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China's State-Run Sector Reforms Leave Many Unemployed - 2002-03-20

Police in China have dispersed thousands of angry laid off workers in one of many industrial cities feeling the pain of the country's massive economic reforms.

Chinese authorities moved in Wednesday to break-up a labor protest by 10,000 laid-off workers in Liaoyang.

Several labor leaders were detained at the City Hall demonstration site. The workers have been demanding back pay and welfare benefits.

Similar protests have been staged in the so-called "Rust Belt" - an industrial region in northeast China.

Thousands of angry workers continued their three-week long vigil in Daqing, home to China's largest oil field. They are demanding the company pay promised severance benefits.

The director of an organization called "China Labor Watch," Han Dong Fang, has said the problem is only likely to get worse.

"You have more and more state enterprises going down and more workers are laid off, that is why you get more angry workers than ever," Mr. Han says.

Mr. Han spoke from his Hong Kong office, where he monitors reports of labor disputes across China. Some reporters have been kept away from recent demonstrations by large numbers of plain clothes and uniformed Chinese police.

The Communist Party has been moving to streamline unprofitable and cumbersome state-sector companies as part of market-oriented reforms. As a result, millions of workers have been laid off and deprived of compensation causing growing unrest in a society used to life-long employment and welfare benefits.

China's industrial sector is only part of the problem. Last week Prime Minister Zhu Rongji told the annual meeting of legislators that his biggest challenge is cushioning the blow to agricultural workers who will be displaced under reforms. There are some 900 million farmers who face stiff international competition now that China must liberalize trade as a member of the World Trade Organization.