marches and protests" and could face five-year prison terms. The four men have been held for almost five months with little, if any, access to family and with no legal representation. Across China, state-owned enterprises that once promised workers lifetime employment and a secure retirement have downsized or closed.
From March through May 2002, well-organized workers’ protests in three cities in northeastern China brought unprecedented numbers of disaffected, laid-off, and unemployed workers into the streets. In an area of high unemployment, extensive poverty, conspicuous wealth, and what is widely viewed as endemic corruption, workers protested non-payment of back wages and pensions, loss of benefits, insufficient severance pay, maneuvers intended to bypass elected workers congresses, and unfulfilled government promises to help the unemployed find jobs.
Like previous demonstrations in other areas of the northeastern “rust-belt,” the protests emerged from several years of privatization, down-sizing, and bankruptcies of state-owned enterprises in which workers had been promised lifetime employment and broad benefits. The protests in 2002, however, involved tens of thousands of workers from dozens of factories and mines, and lasted longer than any protests since the violent suppression of the 1989 Democracy Movement.
The Chinese authorities, in response, offered carrots and sticks, but mainly sticks. Government assurances of concern and payment of some benefits and wage arrears were coupled with a massive security force presence, refusal to issue permits for demonstrations, in some cases violence against unarmed demonstrators, short-term detention of protesters with release conditional on pledges to forgo further protests, interference with the right to counsel for detained and arrested workers, and threats to dock the pay of employed workers whose family members took part in rallies. In the city of Liaoyang, four protest organizers were formally indicted on March 30, 2002 after leading a four-year effort to bring workers’ grievances to the local authorities. In Daqing, at least sixty workers reportedly were detained for periods ranging between twenty-four hours and two weeks.
This report looks in detail at protests and the government response in Liaoyang, Daqing, and briefly describes the situation in Fushun, the third city in the northeast that experienced unprecedented labor protests in March through May 2002. In all three cities, protests spilled into the streets because of workers’ frustration at their inability to obtain a meaningful hearing for long-standing grievances. At root, the workers were alleging violation of economic rights—that company directors and local government officials had reneged on promises to provide a range of benefits while doing little to combat the managerial corruption that had drained resources from many of the companies.
At the same time, fundamental violations of civil and political rights, including denial of workers’ rights to form independent labor unions as well as pervasive media censorship, systematically undercut the ability of workers to fully air their concerns and press effectively for redress. As documents collected during the research—including an open letter from laid-off workers in Liaoyang to President Jiang Zemin, translated and provided in an appendix to this report—make abundantly clear, workers took to the streets because of a deeply rooted sense of injustice. The workers felt strongly that they were not receiving their due under existing regulations and had virtually no outlets other than street demonstrations to push for a change in the status quo.
An important and interesting aspect of these cases, however, is the care Chinese authorities took in responding to the public demonstrations. In comparison to aggressive campaigns waged against individuals who tried to form independent political parties and against Falungong adherents, the government’s response was relatively restrained. In part, this may have been because labor unrest threatens the legitimacy of the Chinese Communist Party in a way that other challenges do not: Article 1 of the Chinese constitution claims that China “is a socialist state under the people’s democratic dictatorship, led by the working class…” (emphasis added). The government’s response also suggests that authorities recognize the depth of dissatisfaction among laid-off workers and the popular support the cause might attract: authorities may fear an even greater backlash were they to be viewed as cracking down too hard on workers.
Human Rights Watch research shows that worker dissatisfaction continues to simmer and that many of the underlying grievances have not been addressed. The crisis is by no means over: there are likely to be many more layoffs and cutbacks as China pursues reforms consistent with the terms of its entry into the World Trade Organization (WTO). So long as the underlying problems are not addressed—including violations of basic rights that leave workers without meaningful outlets for redress of grievances as well as continued government efforts to sidestep agreed-on processes and promised benefits in the wake of continued downsizing—it is only a matter of time before there are more confrontations, possibly more serious ones.
The protests described in this report are not isolated incidents. The dismantling of China’s planned economy, which accelerated during the 1990s, left tens of millions of skilled Chinese workers without jobs or the prospect of comparable employment; for most the only option was low-wage, insecure labor, the kind that has become a major component of China’s labor market. As workers’ standard of living collapsed, newly private industries took advantage of restrictions on workers’ right to freely organize to cut back pensions, medical, and other benefits that those laid-off and retired were relying on to survive––and these cutbacks came amid widespread allegations that company managers and state officials were skimming money from the industries for themselves.
In the northeast, workers have been particularly hard hit. This is reflected in the demands highlighted by workers in Liaoyang, Daqing, and Fushun, the three cases featured in this report, during a series of protests from March to May 2002.1
In Liaoyang, in Liaoning province, the Ferroalloy Company’s laid-off metal workers demonstrated intermittently for at least ten weeks starting March 11––first to protest economic grievances and corruption, and, after March 17, to demand the release of workers’ leader Yao Fuxin, who was detained incommunicado for four days before his detention was acknowledged by police. On March 20, public security officers and a unit of the People’s Armed Police (PAP, a paramilitary force) attacked groups of unarmed workers and detained three more elected worker representatives. Yao and the three others––Pang Qinxiang, Xiao Yunliang, and Wang Zhaoming––were formally indicted on March 30 for “illegal assembly, marches, and protests.”
In Daqing, a once-model oil town in nearby Heilongjiang province, arbitrary changes in severance agreements for laid-off workers of the Daqing Oil Company Ltd. (DOCL) provoked protests that began March 1 and continued into April and May. The government responded with a massive show of force that included large numbers of local police, riot police from Harbin, the provincial capital, and army troops; there were sporadic arrests.
In Fushun, developed as a coal-mining town in the early 20th century, thousands of laid- off miners and workers from nearby factories repeatedly blocked roads and rail lines to protest the conditions of their severance. Authorities combined minimal force and minimal payouts––a single payment of 75 renminbi (U.S.$9.00)––stop the protests.
As detailed in this report, local authorities’ responses to the protests demonstrated how the Chinese government has continued to deny rights to freedom of association, expression, and assembly.These rights are guaranteed in Article 35 of the Chinese Constitution as well as in the International Covenant on Civil and Political Rights (ICCPR), which the Chinese government signed in 1998 but has not yet ratified. China’s Law on Assemblies, Procession and Demonstration, however, gives local authorities extremely broad discretion to deny permits for protest gatherings or to arrest those demonstrating without a permit, authority which officials did not hesitate to use. Controls on media expression were evidenced by the national media blackout on the protests––following a period when the issues leading up to the demonstrations had been extensively covered in the labor press.
The International Covenant on Economic, Social and Cultural Rights (ICESCR), which China ratified in 2001, provides that every worker has the right to form and join the trade union of his or her choice. Beyond the right of free association, the Chinese Constitution does not specifically provide for the right to organize trade unions, and instead states that the “state creates conditions for employment, strengthens labor protection, improves working conditions, and, on the basis of expanded production, increases remuneration for work and social benefits”(article 42). In practice, independent labor unions are prohibited. As China has moved from a planned to a market economy during the past two decades, the official All China Federation of Trade Unions (ACFTU) has remained the only legal trade union organization, and existing trade union legislation ensures that workers’ first obligation is to the state.
China also continues to fall far short of fulfilling its responsibilities as a member of the International Labor Organization (ILO), which include respecting and promoting the principles of free association and collective bargaining. Under the ILO Declaration on Fundamental Principles and Rights at Work (ILO Declaration), China is bound by this obligation even though it has not ratified the ILO conventions governing these rights (ILO Convention No. 87, Convention concerning Freedom of Association and Protection of the Right to Organize, and ILO Convention No. 98, Convention concerning the Application of the Principles of the Right to Organize and to Bargain Collectively). In 1998, the ILO Committee on Freedom of Association, which examines complaints of alleged infringements of the exercise of trade union rights, found that China’s Trade Union Law “prevented the establishment of trade union organizations that are independent of the public authorities and of the ruling party, and whose mission should be to defend and promote interests of their constituents and not to reinforce the country’s political and economic system.”2
1.Immediately and unconditionally release all persons detained for peaceful activities to promote the rights of workers to freely associate, including the right to form and join trade unions of their own choice; to peacefully assemble to protect and advance their rights; and to exercise their right to freedom of expression on behalf of workers and their concerns. This includes persons detained for formation of autonomous trade unions during the 1989 pro-democracy movement and in 1992 and 1997-98; those held for protesting wage and pensions arrears and other conditions affecting their work or unemployment conditions; and those held solely because they exposed workers’ problems to a broad audience within China or to the international media.
2.Amend all relevant Chinese laws and regulations, such as the Trade Union Law, to bring them into conformity with the International Covenant on Economic, Social and Cultural Rights (ICESCR), ratified by China in 2001, and to fulfill its obligations as a member of the International Labor Organization (ILO) to respect and promote free association and collective bargaining for workers.
3.Rescind the reservation to Article 8(1)(a) of the ICESCR, and respect the right of workers to form and join their own trade unions so as to “promote and protect” their own “economic and social interests.”
4.Ratify and implement ILO conventions No. 87 and No. 98, applicable to freedom of association and the rights to organize and to bargain collectively. China should agree to a direct contact mission from the ILO to discuss ways of reforming its labor laws and practices to bring them into conformity with international freedom of association standards.
5.Ratify the International Covenant on Civil and Political Rights without reservations that would affect workers’ rights to freedom of assembly, association, and expression; to form and join trade unions of their own choice, to bargain collectively; and to strike.
6.Revise the “PRC Law on Assemblies, Procession, and Demonstration” to eliminate articles that discriminate against those whose views are politically unacceptable.
1.Continue to monitor China’s compliance with the right to freedom of association with respect to workers’ freedom to organize and bargain collectively.
2.Continue to urge China to accept a direct contact mission from the ILO to discuss ways of reforming its labor laws and practices to bring them into conformity with international freedom of association standards.
1.During human rights dialogues and in trade talks, press China to lift its reservation on the International Covenant on Economic, Social and Cultural Rights, release those detained for activities on behalf of worker rights, and accept an ILO direct contact mission.
