Will the spectre of state-worker protests return?

A week-long strike at an ailing state-owned steel factory – formerly a Taiwanese-invested enterprise acquired by Ansteel in 2014 – in Guangzhou raised the spectre of state-sector protests. It has been more than a decade since the last major wave of state sector workers’ protests subsided. Right around the time when rural migrant workers in the export-sector grew restless in the early 2000s, state workers’ resistance to the state-sector marketisation was defeated by a combination of outright suppression, layoff payout and the winding down of the marketisation process itself that shut down and privatised a large number of state factories leaving 25-40 million workers unemployed. The same process also restructured labour relations and the production process and financially consolidated the rest of state sector, creating the conditions for a decade of rapid recovery and expansion – and a decade of relative industrial peace. Signs of stress appeared after Great Recession as growth of state-sector profit slowed; meanwhile, repeated calls were made to “reform” the state sector to make them more “efficient” and less intrusive of the private economy. But it is not until now that we are seeing the extent of the industrial overcapacity and declining profitability in the steel/coal sectors with expected massive layoffs estimated in the millions, again. Despite funds already earmarked to compensate laid-off workers, if the steel strike is any guide, managerial irresponsibility followed by workers’ protest and company and state intimidation are probably the more likely scenario.

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