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China's Market Reforms Cause Frustration for Workers - 2001-11-23

Workers in China are growing increasingly frustrated as the country's market reforms widen the gap between the rich in poor. VOA correspondent Leta Hong Fincher recently visited China's Jilin province, and reports on the tensions rising there among workers laid off from foundering state-owned enterprises.

Plainclothes police try to disperse scores of elderly protesters outside the Jilin provincial headquarters in the capital Changchun. The retirees hold a banner that says, "The Jilin government must pay us back."

One elderly man explains the protestors bought bonds from a state owned enterprise. He says the Jilin government approved the bonds, but the company ran out of money, and announced a six month delay in repaying bondholders. The six months are up, but the retirees still have not gotten paid.

A taxi driver who requests anonymity for fear of persecution says protests like this occur almost every day in Changchun.

The driver says this demonstration is small, and that others draw hundreds of people. He says many enterprises are failing, and cannot pay workers. He argues that government reforms are not enough because they cannot guarantee food for people.

Even the mayor of Changchun, Li Shu, says the gap between rich and poor has reached a "danger level" in his city, and other parts of the country. But the mayor says there is little threat of widespread social unrest.

Mr. Li says that since China is transforming from a centrally planned economy to a market economy, there are bound to be problems. The market economy is just starting, so the legal system is imperfect. He also says there always will be some people who try to get rich at the expense of others.

The World Bank's chief economist in China, Deepak Bhattasali, says the main problem is the rapid pace of change.

"In China's case what has happened is, starting from a relatively egalitarian society, inequality has been rising and has been rising fairly substantially and that is a cause for concern," he exlains.

Mr. Bhattasali says the gap among regions is especially worrying. Coastal provinces benefit from rising trade and foreign investment, while poor provinces in the interior, such as Jilin and Liaoning in the northeast, are burdened by China's weakest industries.

"I think it needs to be watched carefully, especially the inter-provincial and urban-rural gap," Mr. Bhattasali says. "And this is something, which needs to be monitored continuously, using better tools, and intervention policies have to be designed."

Labor activist Han Dongfang in Hong Kong says China is ill-equipped to cope with the instability resulting from rising inequality and job losses. He says protests may become more common now that China has joined the World Trade Organization, especially if membership does not help create new jobs quickly.

Mr. Han says that as WTO related reforms force more state-owned enterprises out of business, huge numbers of workers and farmers will be left with no livelihood and no social safety net. He says that with nowhere to speak out about their problems, people think their only recourse is to take to the streets in protest.

Officially, China says it must find jobs for 40 million urban workers by the end of 2005. But Mr. Han says the real number of jobless over the next few years could swell to hundreds of millions.

Mr. Han says that with more than a hundred million people unemployed, China can little afford to have something go wrong with its reforms. In his words, "the result will be hard to imagine."