2.Urge embassy and consular officials to visit Liaoyang, Daqing, and Fushun, and to encourage Chinese authorities to allow access by foreign and domestic journalists.
3.Request permission for diplomatic observers to attend the trials of worker representatives; seek to open the trials to foreign journalists.
[1] Note on methodology: this report is based on interviews in China conducted by Human Rights Watch, supplemented with publicly available primary source materials, Chinese and international media reports, and other secondary sources.
[2] International Labour Office, “310th Report of the Committee on Freedom of Association,” Official Bulletin, vol. 81, Series B, no. 2 (1998).
Beginning in the late 1970’s, China’s leaders turned to radical economic reform to speed the process of China’s transformation into a strong, economically viable, and stable state. Centralized planning would eventually be replaced with a “socialist market economy,” a mix of heavy reliance on market forces and continued state-ownership of key enterprises. Even as state factories downsized or shut down altogether as the market came to define and clarify labor relations—and as the state no longer decided who should work, where, and at what—workers found themselves increasingly vulnerable and without the tools to protect their interests.
In 1978, two years after the death of Chairman Mao Zedong, and almost thirty years after the Chinese Communist Party (CCP) came to power, China was experiencing a severe economic and political crisis. Living standards were falling; voices of dissent were on the rise. Former Red Guards sent to the countryside during the Cultural Revolution (1966-1976)—ostensibly to "learn from the peasants" but with the happy coincidence of reducing urban unemployment—were illegally returning to the cities in droves, up to 10,000 in Beijing alone. By 1979, urban unemployment stood at nearly 6 percent, with many returnees living by theft, begging, and prostitution.3 That same year, the Democracy Wall movement (1978-81) exploded onto the streets: people marched for democracy, against corruption, and to demand a decent standard of living.4
Deng Xiaoping, acknowledged as China’s paramount leader in 1978, lost no time in setting a new economic direction. Having recognized the need to make state-owned enterprises (SOEs) economically competitive and profitable, planners began dismantling the old model. State factories that had been the engine of remarkable economic growth during the 1950s, especially in the northeast, by the late seventies suffered from poor management, outdated technology, and chronically low productivity. In addition, the need to attract foreign capital led the CCP to experiment with special economic zones; the zones’ phenomenal economic success reinforced the new model.
By the mid-1990s the policy of “reform and opening up” had led to a boom in privately funded Chinese enterprises and in the number of foreign multinationals operating in China. But even in this new landscape, the government would not allow labor the same degree of independence it had granted management. SOE workers’ rights and representation remained what they had been when the state guaranteed employment and retirement benefits, and when labor in state-owned factories was the subject of “emulation” campaigns.
Until the late 1970s, China’s leaders managed to impose a degree of labor stability in the country. Preoccupied with maintaining industrial peace, and fully aware of the central role SOEs played in the post-1949 economy, the government made important concessions to urban workers under a “low wage-high welfare” system. The state guaranteed both “lifetime” employment with wages independent of productivity and profits, and a secure retirement.5 Benefits included virtually free housing, health care, subsidized food and fuel, home-leave travel allowances, pensions and education––what was called the “iron rice bowl.”6 Even so Chinese workers refused to repudiate the militancy that had begun in the 1920s and clashes with the CCP occurred periodically. But as the state gradually reneged on its promises of stable work and comprehensive benefits, the strict limits on workers’ rights to form independent unions, bargain collectively, or strike left them without effective mechanisms for contesting summary dismissal, enforced early retirement, and cuts in pensions and medical benefits. And as managers and corrupt officials stripped old, bankrupted state factories of their assets or mismanaged privatized factories, workers’ sense of grievance intensified.
In July 1994, after more than a decade of trial regulations and pilot projects to facilitate market reforms, the National People’s Congress, China’s legislature, enactedthe country’s first labor law.7 It reaffirmed the control individual enterprise directors had over the hiring and firing of workers, their wage scales, and their social welfare benefits, and replaced lifetime employment with a limited-term contract system. A one-party state and restrictions on freedom of association gave Chinese workers no opportunity to play a part in formulating the new law.
In September 1997, the 15th Congress of the Chinese Communist Party formally announced a further restructuring of state-owned enterprises and widespread implementation of gufenzhi, the transfer of enterprise ownership from the state to shareholders; the process of privatizing SOEs accelerated rapidly.
A decade ago, the official media routinely hailed Chinese workers in state-owned enterprises as the vanguard of China's workforce, the linchpins of the drive for a strong, modern state. The relatively privileged position of SOE workers led economic analysts and even some Chinese labor dissidents to regard them as a modern-day “labor aristocracy.”8 Now these same workers are frequently stereotyped as stuck in an old-fashioned time warp, one that no longer fits China’s economic reality. This official discourse, common in contemporary newspaper accounts, urges workers in the former SOEs to “liberate their thinking and grasp reform” (jiefan sixiang zhua gaige).9 Membership in the World Trade Organization (WTO), they are told, will bring on more closures and bankruptcies; they must be prepared to pay the price for a transformation that, in the long run, will benefit everyone.
Government reemployment agencies and centers inform middle-aged, skilled former SOE workers that only unskilled work is available, and for such jobs “there is no longer an eight-hour day in China.”10 Added pressure on the urban labor market and laid-off SOE workers comes from rural migrants willing to settle for lower wages and shorter employment contracts in the low-tech, labor-intensive sector. Han Zhili, who runs a citizens’ advice center in Beijing, summed up the problem: The current situation, he said, is “forcing workers to labor long hours for very low wages.”11 Nor do these workers receive welfare benefits. The old “low wage, high welfare model” has become “low wage, low welfare.”
Between 1996 and 2000 31.4 million SOE workers were laid off, a reduction of 27.9 percent. In urban collectively-owned enterprises, the number of employees fell by 15.2 million or 50.3 percent.12 Figures released by the Ministry of Labor and Social Security (MOLSS) put these figures in context.
The employees of state and collective enterprises and institutions accounted for 37.3 percent of total urban employees in 2001, down from 99.8 percent in 1978. Meanwhile, the number of employees of private, individually owned and foreign-invested enterprises has increased dramatically.13
Estimates of total urban joblessness vary. According to scholars at the Beijing-based Development Research Center (DRC), a government think tank, it averages around 8-9 percent––the official rate, by contrast, is 3.6 percent.14 However, joblessness in industrial rust belts, such as northeast China is much higher, averaging at least 20 percent.15 Ministry of Labor and Social Security (MOLSS) researchers and academics put the figure at 7 per cent16 but their estimate does not include laid-off (xia gang) workers.17
In March 2002, overall urban and rural unemployment stood at 170 million, with laid-off SOE workers totaling 5.15 million and formally registered unemployed workers, many of them former SOE employees, accounting for another 6.81 million.18 This latter figure is expected to rise dramatically during 2002 as more SOEs shut down in the face of increased competition and in conformity with a government requirement that the laid-off (xia gang) category be phased out and all workers registered as unemployed (shiye). The MOLSS in its AprilWhite Paper on Employment and Social Security predicts the number of urban jobless will top 20 million within four years.19 Although the White Paper does not say how many will come from SOEs, Vice-premier Wu Bangguo said on June 8, 2002, that SOE reform, including bankruptcy for unprofitable plants, was vital to economic restructuring.20
Human Rights Watch spoke with seventeen employed and former SOE workers, fourteen men and three women, in three areas during early 2002. Many of them expressed the view that, having given the best years of their lives to constructing modern China, they have now been sacrificed in the name of a different, imposed model of development, one which workers had no voicein designing.21
A typical story is that of Mrs. Liang, a middle-aged textile worker from Harbin city in Heilongjiang province, who said that for most of her working life she regarded her low wages as a trade-off for basic labor insurance including medical care and a pension.22 In the mid-nineties, at age forty-eight, she was forced into early retirement; since March 1999 she has received only 70 percent of her monthly pension.23
A listener from Fujian province explained a similar situation in his hometown during a telephone interview with the host of Radio Free Asia's labor rights program:
I don’t feel optimistic. It’s especially bad for workers in their fifties and sixties. They have worked hard all their lives, but now that they are retired, there are many who don’t get their pensions [entitlements]…We are a small county town down here and many work units owe their retired workers several months in unpaid pensions.24
As one former auto worker said when she and two hundred employeesof the former Beijing Automobile and Motorcycle Works blocked traffic in the capital for six hours in March 2002 to protest alleged management corruption, forced retirements, and denial of worker benefits:
When we were young, we endured hardship and exhaustion at the factory, and now we are old and sick. But they don’t give any welfare for us to live on, so we get sicker. And then when we buy our medicines they don’t reimburse us.25
Corruption, which has flourished with privatization, is made easier by workers’ inability to organize, monitor management, or protest effectively. In this regard, labor activists face not only the legal limits on workers’ rights and the fact that corruption contributes to bankruptcies and lay-offs, but also the government’s discomfort with any unsanctioned activity that reflects badly on the new economic model. One veteran anti-corruption campaigner, for example, former Party member Zhou Wei, received a two-year administratively imposed term in a reeducation labor camp––on the bizarre charge of “reporting for the masses”––because he led an effort to expose the corruption of the mayor of Shenyang, the capital of Liaoning province.26 In March 1999, Zhou accused Mayor Mu Suixin of involvement in an illegal pyramid scheme which collapsed, wiping out the life savings of thousands of people. On May 6, 1999, police took Zhou from his home; the next day he was sent to Dragon Mountain Labor Camp, where he served out all but one month of his administrative sentence. Mayor Mu was indicted on corruption charges:
When investigators searched two country houses belonging to Shenyang’s mayor, they found U.S.$6 million worth of gold bars hidden in the walls, 150 Rolex watches [and] computer files documenting years of illegal activities.27
The illegal or unsanctioned loss of SOE assets as a result of economic restructuring was the subject of a major conference held May 29-30, 2002 in Wuhan, Hubei province. Conference participants––including delegates from Petrochina (see Daqing section)–– judged systemic corruption to be a major factor underlying the problem:
