State-workers protests: a repeat of the late 1990s?

The upsurge in labour protest at China’s state-owned mines and steel plants reminds many of the tumultuous protest wave in the late 1990s/early 2000s during state-sector marketisation: in both cases, workers’ demands are centred on wages/severance/other forms of compensation related to layoff/unemployment/factory selloff or closure.

Is what we are seeing likely to be a repeat?

Here are a few things to consider.

In terms of the scale of the layoff, whereas in the late 1990s the Chinese state targeted SOEs across the board, the current layoff mostly affects two sectors: steel and coal mine. There is no evidence that the national government is interested in a radical overhaul of the state-sector like it did in the late 1990s under the then Premier Zhu Rongji.

The projected layoff ranges from 1.8 million (10% steel labour force and 20% of coal miners) to 5-6 million – a devastating figure – but pale in comparison to the 40-60 million last time; in fact, the entire state-sector (excluding public sector such as schools and hospitals) employs less than 40 million workers.

Will the layoff spread to other sectors? It is possible if China’s economy sharply deteriorates. But over the last decade and half, Chinese SOEs – thanks to state subsidies, access to state-bank credits, industrial protection and a considerable intensification of labour– are in a better position than two decades ago to absorb shocks and losses.

Moreover, the Party-state has learned its lessons: it has preemptively allocated $15 billion to resettle laid-off workers, although conflicts at the factory level are unavoidable.

The state-workers protests are happening at a particularly fraught time when tens of thousands of export-sector workers are also mobilising – a factor that was present in the late 1990s but on a much smaller scale than today.

But the geography of the state-sector protests may not overlap much with that of the export-sector, as coal mines and steel plants tend to be concentrated in inland and northern/northeastern China instead of the southern coast.

What about the state-workers? Who are they, and how do they differ from the Maoist state-workers? The generations who had any memory of Maoism and who witnessed the 1990s’ layoff have been largely replaced by a younger labour force who show more resemblance to their private-sector cousins than to their predecessors.

Is the eroding Maoist ideology/symbols/slogans over the last four decades – a pivotal part of protest repertoire for state-workers last time – a hindrance to their organising, or perhaps a liberation for state-workers to begin identifying with their counterparts in non-state sectors, thereby bridging the state-private sector labour divide?

Overcoming the division and moving toward a more unified movement are both difficult and highly risky – the Party-state has every reason to keep the labour movement fragmented.

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