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China Celebrates Labor Holiday Amid Worker Unrest - 2002-05-03

Labor protests are growing in China as the country tries to cope with wrenching economic changes that have cost millions of people their jobs. This week, as China celebrates a holiday honoring labor, the outlook is for more layoffs and the worst unemployment pressure the country has ever faced.

Tens of thousands of angry workers recently staged the biggest demonstrations in years in China's heavily industrialized and economically troubled northeast. Oil workers and others gathered in illegal rallies to complain about layoffs and meager severance payments.

The government says 25 million people have been laid off during the past few years, and about 150 million farmworkers have been forced to leave the land. China's transition from communism to a market-oriented economy means that many inefficient, state-owned companies must cut unneeded staff or go out of business.

Millions more layoffs are expected as China's new membership in the World Trade Organization opens the country's heavily protected markets to foreign competition.

Labor activist Li Qian says labor protests have spread across China. Mr. Li says protests have hit the construction and service trades, as well as state-owned heavy industries. He says workers demand unpaid wages, welfare benefits, or missing pensions.

China's government tries to hide the situation by banning stories about labor protests in the state-controlled media. Foreign journalists trying to cover the story have been detained.

Amnesty International says China also has detained hundreds of labor activists, and sentenced some to long prison terms under sometimes brutal conditions.

Harvard University China scholar Bill Overholt says the protests are focused on local grievances: illegal working conditions, unpaid wages, or the theft of pension funds by corrupt officials. He says Beijing is working to keep these scattered protests from growing into an anti-government political movement. "Most of the population understands that change is necessary and the consequences will be worse if they do not reform the state enterprises. … They (the officials) are walking a very fine line, thus far it has been successful, but the reforms have a long way to go, they need to be done very quickly by historical standards, and the balance is going to be hard to keep," he says.

Mr. Overholt says if authorities use too much force to control protests, they will enrage more workers, sparking more unrest. But if officials give in to demands for back wages, they may encourage other groups to take to the streets.

Chinese labor experts such as Xin Changxing say China needs to maintain high economic growth to create jobs for some of the displaced workers. The government also must offer retraining to help the rest. In a recent magazine article, he writes that China must help smaller businesses grow, because they are most likely to create needed jobs.

China's Finance Minister Xiang Huaicheng says Beijing is well aware of the workers' plight. He says the government has a responsibility to offer more help for low-income families, and has boosted spending to help displaced workers in the past few years. But experts say even this increase falls short of the need, as the number of jobs lost far outstrips the number of new jobs.