…a minority of leading cadres from [SOE] enterprises collaborate with directors from unlawful private enterprises or small company bosses for mutual profit, [resulting in] chaotic investments, subcontracting arrangements and loans in which they jointly embezzle and divert state assets and property.28
Labor activists in Liaoyang wrote a letter to Jiang Zemin, China’s president, that made similar observations about the director (changzhang) of the Ferroalloy Company:
His close aides, friends and relatives were placed in company positions from which he could directly benefit. At the instigation of Liaoyang’s former mayor and party secretary…, [the director] set up a number of independent enterprises––such as the Ya Po Company, Pengejin Factory, and the Sai De Company––and arranged fictitious domestic and foreign links and contacts. These people worked hand in glove as a team to swallow up billions of yuan in national funds resulting in losses of tens of billion of yuan in state property.29
The ACFTU, a complex organization with a reported membership of over 120 million workers, is the only legally recognized trade union in China. Its traditional role, as a largely unquestioning conduit from the Chinese government and the Chinese Communist Party (CCP) to the working class, has been the ACFTU’s strength as well as its weakness. Links with the CCP and with SOE management give it some limited authority within factories and other work units, but workers criticize precisely those links as evidence that the ACFTU lacks independence.30 “Why should I go to the trade union?” workers frequently said to Human Rights Watch. “There is no difference between them and the boss.”31
Indeed, calls for more trade union autonomy––often fueled by labor unrest––have characterized internal debates in the ACFTU since the 1950s.32 What has changed is the far more complex economic environment in which the ACFTU now operates. In 1982, the apparent convergence of workers’ interests with those of the state and the entire nation was used to justify eliminating workers’ right to strike from the Chinese constitution. A veteran legal scholar noted in 1982 that workers had no need of the right because “Chinese enterprises belong to the people.”33 Now, industrial ownership is far more diverse. In 2000, the private sector contributed more than half of China’s Gross Domestic Product (GDP) and private firms employ over 130 million workers.34 During the 1990s, SOE contribution to GDP dropped from 65 percent to 42 percent.35
As private entrepreneurship emerged as a crucial component of state policy, the ACFTU lobbied for a Labor Law and a new Trade Union Law to meet the new realities. It trained thousands of cadres in dispute arbitration, and it launched organizing drives in privately owned companies. Such efforts were not particularly successful. In a speech to ACFTU cadres in 2000, the union’s chairperson, Wei Jianxing, pointed out that less than half of eligible workers were unionized:
…a considerable number of trade union organizations [and branches] have collapsed and their members washed away. On the other hand, the organization of trade unions in newly established enterprises has simply not happened. At the end of 1999, national trade union membership dropped to eighty-seven million, leaving more than one hundred million workers unorganized. When there is not even a trade union, what is the point of talking about trade unions upholding the legal rights of workers? Or trade unions being the transmission belt between the Party and the masses? Or trade unions being an important social pillar of state power? 36
Although some ACFTU officials would like to be more effective, given the current landscape CCP policy toward the union’s role has not changed. It is still aimed at using the ACFTU to help create a stable political and economic environment, a task made more urgent by the need to both attract and compete with foreign capital. Organizing or even supporting collective action for jobs and wages is deemed incompatible with these goals, thus cannot be supported by the ACFTU. In 1998, Vice-Premier Hu Jintao (widely expected to become China’s next president and Party leader), articulated the Party’s line on trade union independence and the related right to freedom of association:
Chinese trade unions are mass organizations of the working class under the leadership of the Party, act as a bridge linking the Party with staff and workers and play a role as a key social pillar of the state political power… I hope that all levels of trade unions will consciously accept the leadership of the Party while independently carrying out their work…[and] consciously submit to and serve the major tasks of the Party and the state.37
Thus, as one worker explained about the ACFTU’s participation in a campaign to keep a factory open, “We [Ferroalloy workers] have been to the ACFTU on a number of occasions, but they’ve never taken any real notice of us.”38 When the families of detained Liaoyang workers approached the ACFTU complaints office in Beijing for help in obtaining the detainees’ releases, they were told to send the case details in a letter.39
It is not that all ACFTU cadres and officials, particularly at the shop floor level, are necessarily unsympathetic. An official of the Liaoyang branchof theFederation of Trade Unions,when asked if local people were supporting the Ferroalloy workers’ protests, told Radio Free Asia, “Of course they are! The city leaders are in the wrong!”40 But the union’s maneuvering room is extremely limited. In April, the government’s Central Publicity Department issued a serious critique of the Workers’ Daily, ACFTU’s official newspaper, warning that the paper was violating the Party line by featuring articles on economic restructuring and worker rights without taking into account the “overall national interest.”41 Given the ACFTU’s dual mandate, it is hardly surprising that Workers’ Daily failed to carry articles about the March-May protests in Daqing, Liaoyang, and in other areas in China’s northeast.
The absence of freedom of association remains a critical issue in China, but the dual position of the ACFTU––as upholder of working-class interests and as loyal servant to the Party––makes it impossible for the union to promote free association in accordance with international standards. At no point over the last twenty-five years, despite widespread unemployment, serious labor law violations, and appallingly dangerous working conditions, has the ACFTU attempted to distance itself from the CCP leadership or to question its policies. It has not defended the principle of independent union organizing, and it has never spoken out against laws and regulations routinely employed to justify imprisonment of labor activists who organize outside its aegis.42
In fact, most Chinese laws that address the issue reinforce the Party loyalty side of the duality. The Trade Union Law (TUL) illustrates the point. The ACFTU sought revision of the 1950 law during the late 1980s so as to reinterpret workers’ rights in light of the new realities. Although revised versions of the law finally were adopted in April 1992, and again in October 2001, the section on union purposes and goals retained and even strengthened language establishing the union’s subservience to Party leadership:
Trade unions shall observe and safeguard the Constitution, take it as the fundamental criterion for their activities, take economic development as the central task, uphold the socialist road, the people’s democratic dictatorship, leadership by the Communist Party of China, and Marxist-Leninism, Mao Zedong Thought and Deng Xiaoping Theory, persevere in reform and the open policy, and conduct their work independently in accordance with the Constitution of trade unions.43
The Trade Union Law goes on to specifically outlaw the formation of trade unions independent of the ACFTU.44
The Chinese government has consistently moved quickly to quash independent labor organizing efforts. For example, active involvement in organizing workers led to charges of subversion, a three-hour trial, and a ten-year prison sentence for one Gansu-based activist, Yue Tianxiang. A former driver he had undertaken in early 1999 to represent 2,000 workers who like him had lost their jobs and could not collect months of back wages.45 Between August 1998 and June 2002, at least twenty-nine workers were detained or sentenced to terms ranging up to ten years for peaceful labor-related activities.
The Trade Union Law and official practice contravene the principles of the International Covenant on Economic, Social and Cultural Rights (ICESCR), ratified by China on March 27, 2001. Article 8(1)(a) of the ICESCR provides that states parties to the covenant undertake to ensure “[t]he right of everyone to form trade unions and join the trade union of his choice, subject only to the rules of the organization concerned, for the promotion and protection of his economic and social interests.”46 China is also a signatory to the International Covenant on Civil and Political Rights, which states in article 22 that: “Everyone shall have the right to freedom of association with others, including the right to form and join trade unions for the protection of his interests.”47
When China ratified the ICESCR, the National People’s Congress declared that the application of Article 8(1)(a) must be consistent with the Trade Union Law––precisely the law that denies Chinese workers the right to organize independent unions. It is the view of Human Rights Watch that the declaration is incompatible with the object and purpose of the treaty, and thus China should be held to the full terms of the article. This is consistent with the position of the Human Rights Committee, which monitors the compliance of states parties with the International Covenant on Civil and Political Rights. The Human Rights Committee, seeking to clarify the standard set in the Vienna Convention on the Law of Treaties,48 stated in its General Comment 24 of 1994 that any statement made at the time of ratification that “purports to exclude or modify the legal effect of a treaty . . . is a reservation.”49 Reservations should be regarded as null and void to the extent that they violate the object and purpose of the Covenant.50
China has nonetheless used its reservation to the ICESCR to justify the legality of the ACFTU’s on-going legal monopoly on trade union organizing in China and thus continuation of its underlying role as a “transmission belt” for communication between the Party and government on one hand and workers on the other. However, it does nothing to solve the problem of what happens when the interests of Party and workers clash.
China also has continued to ignore its responsibilities as a member of the International Labor Organization (ILO), which include respecting and promoting the principles of free association and collective bargaining. The ILO declaration on Fundamental Principles and Rights at Work recognizes freedom of association and the right to collective bargaining as “fundamental rights.”51As an ILO member, China is bound by this obligation even though it has not ratified the ILO conventions governing these rights.52 In 1998, the ILO Committee on Freedom of Association concluded that China’s Trade Union Law “prevented the establishment of trade union organizations that are independent of the public authorities and of the ruling party, and whose mission should be to defend and promote interests of their constituents and not to reinforce the country’s political and economic system.”53 The same criticisms apply to the current version of the law.
China’s unwillingness to respect its obligations under international law also led the International Confederation of Free Trade Unions (ICFTU) to submit a complaint, focusing on arrests and repression of workers and on blatant denial of freedom of association in the northeast, to the ILO’s Committee on Freedom of Association on March 15.54 The text of the complaint includes, as an example, a declaration by a local branch of the ACFTU commenting on the emergence of an independent association of laid-off workers. The declaration emphasizes that “[T]he ACFTU will not tolerate workers organizing in this way.”55
[3] Charlie Hore, China: Whose Revolution (London: Socialist Workers Party, 1987), p.15.
[4] Tim Pringle, “Class Conflict in the People’s Republic – Chinese Workers and the Struggle to Organize,” Paper presented at Eighth International Conference on Alternative Futures and Popular Protest, Manchester, April 2-4, 2002 (copy on file at Human Rights Watch).
[5] “Workers in a State of Disunion,” South China Morning Post, March 23, 2002.
