Labor unrest is growing in China

By Allen T. Cheng Bloomberg News Wednesday, October 27, 2004

BEIJING China Resources Enterprise and other companies in China face growing labor unrest over jobs and the government’s failure to provide other support in the dismantling of its cradle-to-grave welfare system.

About 6,800 workers at China Resources, a Hong Kong-listed retailer, are on strike for a seventh week in northern China, alleging that the company is forcing them to sign "unfair" labor contracts, according to China Labour Bulletin, a research group in Hong Kong.

China Resources officials declined to answer questions about the strike.

The strike is one of several in China. In Anhui province, about 10,000 textile workers and retirees recently protested decreases in pension payments, the lack of medical insurance and compensation for injuries, according to China Labour Bulletin. In northern China, about 1,000 workers at Shaanxi Precision Alloy protested a takeover, a U.S. labor-rights group, China Labor Watch, said.

"Protests like these are happening all over," Robin Munro, research director of China Labour Bulletin, said by telephone from Hong Kong. "We expect many, many more as the wave of privatizations of state-owned companies takes off."

China is selling more than 190,000 state companies to private investors. The State-Owned Assets Supervision and Administration Commission announced last year that it was focusing on restructuring just 190 or so large state-owned companies and selling the rest.

Employees of the Shanghai-listed Shaanxi Precision protested because the alloy manufacturer is in financial trouble, and workers are unhappy with the offer from the new owner, a company in the southern city of Shenzhen, according to China Labor Watch’s chairman, Li Qiang. Officials at Shaanxi Precision were unavailable for comment.

In the same province of Shaanxi, 6,800 workers, the majority of them women, have been on strike at the Tianwang Textile Factory in the city of Xianyang after China Resources took over the factory.

The company wants workers at Tianwang Textile to accept severance pay equal to a month’s wage for each year of employment before signing a new contract that hires them back at lower wages, Munro said.

"The new contracts don’t respect seniority of workers," said Munro, who said he spent time with the workers in Shaanxi recently. "Many are angry."

Tianwang Textile was turned into an employee and management-owned shareholding company a few years ago, Munro said. Workers paid 4,000 yuan, or $483, and Communist Party officials paid 8,000 yuan and senior party officials paid 16,000 yuan for an unspecified stake in the company, he said. "Now they are forced to sell their shares back so China Resources can take over," Munro said.

About 1,000 police appeared at the factory gates with water cannons four days into the strike on Sept. 18. They were met by thousands of workers who surrounded them, forcing them to back down.

During the weekend, the workers tried to organize a sit-down demonstration at the city’s main railroad link and disbanded after a deputy provincial governor turned up to calm the situation, Munro said.

Officials are cracking down by arresting labor activists, according to China Labor Watch, which cites the arrests of Ding Xiulan and Liu Meifeng, leaders of a strike at the Zhongheng textile factory in the eastern province of Jiangsu.

China Labor Watch