[6] Workers in smaller SOEs outside the main industrial centers received much less comprehensive benefits.
[7] Labor Law of the People’s Republic of China, adopted at the Eighth Meeting of the Standing Committee of the Eighth National People’s Congress of the People’s Republic of China on July 5, 1994, entered into force January 1, 1995, http://www.acftu.org.cn/labourlaw.htm (accessed on April 9, 2002).
[8] A term originally coined by Engels to describe the better-off segment of the English working class in the 19th century. During a radio interview in the fall of 1998 with reporter Li Wanfang on Radio Free Asia (RFA) “Eyewitness Report,” labor activist Zhang Shanguang used it to describe the pre-reform status of SOE workers in China. He was later imprisoned on charges of “illegally providing intelligence to overseas organizations” in part for the RFA interview.
[9] See, for example, “Jiefang sixiang zhua gaizhi, qiu zhen wushi zhu huihuang” (“Liberate Ideas and Grasp Restructuring, Go for Glory but Maintain Pragmatism”), Datong Daily (Shanxi province) January 10, 2001, http://www.dtzc.gov.cn/xingyun/newpage6.htm (accessed on April 12, 2002).
[10] Interview quoted in Tim Pringle, “Industrial Unrest in China – A Labor Movement in the Making,” Asian Labour Update, Issue 40 (July-September 2001), p. 10.
[11] Wu Zhenguang, “Laozi chongtu shengji weiji shehui wending” (“Rising labor disputes threaten social stability,”) Xinwen Zhoukan (published by China's Department of Labor and Social Security, Guangzhou, China), September 9, 2001.
[12] Qiao Jian “Wei danxing jiuye yingzao geng hao de fazhan huanjing – yi 2001 nian zhongguo Liaoning Anshan shi danxing jiuye diaocha wei li” (“Flexible Employment in China – An Example from a Survey on Flexible Employment in Anshan City 2001”),paper given at Forum on Industrial Relations and Labor Policies in a Globalizing World, January 9-11, 2000 (copy on file at Human Rights Watch).
[13] Ministry of Labor and Social Security, “White Paper on Employment and Social Security,” issued by the Information Office of the State Council, April 29, 2002.
[14] Matthew Forney, “Workers Wasteline,” Time Magazine, June 17, 2002, http://www.time.com/time/asia/covers/1101020617/cover.html, (accessed on June 20, 2002).
[15] David Hsieh, “China jobless figures enter danger zone, Experts agree the red line of 7 percent unemployed has been crossed. Now the debate is about social unrest to follow,” Straits Times, June 15, 2002.
[16] Mo Rong, “Dangqian zhongguo jiuye xingshi yu jiaru WTO hou de zhengce jianyi” (“Employment Situation and Policy Advice After China Accedes to WTO”), paper presented at Forum on Industrial Relations and Labor Policies in a Globalizing World, Beijing, January 9-11, 2002 (copy on file at Human Rights Watch). See also Deng Ke, “China’s actual unemployment rate has reached a critical point,” Nanfang Zhoumo (Southern Weekend), June 13, 2002, wysiwyg://502/http://www.sinopolis…Archives.TOPSTORY/ts_020621_01.htm (accessed on April 8, 2002).
[17] Laid-off (xia gang): applies to SOE workers sent home but formally kept on the company books. Where this usage of “laid-off” is intended, this report includes xia gang in parentheses afterward. All other uses of “laid-off” in this report (i.e., those without the Chinese term in parentheses) carry the usual English language meaning of “out of a job” and do not imply anything about whether the worker does or does not remain formally on the company books. Legally, xia gang workers are entitled to monthly stipends, medical cost re-imbursement, and job re-training. In practice, stipends have been paid irregularly and medical expenses reimbursed sporadically. The xia gang policy began to be phased out in May 2001and affected workers became formally unemployed. They could then apply for unemployment benefits paid from monies contributed to a labor insurance fund by employers and employees. A major problem has been the failure of employers to make required contributions.
[18] ICFTU-APRO Labour Flash, Issue 1047, February 15, 2002, http://www.icftu-apro.org/flash/flash1047.html (accessed on June 12, 2002).
[19] Ministry of Labor and Social Security, “White Paper…”
[20] “China Vows to Continue SOE Reform,” People’s Daily Online, June 8, 2002, http://english.peopledaily.com.cn/200206/08/print20020608_97438.html (accessed on July 24, 2002).
[21] Human Rights Watch interviews, February 2002.
[22] Human Rights Watch interview, Harbin, March 2, 2002. The interviewee’s full name has been withheld to protect her anonymity.
[23] Ibid.
[24] Renmin Ribao de kuazhang, Radio Free Asia, China Labor program broadcast in December 1998; transcribed in “Gaige yu geming weiji,” published by China Labour Bulletin (May 2000), p. 109.
[25] Jonathan Ansfield, “Beijing retirees cry foul, protest outside plant,” Reuters, March 27, 2002.
[26] Zhou first led an anti-corruption delegation in 1997 when retired workers and senior cadres went to Beijing to expose the practice of asset-stripping in Shenyang; he received a fifteen-day administrative sentence. James Kynge, “China's jailed corruption campaigner tells his tale,” Financial Times, July 6, 2001.
[27] Ronald Hilton, “Corruption in China: Shenyang,” quoting correspondence from John Pomfret, WAIS Forum on China, March 6, 2002, http://www.stanford.edu/group/wais/china_corruptioninchinashenyang3602.html (accessed on July 24, 2002).
[28] “Yanjiu shentao yufang duice, qiye guyou zichan liushi wenti yinqi guanzhu” (“Research is required to discuss countermeasures and prevention of SOE capital and asset loss which is causing concern”), Xinhua (Online), May 30, 2002, http://news.xinhuanet.com/fortune/2002-05/30/content_416469.htm (accessed on July 24, 2002).
[29] “Appeal to the Leadership after a Fruitless Four Year Struggle Against Corruption. The workers are being persecuted and need your support,” Open Letter to Jiang Zemin posted by “The unemployed former workers of the bankrupt Liaoning, Liaoyang Ferroalloy Factory” on walls in the vicinity of the Liaoyang Ferroalloy Factory and government buildings in Liaoyang, March 5, 2002.
[30] Until recently SOE workers in urban areas belonged to work units (danwei). These units were usually organized according to industrial sectors; thus one danwei covered several SOEs. By and large, the union's responsibility within an individual SOE was confined to administering welfare benefits and organizing labor competitions and entertainment.
[31] Human Rights Watch interview with a migrant worker from Sichuan province, Guangzhou, February 2, 2002.
[32] See Tim Pringle, “The Chinese Working Class—Fiction and Reality,” China Human Rights Forum (published by Human Rights in China), No.1 (2002), p. 12.
[33] Zhang Youyu, “Guanyu xiugai xuanfa de ji ge wenti” (“Questions Regarding the revision of the Constitution”), Xuang lunwen ji (Theses on the Constitution), (Beijing: Qunzhong Publishing House, 1982).
[34] “Private Entrepreneurs Win Socialist Prizes,” Xinhua, April 30, 2002, http://202.84.17.73:7777/Detail.wct?RecID=65&SelectID=1&ChannelID=6034&Page=4 (accessed on June 8, 2002). According to official figures, some 80 million workers do not belong to trade unions although they are not counted as working for private firms. Two factors help explain this seeming anomaly. Many firms still exist in a kind of limbo between private ownership and what are called township and village enterprises (TVEs). In reality, these are largely privately owned. However the government designates them as “collectively owned” without ever precisely explaining what this entails. In 1997, over 120 million people, almost entirely non-unionized, were employed in TVEs. In addition, beginning in the 1980s, many ACFTU branches collapsed, often a result of management reforms.
[35] “Guo qi zhan gongye chanzhi jiang zhi” (“SOE share of GDP drops to forty-two percent”), Ming Pao, May 10, 2002.
[36] Wei Jianxing, “Renzhen xuexi guanche dang de shiwu ju wu zhong quan hui jingshen. Jin yi bu jia kuai xin jian qiye gonghui zu jian bufa” (“Conscientiously implement the spirit of the fifth plenary session of the 15th Central Committee and increase the pace of organizing and establishing trade unions in new enterprises”), speech delivered at a national conference on organizing in new enterprises, November 12, 2000, http://www.bjzgh.gov.cn/jianghua/5_jianghua_13.php (accessed on June 5, 2002).
[37] All China Federation of Trade Unions, “Zhongguo gonghui shisan da wenjian huibian” (“Documents from the 13th Congress of the ACFTU”), (Beijing: China Workers’ Press, 1998), p. 11.
[38] Radio Free Asia interview with Liaoyang Ferroalloy Company worker representative Xiao Yunliang, March, 19, 2002; English translation of the transcript, http://iso.china-labour.org.hk/iso/article.adp?article_id=2146 (accessed on April 12, 2002).
[39] “Liaoyang organizer released,” China Labor Bulletin Press Release, April 23, 2002, http://iso.china-labour.org.hk/iso/article.adp?article_id=2386 (accessed on April 24, 2002).
[40] Radio Free Asia, March 21, 2002. English translation of transcript, http://iso.china-labour.org.hk/iso/article.adp?article_id=2316 (accessed on March 30, 2002).
[41] Vivien Pik-Kwan Chan, “Reports on plight of workers earn rebuke,” South China Morning Post, May 4, 2002. So far as can be determined, no specific article was singled out.
[42] This is not to imply that serious disagreement with the current Party leadership does not exist within the senior ranks of the ACFTU. On July 15, 2001, Han Yaxi, former Alternate General Secretary, Head of Propaganda and Education Department of the ACFTU co-authored a critique of Jiang Zemin’s July 1, 2001 “Three Represents” speech welcoming entrepreneurs into CCP ranks. In a letter to Jiang and the Party's Central Committee, Han took issue with the president's claim that the status of China's working class had not changed:
Your comments are incomplete… In reality, however, what remains in the relations between the workers and businesses is a contract relationship between employees and employers…. Workers enjoy extremely little of democratic rights in enterprises, and even that little they have is not guaranteed at all…. Workers leave their work posts, and their seniority benefits are bought out, all as they are ordered. Nowadays masses of workers have lost their jobs; they can resort to no means to halt the process…. The conditions of the workers in private businesses of either domestic or foreign investment are even worse, insufferable, and without any guarantee [sic] (Ma Bin and Han Yaxi, “A Letter to Comrade Jiang Zemin and the Party’s Central Committee,” Monthly Review, May 2002, http://www.monthlyreview.org/0502cpc3.htm [accessed on June 19, 2002]).
[43] Trade Union Law of the People’s Republic of China, Article 4, adopted at the 24th Meeting of the Standing Committee of the Ninth National People’s Congress on October 27, 2001, http://www.acftu.org.cn/unionlaw.htm (accessed on May 1, 2002).
[44] Ibid., Article 10.
[45] Yue and two other unemployed workers took the Tianshui City Auto Transport Company to arbitration, set up the newsletter Chinese Workers’ Monitor, and wrote an open letter to Jiang Zemin denouncing corrupt management practices. Within one week they were arrested and charged with “subverting the government.” Yue was sentenced on July 5, 1999. That same year, Hunan labor activist Zhang Shanguang was sentenced to a ten-year term on subversion charges for organizing the Shupu County Association for Laid-Off Workers and telling foreign reporters about it.
[46] “International Covenant on Economic, Social and Cultural Rights,” adopted and open for signature, ratification and accession by General Assembly resolution 2200 A (XXI) of December 16, 1966, entry into force: January 3, 1976, in accordance with article 27.
[47] International Covenant on Political and Civil Rights, adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of December 16, 1966; entry into force: March 23, 1976, in accordance with article 49. China became a signatory to the ICCPR in 1998.
[48] Vienna Convention on the Law of Treaties, 1155 U.N.T.S. 331, entered into force January 27, 1980.
[49] Human Rights Committee, “General Comment 24 (52), General comment on issues relating to reservations made upon ratification or accession to the Covenant or the Optional Protocols thereto, or in relation to declarations under article 41 of the International Covenant on Civil and Political Rights,” U.N. Doc. CCPR/C/21/Rev.1/Add.6 (1994).1.
[50] Human Rights Committee, “General Comment 24” (“The normal consequence of an unacceptable reservation is not that the Covenant will not be in effect at all for a reserving party. Rather, such a reservation will generally be severable, in the sense that the Covenant will be operative for the reserving party without benefit of the reservation”). For a fuller discussion of this issue, see Appendix 4.
[51] “Convention No. 87, Convention concerning Freedom of Association and Protection of the Right to Organize” (Date of Coming into force: July 4, 1950) and “Convention No. 98, Convention concerning the Application of the Principles of the Right to Organize and to Bargain Collectively,” (Date of coming into force, July 18, 1951), both reprinted in International Labour Conventions and Recommendations 1919-1991, Volume 1, (1919-1962) (Geneva: International Labor Organization, 1992). Convention No. 87 protects the rights of workers “subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorization.” It further states that: “Workers and employers’ organizations have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organize their administration and activities and to formulate their programs… The public authorities shall refrain from any interference which would restrict this right or impede lawful exercise thereof.” Article 98 protects workers’ and employers’ organizations against: “any acts of interference by each other or each other’s agents or members… In particular, acts which are designed to promote the establishment of workers’ organizations under the domination of employers or employers’ organizations, or to support workers’ organizations by financial or other means, with the object of placing such organizations under the control of employers or employers’ organizations, shall be deemed to constitute acts of interference within the meaning of this article.”
See also “Declaration concerning the aims and purposes of the International Labor Organization,” http://www.ilo.org/public/english/about/iloconst.htm#a19p5 (accessed on July 24, 2002):
The General Conference of the International Labor Organization meeting in its Twenty-sixth Session in Philadelphia, hereby adopts this tenth day of May in the year nineteen hundred and forty-four the present Declaration of the aims and purposes of the International Labor Organization and of the principles which should inspire the policy of its Members. The Conference reaffirms the fundamental principles on which the Organization is based and, in particular, that: (a) labor is not a commodity; (b) freedom of expression and of association are essential to sustained progress; (c) poverty anywhere constitutes a danger to prosperity everywhere; (d) the war against want requires to be carried on with unrelenting vigor within each nation, and by continuous and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of governments, join with them in free discussion and democratic decision with a view to the promotion of the common welfare.
[52] “[A]ll Members, even if they have not ratified the Conventions in question, have an obligation arising from the very fact of membership in the Organization to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights which are the subject of those Conventions.” International Labor Conference, ILO Declaration on Fundamental Principles and Rights at Work, 86th Session, Geneva, June 18, 1998.
[53] International Labour Office, “310th Report of the Committee on Freedom of Association,” Official Bulletin, vol. 81, Series B, no. 2 (1998).
[54] International Confederation of Free Trade Unions, “Letter to ILO Director-General Juan Somavia concerning Freedom of Association: Case No. 2189 (People’s Republic of China),” June 2, 2002, http://www.icftu.org/displaydocument.asp?Index=991215393&Language=EN (accessed on June 17, 2002).
[55] Ibid.
A core principle of the human rights regime is the indivisibility of civil, cultural, economic, political, and social rights. That is, violations within one group of rights almost always impact the realization and enjoyment of a second group of rights. This is evident from the experience of Chinese workers who for decades have been restricted in their capacity to negotiate improvements in the terms and conditions of their work and therefore their economic security because of state prohibition against forming independent trade unions and restrictions on political participation.
As a party to the International Covenant on Economic, Social and Cultural Rights (ICESCR), the Chinese government has an obligation to recognize:
Under the ICESCR, the government has an obligation to promote the economic rights of its citizens “to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures.”56
Article 42 of the Chinese constitution states, “All working people in state-owned enterprises and in urban and rural economic collectives should approach their work as the masters of the country that they are.”57 These “masters” still do not have the right to organize independent trade unions and negotiate the terms and conditions of their work.
Although poverty in China has been a persistent problem since the CCP came to power in 1949, urban industrial workers, particularly those employed in large SOEs, did enjoy significant improvements in their economic condition during the 1950s, 1960s, and early 1970s. The government introduced major reforms and legislation in the areas of healthcare, working conditions, housing, and retirement benefits. Movement to a “socialist market economy,” however, although contributing to overall economic growth in China, did bring with it a new set of problems including lack of job security and cutbacks in benefits, such as social welfare and housing allowances, that SOE workers had taken for granted.
The government’s refusal to countenance genuine citizen participation in policy formulation and its refusal to foster the development of a civil society with the capacity to contribute toward policy formulation has blocked effective responses to these problems. Independent representation of the interests of labor is essential to the development of economic rights and is expressly recognized as such in the Covenant's clause on the right to form and join trade unions of one’s choice. The government has not maintained that it is beyond its resources to permit it.
If workers enjoyed the right to freedom of association and expression, including the right to strike, they could contribute to the enactment of reforms that would allow China to meet its obligations under the ICESCR. In short, restrictions on workers’ rights not only severely limit the ability of workers to negotiate the terms and conditions of their employment with employers, but also limit the ability of workers to pressure the Chinese government to take the steps necessary to promote economic rights.
Finally, the pervasive problem of corruption in China has a profound effect on the economic well-being of workers. As this report shows, illegal profiteering in large enterprises has denied low-paid workers their wages, their benefits, and their pensions. Combating corruption that impacts on economic rights is an obligation of the government. The Chinese government has clearly not done enough in this regard.
For China’s leaders, worried about social stability as the restructuring of state-owned enterprises accelerated and unemployment rose, March 2002 marked a turning point. It was the first time so many well-organized, laid-off workers and their sympathizers—in the tens of thousands—took to the streets simultaneously and sustained their protests for weeks rather than days. Three cities in China’s northeast, all characterized by high unemployment, conspicuous wealth, hopeless poverty, and what was widely believed to be endemic corruption, witnessed the most prolonged demonstrations. There, workers protested non-payment of back wages and pensions, loss of benefits, inadequate severance pay, employers’ machinations to bypass worker congresses and to ignore prior agreements, unfilled government promises to help the unemployed find jobs, and later, the arrests of their leaders.
For several years before the eruption in the northeast, local authorities throughout urban China had quelled labor demonstrations by paying off protesters or employing limited amounts of force.58 However, in 2002, in Liaoyang, in central Liaoning province, Fushun in the east, and Daqing in western Heilongjiang province, officials were unprepared for the scale of the protests, the degree of organization, and the careful planning. In Liaoyang, workers from some twenty factories found common cause; in Daqing, an independent labor organization issued and took the lead in circulating handbills and posters; and in Fushun miners managed to secretly organize their demonstrations before taking to the streets.
Liaoyang, with its 1.8 million residents, is in many ways a typical northeastern Chinese industrial city. It flourished for some thirty years, as did the whole resource-rich region, after China’s leaders ordered heavy investment in the area to facilitate quick industrial growth. During the 1970s, the Liaoyang Spinning Factory employed up to 120,000 workers; by 2002, only 500 remained.59 The Liaoyang Ferroalloy Company, the enterprise whose bankruptcy led to the March 2002 protests, employed an estimated 12,000 men and women at its height in jobs ranging from iron casting to administration.60 When the company declared bankruptcy on November 5, 2001, about 6,000 remained on the payroll, including laid-off (xia gang), retired, and injured workers.61 Unemployment in the city stood at 25 percent at the end of 2001; workers as young as forty could not find jobs;62 and Liaoyang residents estimated that 80 percent of the city’s workforce struggled to get by on day jobs in the informal sector.63 According to official figures for 2001, 80,329 workers were “not at their post,” i.e. laid-off (xia gang); 216,892 were “at their post.”64 The numbers yield a laid-off (xia gang) rate of 27 percent.65 The official registered unemployment rate, however, was only 3.4 percent.66
A former furnace factory technician’s story is typical. He once made Rmb (renminbi) 1,200 a month (approximately U.S.$150; U.S.$1 = Rmb 8.3), but is now repairing shoes on the street. The best job offer he has had since he was laid-off (xia gang) came from a private employer, who offered Rmb 300 and no benefits.67
The demonstrations on March 11 and 12, 2002 exposed long-festering problems between the workers and management of Ferroalloy, once a medium- to large-scale SOE whose products sold well in both international and domestic markets. The plant’s former workers trace its terminal decline to alliances between Gong Shangwu, first Liaoyang Party Secretary and later mayor and Liaoyang People’s Congress chairperson, and corrupt managers at Ferroalloy who, they say, conspired to close the factory for their own personal gain.68 The accusations were supported by an official legal case against six senior figures connected with the plant, one of whom was convicted on corruption charges. As reported in the official Liaoyang Daily, over Rmb 5.3 million in embezzled funds, assets, and bribes has been recovered; and authorities have claimed they are chasing another Rmb 2.9 million.69
The plant started to lose money in 1995 but, according to an open letter from irate workers to the governor of the province, management continued to issue false reports indicating net profits to justify awarding themselves large bonuses.70 As of 1995, the company stopped paying employees’ pension and medical insurance premiums.71 From 1996 on, production was periodically suspended.72
Beginning in mid-1998, workers petitioned and wrote letters to the Communist Party Central Committee, the Party’s Central Disciplinary Committee, the State Council’s General Office and Complaints Office, the courts, the Liaoyang procuracy, and the Ministry of Labor and Social Security at the city, provincial, and national levels.73 Led by Yao Fuxin and Xiao Yunliang, a small group of workers sought to bring official attention to their allegations of corruption, as well as to non-payment of wages, forced early retirement––often dubbed “false retirement” by workers––cutbacks in severance payments and retirement benefits, and other downsizing measures.74
According to the open letter:
Older ‘falsely retired’ and laid-off (xia gang) workers (jia tui zhi he xia gang lao gongren) were supposed to have been paid a stipend of Rmb 182 per month but it was unclear how long this was to have been paid (point 12); workers unemployed due to the bankruptcy (yin pochan er shiye) were not receiving social insurance guarantees or the minimum livelihood allowance (zui di shenghuo fei) that the government is legally obliged to issue to urban residents whose incomes fall below a certain level (point 13); workers who had been promised compensation and relocation payments (yi ci xing buchang fei anzhi fei) still have not been paid in full (point 15); women workers of forty-five and over and male workers of fifty-five and over still have no formal copies of retirement arrangements offered by the company (point 16); housing subsidies have not been paid (point 17); medical reimbursements still have not been issued (point 18); workers laid off (xia gang) on a monthly stipend of Rmb 104 or put on long-term leave (fang changjia) on a monthly stipend of Rmb 140 prior to bankruptcy were still owed money.75
In addition, wages were not being paid. By March 2002, some former lower level managers and machine operators were owed two years’ wages, and former senior workers and technicians were owed seven months’ wages, despite a pledge from the city government to cover at least 50 percent of unpaid wages by the end of 2001.76
Although the CCP Disciplinary Committee, in response to the workers’ petitions, wrote to the Liaoyang government instructing it to investigate the workers’ allegations, the group of workers involved was disappointed with the CCP committee response, which they characterized as a brush-off.77
In May 2000, several incidents––including arrests of workers’ leaders––polarized the situation further. On May 15, in their first reported public protest against unpaid wages, approximately 600 Ferroalloy workers blocked Zhenxing Road, the main highway between Liaoyang and the provincial capital Shenyang.78 According to one report, some workers had not been paid for as long as two years, pensions had been stopped, and laid-off (xia gang) employees were not receiving statutory livelihood stipends.79
In the early morning hours of May 16, protesters moved back to the factory grounds. According to one report, by then their number had reached 5,000.80 Some 500 police and 200 members of the paramilitary People’s Armed Police (PAP) broke up the gathering, beating workers with truncheons and injuring as many as fifty.81 Three worker representatives were detained: Pan Qingxiang, Xiao Yunliang, and Li Run.82For Pang and Xiao it was to be the first in a series of detentions eventually culminating in their formal arrests on March 21, 2002.
By 8:00 a.m., up to 1,000 workers had regrouped and were attempting a march to government buildings, carrying banners saying, “Release the worker representatives” and “Being owed money is not a crime.” Police blocked their progress, but the demonstration convinced authorities to release two of the three detained representatives that same evening. Xiao told reporters that Li had suffered a heart attack and had been hospitalized. Xiao also indicated that some form of negotiation took place with the authorities, but he gave no details. “I will only say this, we must be paid our back pay, and we do not fear the government taking revenge against us after things are settled.”83
During the following twelve months, worker representatives and government officials met occasionally. Each time, government officials promised to address workers’ concerns.84
Then, on May 17, 2001, mirroring a scenario that occurred frequently at SOEs elsewhere in China, some fifty unidentified men in at least a dozen trucks arrived at the Ferroalloy factory in the middle of the night to remove equipment.85 Workers claimed the men were members of a local organized criminal gang (generically called heishehui or triads). Under the direction of officials from a Liaoyang court, the men transferred raw materials, including 6,000 tons of iron ore, from the factory into the trucks.86 In all probability, a legal court order permitting removal of the plant’s assets existed. However, the workers argued that the timing of the removal was in violation of the Bankruptcy Law which states that all financial matters must be cleared by the “liquidation committee” (pochan qingsuan xiaozu)before any assets may be removed.87
Security officials at the factory immediately telephoned Yao Fuxin, one of the main worker leaders, who rushed to the site with eight other workers. Outnumbered, they failed to stop the apparent theft. Five days after the incident, between 1,000 and 3,000 workers rallied to demand an explanation.88 Security personnel stood by but did not interfere with the demonstrators. The Liaoyang government promised worker representatives that they would investigate the incident and provide an explanation within seven days. According to the open letters issued by the workers in early March 2002, nothing came of the promise.89
On October 19, 2001, Ferroalloy’s management convened a meeting of Ferroalloy’s staff and workers congress to vote on the issue of planned bankruptcy. Although Chinese law prohibits independent trade unions, it does allow site-specific representatives congresses in SOEs. According to the 1992 Trade Union Law in effect at the time of the meeting, the workers congress “is the basic form of enterprise democratic management.”90 In theory, the congress, whose elected members represented the factory’s workers, had the right to monitor and discuss major management decisions.
The Liaoyang government and Ferroalloy management made it clear that no opposition to the bankruptcy would be permitted. On the day of the meeting, riot police in dozens of vans and cars were deployed near the factory gates; police cars and plainclothes officers on foot cruised local neighborhoods monitoring activists. In an apparent effort to prevent a majority vote against bankruptcy, management and trade union officials split the worker representatives at the meeting into thirteen groups.91 Two plainclothes police officers supervised each group, reportedly destroying any opposition votes. In the circumstances, many worker representatives walked out without voting.92 The bankruptcy decision “passed.”
On October 18, the day before the congress, 1,000 workers blocked the expressway between Liaoyang and Shenyang to protest the bankruptcy plan. According to one report, four organizers were detained.93 Although police and company officials declined to comment, a spokeswoman for the Baita district Public Security Bureau later said the arrests were part of police efforts to monitor a workers’ meeting at the factory, unwittingly lending support to reports of a heavy police presence there.94
Five days later, Yao Fuxin was detained for several hours.95
Less than three weeks later, on November 5, 2001, the Liaoyang Ferroalloy Factory was formally declared bankrupt. According to government officials and worker representatives, although negotiations over future arrangements for the plant’s workers did continue, by March 2002 it was clear they had stalled. The government claimed it had met with worker representatives five times;96 workers claimed the government had been negotiating in bad faith.97
On March 3, 2002, another meeting, one that Ferroalloy workers referred to as a “bankruptcy discussion and vote meeting” (pocha taolun toupiao hui) took place.98 Human Rights Watch was unable to determine whether it was another formal meeting of the staff and workers congress or a separate meeting called by company leaders or government officials. So as to minimize open opposition to a second vote on the bankruptcy, local authorities adopted the same intimidation tactics they had used in October 2001. Police detained three worker representatives and, according to an open letter from Ferroalloy workers, it was only “due to the masses and family members barring the way” that five more worker representatives escaped detention.99 An open letter to Governor Bo Xi from the “Unemployed Workers of the Bankrupt Liaoyang Ferroalloy Plant” stated that police were deployed at the factory gates and the atmosphere was so tense that anyone who planned to vote against the bankruptcy was “scared by the moan of the wind and the cry of the cranes, seeing the enemy in every bush.”100 In this way, stated the letter, the “life of a large-scale enterprise was forced to its conclusion.”101 It is unclear which representatives were held for how long or how they were treated.
During the first week of March 2002, Ferroalloy employees issued a total of four open letters, all in the name of the “Unemployed Workers of the Bankrupt Liaoyang Ferroalloy Plant.” These were posted on the factory’s gates and on the walls in the surrounding neighborhood. Three were issued on March 5: one, as mentioned, was addressed to the Liaoning governor, Bo Xi; another to President Jiang Zemin; and the third to all ex-employees at the plant. The fourth, issued on March 4, was addressed to the Liaoyang Party Committee and government leaders, the “liquidation team” (pochan qingsuan xiaozu), factory cadres, and workers and their families. That letter accused government officials and company management of colluding in corruption, questioned the need for closing the factory, and, quoting applicable laws and regulations, argued that the liquidation process had been illegal.
Both the ‘Enterprise Law’ and the ‘Bankruptcy Law’ clearly state that an enterprise shall clear its accounts prior to liquidation. Moreover, the Liaoyang Party Committee, the city government and other leaders…have ignored the ‘Constitution of the People's Republic of China’, the ‘Trade Union Law’ and other relevant laws by disregarding the fierce opposition of the factory's workers and also the vast majority of middle and basic level cadres…What are your aims? Explain them clearly to the mass of workers.102
The letter went on to accuse former Liaoning governor Zhang Guoguang (since transferred to the governorship of Hubei province) of manipulating the bankruptcy process. And it demanded information on when unpaid wages, pensions, and medical reimbursements would be paid.103
On March 11, Gong Shangwu, chair of the city’s People’s Congress and leader of Liaoyang’s delegation to the National People’s Congress––then in session in Beijing––told a local television reporter that “there were no unemployed in Liaoyang” and that the city’s economic transition had encountered no serious problems.104
In response, on March 11-12 some 17,000 mainly laid-off (xia gang) workers took to the streets of Liaoyang in protest. Some 15,000 workers from the piston, instruments, leather and precision tool factories joined 2,000 Ferroalloy workers in a show of strength and mutual support.105 As key worker representative Xiao Yunliang told Radio Free Asia, the demonstration marked a deliberate “change in tactics.”106Placards called for Gong’s resignation and the liberation of Liaoyang; speeches charged that the local government had stood by while industrial managers and corrupt officials had permitted embezzlement and consequent terrible hardships for workers at the former SOEs. Workers claimed that Ferroalloy general manager Fan Yicheng, with the approval of Gong and other government officials, used public funds to set up at least three independent companies.107
As protests continued on March 12, twelve local government leaders, including the deputy secretary of the Liaoyang Communist Party Committee, two deputy mayors, the secretary of the Liaoyang Political and Legal Committee, the city’s chief judge, chief prosecutor, and chief of public security, met with thirteen worker representatives to assure them of official concern and of the government’s intention to work toward solutions. One worker representative surnamed Pang told workers: “They said they are taking the problems the workers have put forward extremely seriously and solicitously. They are considering ways of solving [them] and working to calm [the situation].”108
Pang went on to say that the government was willing to consider the issues of corruption, bankruptcies, unemployment, and past arrests. Judging from the workers’ words, the issue of arrests was especially important. They were still angry about previous detentions and about the fact that not one factory manager had been detained on suspicion of corruption.
The officials bought time by arguing they had to wait for the secretary of the Communist Party Committee to return from a trip before resuming talks. But the Public Security Bureau chief did guarantee that workers could safely return to their homes; no one would be arrested. Taking officials at their word, workers called off the protests.
For four days all was quiet. Then, on March 17 around 8:00 a.m., Yao Fuxin left home alone to buy tobacco. He was still in view when his daughter saw two men in civilian clothes bundle him into a car. A policeman on duty at the station house, when asked about the incident, said he knew nothing about it.109 Questioned by the media as to whether those responsible were police officers, Yao’s daughter replied:
[I]f they were, they should have phoned to tell us they had detained him. That’s the correct procedure isn’t it? But we still haven't heard any news and this happened nearly two days ago. We don't know anything.110
On March 18 workers turned out in force to protest Yao’s apparent arrest. According to participants, some 4,000 former Ferroalloy workers were joined by as many as 30,000 supporters from some twenty other Liaoyang factories in a march down Democracy Road to local government headquarters to demand Yao’s release and to express outrage at the government’s broken promise.111
According to participants and local taxi drivers, some 10,000 took part in the following day’s demonstration. Pang, in speaking with reporters, claimed the turnout would have been much larger if the police had not set up roadblocks. He went on to say, “[We] also asked for talks with the Party and the mayor, but they refused to meet us.” By the afternoon, after most of the protesters had left, bystanders saw some 250 former Ferroalloy workers leaving the government compound carrying banners. At least one read, “we have a government of hooligans.”112
By March 20, police and paramilitary troops had sealed off streets leading to Democracy Road. The show of force, combined with bad weather, reduced the marchers to less than one-fifteenth their former number. Some 2,000––many of them elderly and retired, as organizers thought they were less likely to be arrested––did gather in front of government offices; worker representatives planned to go inside to try to negotiate Yao’s release. His daughter described the morning scene:
Today, they deployed the People's Armed Police (PAP) and senior Public Security Bureau police officers [ganjing, also known as “cadre police”]. They were all out there. There were three truckloads of PAP troops right outside the gates to the city government offices. They pushed us [out of the building’s courtyard] into the rain and we all were drenched. Seventy- and eighty-year-old women drenched in the rain! The guys wearing steel helmets were the anti-riot police.113
One worker representative, Gu Baoshu, was able to get past the paramilitary troops and into the government building, only to be detained by security forces. When a woman in the crowd realized what had happened and alerted others, some one hundred workers forced their way into the room where public security officials were holding Gu and secured his release. A month later police officers took their revenge. (See below.)
By midday on March 20, the workers had started home. About thirty older retired workers, under the impression that security forces would not attack them, agreed to protect worker representatives who were also returning home. Not far from the government offices,a combined group of police and PAP officers rushed the workersand seized three representatives, Pang Qingxiang and Xiao Yunliang, both in their fifties; and thirty-nine year-old Wang Zhaoming. The incident brought the number of detained worker representatives to four.
Workers now felt even more strongly that only older, retired workers would be safe in representing them; and some 1,000 appeared at government offices the next day, March 21, to demand the release of the four detainees. As Yao Fuxin’s daughter described the scene: “Today, there was an older Ferroalloy worker in a wheelchair who came out…Two older women pushed his wheelchair and he represented us.”114 Despite the precautions, two more workers were detained, including Pang Qingxiang’s wife Guo Suxiang and an unidentified worker who objected to Guo’s detention.115
Later on March 21, officers of the Baita district Public Security Bureau notified Yao’s family that he was, in fact, in their custody.116 That night, in what apparently was an attempt to persuade workers to call off the protests, Yao was permitted to telephone his wife from the Tieling city police lockup, some one hundred kilometers from Liaoyang. She in turn visited workers to urge restraint.
Yao was reticent to talk about his own condition despite inquiries from his wife. She later recalled the conversation:
When he rang, someone else came on the line first and said, “Are you a relative of Yao Fuxin?” I said “yes.” Then he said, “Well he would like to have a few words with you.” That was it. Then he let Yao Fuxin persuade me to talk to everyone and ask them to call off the demonstrations. After Yao finished I asked him, “Are you ok?” He said he was and that he had already talked to [the head of Liaoyang’s PSB]. I asked what he had said. Yao said, “Nothing much.” That’s what Yao said. He didn’t give any precise day when people would be released. The main thing he talked about was that people should stay off the streets and stop demanding that the government release people; people need to calm down as he has already talked with [Liaoyang’s PSB head]. I said, “So what did he say about you and the others [detainees]?” He said, “It’s nothing; nothing to worry about. That’s about it really.”117
Also on March 21, the four detained leaders––Yao, Pang, Wang, and Xiao––received formal notices of their arrests; the men were charged with “illegal demonstration,” that is, with responsibility for organizing the protests. The notice was based on allegations that the workers violated the “PRC Law on Assemblies, Parades and Demonstration” which requires advanced police permission for demonstrations.118
In the Ferroalloy case, the state-controlled Liaoyang Daily described “putting up posters in public places and making links [cooperation among workers from different factories]” to be evidence of criminal activity––a not-so-oblique justification for any arrests the police might make.119 The fact that workers from other plants had joined the Ferroalloy workers for some protests suggested a degree of planning. As one taxi driver said in commenting on the participation of textile, machinery, paper and other workers, “[T]hey had all linked up and organized.”120
By March 25, positions on both sides had hardened, with workers accusing the government of reneging on promises to help them find work, suggesting instead they leave the area;121 and city officials suggesting that outside agitators––hostile labor groups from Hong Kong and foreign “black hands,” including foreign media––were fanning the unrest.122 In a statement read on Liaoyang’s state-run television, the city government said the detained workers had broken the law and would be dealt with accordingly.123 On March 27, plainclothes police searched the homes of two workers representatives for “documents and contact books.”124 It was reported that public security officers had threatened that detained leaders would face stiffer charges, and that even more workers would be detained if the protests continued.125
Reports circulated, at the same time, that Ferroalloy workers had received half their back wages and part of their severance pay, and that the city government was contributing Rmb 2.6 million (U.S.$325,000) of the necessary funds.126 Within a week, it became clear that the city would not release the worker representatives as it had hinted; and on March 30, the Liaoyang procuracy handed down indictments against the four detained leaders on charges of “illegal assembly, marches and protests.” In short, a previously tested government strategy––limited cash payments in lieu of wages, payment of welfare arrears to rank and file protesters, and severe penalties for organizers––was put in effect in Liaoyang.
In late March, after rumors surfaced that Yao had suffered a heart attack, relatives of the detained men appealed to city officials to free the men. According to one relative:
I cried and I knelt down in front of the government, but nobody talked to us…I was also trying to explain that we wanted no trouble, just the release of our loved ones. I was halfway through when some officials tried to haul us away.127
Several elderly women present argued with the officials, giving the relatives a chance to leave safely.
Within the week, it became clear that central authorities, likely concerned over the endurance and solidarity displayed by the workers, had ordered a crackdown. They informed local officials that it was their responsibility to isolate workers from their counterparts in other provinces and industries and from foreign backers.128 To back up the directive, the Chinese press was prohibited from reporting the protest story.129
The government’s use of force and the charges against the protest leadership effectively stopped the demonstrations for a while, but the situation was far from calm. On April 11, Yao Fuxin’s wife was permitted to see him in detention and reported that, although her husband could speak clearly, the right side of his body was numb and he was suffering from migraines. She also reported that Yao told her he had been kept in leg irons for the first four days of his detention.130 With the exception of that visit, at this writing, there are no confirmed reports that detainees’ relatives have been able to visit them or verify their condition during the more than four months they have been held. (Typically, families do not have access to criminal detainees until both trial and appeal are over and the prisoner is transferred from detention to a prison or labor camp.)
On April 16, police officers entered Gu Baoshu’s home, ripped out the telephone line, bound, gagged, and beat him, then took him away. He was released, in a dazed condition, some eight hours later, but required hospitalization for chest pains and blood clots in his eyes.131
On April 22, Ferroalloy workers applied to hold a demonstration demanding the release of their jailed representatives but were denied permission. According to Guo Xiujing, Yao Fuxin’swife, “[The police] wanted to know the name of the organizer, but it goes without saying that anybody whose name appeared [on the permit application] would be arrested.”132 A second application on April 29 and a third on May 8 were also denied.133
A protest on May 1, the Labor Day holiday, ended without incident but with no concessions from local officials. On May 7, at the start of a three-day protest rally in front of government offices, the City Complaints Bureau told workers that officials were willing to meet with worker representatives. Fearful of detention, the workers refused but handed over a petition with five major demands. The petition urged officials to: 1) immediately and unconditionally release the four detainees or else try them quickly; 2) make arrangements for Ferroalloy workers to visit with their jailed representatives; 3) investigate and issue a public report on forced bankruptcies; 4) increase government efforts to clamp down on corrupt officials: and 5) punish officers responsible for beating Gu Baoshu.134 Violence erupted on May 15, when some dozen plainclothes police charged into a crowd of protesters, kicking and punching indiscriminately in an effort to seize the workers’ banners. After an elderly woman was beaten and her son remonstrated with the police, he, too, was beaten and dragged away. The Complaints Bureau arranged for his same-day release.135
Freedom to demonstrate is guaranteed in Article 35 of the Chinese constitution. However, the provisions of the PRC Law on Assemblies, Procession and Demonstration and the law’s implementing regulations make it almost impossible to hold protest demonstrations if the relevant authorities object.136
The assembly and procession law contravenes the International Covenant on Civil and Political Rights, which China signed in 1998. Article 21 of the ICCPR provides that no restrictions may be placed on the exercise of the right to peaceful assembly “other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedom of others.”137 Any restrictions on the right to assembly must be absolutely necessary to attain a valid state purpose and must correspond to a minimum democratic standard.138
Applications to demonstrate are decided on by the Public Security Bureau and can be denied if what is proposed is deemed to “infringe upon the interests of the state, society and collectives,” or would “endanger national unification, sovereignty or territorial integrity…or there is ample evidence to prove that the assembly, parade or demonstration will directly jeopardize public security or severely undermine public order.”139 Such a broad and loosely worded regulation gives local authorities extraordinary discretion and invites arbitrary and politically motivated denials. In addition, an application to demonstrate cannot be considered if “the placards and slogans to be used…and the names, occupations and addresses of the sponsors” are not included.140 Sponsors have three days within which to “request a re-examination” of a rejection; the authorities have three days to respond.141
Demonstrating after failing to obtain permission carries a possible prison term; thus, the four accused leaders of the Liaoyang protests face up to five years in prison under Article 296 of the Criminal Law on charges of responsibility for “illegal assembly, marches and protests.”142
Workers, with precedent to draw on, had no reason to believean application to demonstrate would be dealt with in good faith. During December 1997-January 1998, workers from Beijing's 3501 Factory embarked on a campaign against the introduction of limited one-year contracts subject to annual renewal. Management retaliated by dismissing those who refused to sign. After negotiations failed, workers applied to demonstrate. Two police districts denied the request, stating, “There are sufficient grounds to maintain that a parade or demonstration will endanger public security [sufficient] to seriously endanger social order.”143 As mentioned, in April and May 2002 police turned down three applications to demonstrate submitted by Liaoyang workers. The Liaoyang Public Security Bureau’s refusal to issue a permit did not meet the applicable conditions.
Human Rights Watch has serious concerns about the Liaoyang detainees’ access to due process, given the harshness of the law, the inadequacy of protections offered at trial, and the difficulties the defendants face in obtaining independent, qualified counsel. For example, the families of the four detainees, Yao Fuxin, Pang Qingxiang, Xiao Yunliang, and WangZhaoming, spent April and May trying to find lawyers willing to represent the men. Only Xiao Yunliang’s family had succeeded as of this writing, and, when Xiao’s lawyer tried to meet with him in early April, the Public Security Bureau refused him permission, claiming that Xiao had refused to hire him.144
During the 1960s and 1970s, Daqing became renowned throughout China as the model for rapid oil field development. Even now, thirty-two years after his death in 1970, it is difficult to find an urban resident in China who is not familiar with the personification of that model, Wang Jinxi, better known as Iron Man Wang. Wang’s reputed selflessness, his patriotism, and willingness to work long hours in terrible conditions to support the nation’s development were frequently lauded in nationwide “emulation” campaigns.145
Ironically, it is protesting workers in Daqing, most in their forties, fifties, and sixties, who invoke Wang’s spirit and determination. One flier handed out in the city’s Iron Man Square on March 25, 2002 called on protesters to “follow the Iron Man’s example. It’s better to die twenty years early and struggle with all one’s might to the end….”146
Oil was discovered in the Daqing area in 1958 at the beginning of the Great Leap Forward (GLF), an ultimately disastrous campaign aimed at forcing the pace of China's modernization so as to “catch up and surpass Britain in the output of major industrial goods” within three years.147 The result was a near collapse of industry, a dramatic decline in agricultural production, and at least thirty million people dead from starvation.148
The fledgling oil industry in Daqing was one bright spot in a nearly bankrupt economy, at the time 90 percent dependent on imported oil.149 In 1960, to speed Daqing’s development, Mao approved the transfer of 30,000 demobilized troops to join workers already there;150 by June 1, the first barrels of oil left Daqing; and by 1963 the regime declared dependence on foreign oil over.151 During the next four decades, Daqing, with over 26,000 wells, became one of the largest oil fields in the world.152 By 1976, oil production had reached fifty million metric tons, an annual output that was sustained until the late 1990s.153
According to the State Statistics Bureau, in 2000, urban residents’ per capita disposable income was almost twice the national average;154 average wages were in the top ten for cities nationwide.155 But restructuring, the drying up of some wells, and lower international oil prices slowed production and led to serious unemployment. Further cuts are planned, tens of thousands of workers in 2002 alone, to allow PetroChina, owner of most of Daqing's oil fields, to fulfill its obligations to shareholders in the face of increased competition and pressure to improve productivity following WTO entry.156
The wave of daily workers’ protest demonstrations that began on March 1, 2002, emerged from over five years of major restructuring in the oil industry and the gradual decline of Daqing as China’s most important oil center. Oil imports steadily increased through the 1990s; by 2001, 30 percent of China’s oil was imported.157 In 1998, to enhance China’s position in the international oil market, its oil fields were assigned to one of two vertically integrated state-owned corporations, the China National Petroleum Corporation (CNPC) and the China Petrochemical Corporation (Sinopec). CNPC absorbed the Daqing oil field. 158 In early 2000, CNPC went a step further. As part of plans to list on the Hong Kong and New York stock exchanges, CNPC transferred most of its high quality domestic assets into a subsidiary named PetroChina which became the parent company of the Daqing Oil Company Ltd (DOCL), the former Daqing Petroleum Administration Bureau (DPAB).159 The initial public offering (IPO) of PetroChina went ahead in April 2000.
Although the Daqing field still accounts for 30 percent of China’s crude oil production, output continues to be down and DOCL faces an uphill struggle to regain profitability.160 Senior figures in the DOCL management believe the effort is going forward on a less than level playing field. Referring to PetroChina separating out its most profitable assets for the IPO, Zeng Yukang, head of Daqing Oil and the target of oil workers' wrath, told the People's Daily just before protests started in March, “[A]nyone left in the remaining subsidiary companies would scream injustice.”161
Aging wells, high production costs, and a drop in the international price of crude oil were cited by Daqing Mayor Wang Zhibin as causes of the production cutback.162 During the protests, he went on to say that Daqing’s traditional economy was in trouble and making “all-out efforts to restructure is the only option we have.”163
Estimates for the number of Daqing workers laid off since Daqing Oil began restructuring vary considerably, from 38,000 by January 2001,164 to “86,000 of the company’s 260,000 employees [in] recent years.”165 A Daqing resident told a Human Rights Watch researcher that over 50,000 had signed severance contracts in “late 2000.”166 A PetroChina official put the figure at 58,000.167 A leaflet distributed among former oil workers on March 25, 2002, was addressed to “80,000 fellow retrenched workers.”168 One account put the total number of oil workers at 300,000 (plus nearly 800,000 dependents) out of a population of two million.169 The report went on to say that there were few jobs outside the oil industry.170
On November 7-8, 2000, Daqing Oil issued two documents that outlined the severance agreement the company was offering some 80,000 of its laid-off employees, more than one-quarter of the city’s oil workers.171 According to a workers’ handbill issued two years later and sent to the Heilongjiang provincial government, the agreement was forced on them.172 According to the Daqing government, Daqing Oil, and PetroChina, all the laid-off workers voluntarily signed the severance contracts; and all three insisted the process was entirely legal.
After a March 25, 2002, meeting with what authorities claimed were representatives of an organization called “workers compensated for contract termination,” the leader of a State Council Investigation Team that had been sent to Daqing to look into the dispute, made the same points in a speech broadcast over loudspeaker in Iron Man Square. He asked pointedly, “Why are people complaining now?”173
Laid-off workers told a different story. In a leaflet criticizing the process, they charged that there had been no consultation with the company’s workers’ congress:
Surely such decisions that are not discussed by the staff and workers’ congress, but simply announced and implemented, violate the Enterprise Law and the Trade Union Law. Why didn’t the Daqing Petroleum Administration Bureau trade union protect the rights of the workers? So much for the DPAB’s stressing of “legality.”174
Although Daqing Oil did not make full details of the severance payments public, it reportedly offered workers relatively large sums of money for years of accumulated service.175 Accounts vary, but the compensation ceiling was on the order of Rmb 100,000 (U.S.$12,500).176 But it was not the amount of money, per se, that angered workers. Rather, their grievances related to ongoing suspicions that management had not informed them of relevant information before the agreement wasfinalized, and resentment of the unilateral changes made to it since. The banners of protesting workers expressed their outrage: “We don’t want to be tricked again!” “Give me my job back!”177
Workers had been offered the severance package with no alternative, they say, and then the terms had been changed. As one laid-off employee, who had opened a shop with her severance money and did not plead poverty, r