- The Washington Times - Friday, November 15, 2002

SHANGHAI Quan Wen's first experience with capitalism came when the state-run dye factory where he worked was sold to a Taiwanese developer and converted into a shopping mall.
No warnings were given before the factory closed. Workers showed up one morning and found the gates locked with a brief message from the new owners explaining that the decision was one of economic priorities.
As Mr. Quan told it, the factory's Communist Party secretary took bribes from the "greedy developer," using his political leverage to secure the sale of the former state-owned enterprise to a foreign tycoon.
"When I first took that job 20 years ago, the government promised we would be taken care of for the rest of our days," said Mr. Quan, 47, who has been unable to find new employment. "They lied to us."
"The party has abandoned the workers for the wealthy," he said. "But this is the cost of China's progress."
China has tens of millions like him jobless, middle-aged men, made redundant as state-owned factories are parceled off to feed an ever-expanding private sector that is fueling rapid economic growth.
With China's top cadres huddling in Beijing this week at the 16th Communist Party Congress to anoint a new crop of leaders, the potentially explosive issue of rising unemployment has been glossed over with rosy economic predictions, talk of opening markets, foreign capital and courting private businessmen.
China's state-controlled media coverage of the party congress has waxed lyrical about strengthening the party's traditional allegiance and support of its core constituency of farmers, workers and intellectuals.
But for the ranks of unemployed workers in China, who have endured more than two decades of painful economic reforms, the message from officials in Beijing this week is clear: Get ready for tough times.
At a news conference Sunday in Beijing, senior economic officials said the government plans to move the economy in the direction of the private sector by closing or selling off more state-owned companies.
Zeng Peiyan, China's minister of the State Development and Planning Commission, said an estimated 10 million new workers enter the economy every year, complicating efforts to find jobs for the unemployed.
More than 50,000 state enterprises have been shut in recent years, with more than 25 million layoffs, the officials said. Between 1989 and 2001, the number of state firms dropped from 102,300 to 46,800.
The officials searched for a positive spin on China's growing urban unemployment rate, which was close to 7 percent nationwide, saying that millions of laid-off workers had found new jobs.
They said the government hopes that fostering the growth of the private sector will help absorb the massive surplus of labor as more defunct state-owned companies are shuttered in the coming years.
The role of private entrepreneurs has been a major theme of the party congress, with top officials openly calling on the nation's successful businessmen to help build China into a modern, developed country.
In previous meetings of China's secretive Communist Party, such talk would have been heresy. After the party took power in 1949, private businessmen were executed, imprisoned or forced to flee the country.
But economic reforms begun during the late 1970s under Deng Xiaoping gave rise to a new spirit of private entrepreneurship, a sector that now accounts for a major portion of the economy.
The party congress also is expected to endorse President Jiang Zemin's proposal to allow capitalists to become members of the Communist Party, a move that has angered leftist party conservatives.
With China moving away from state-owned enterprise and toward modernization and foreign investment, analysts say, the ranks of unskilled and unemployed workers are growing into a dispossessed subculture.
"We are talking about a huge segment of the population existing outside the realm of society," Meng Liu, a senior researcher at Beijing's prestigious Tongji University, told UPI. "We need to work on finding immediate solutions to the labor surplus or face widespread social unrest and instability."
Many workers say they feel betrayed by the 81-year-old Communist Party's embrace of private enterprise and worry that China's rush to enter the global economy will mean an end to their livelihoods.
"Chinese workers are struggling for money to feed their families while these leaders talk about welcoming capitalists into the Communist Party," said Zhang Ke, 40, an unemployed construction worker.
"What kind of nonsense is that?" he barked. "They might as well call it the Chinese Capitalist Party."
For workers such as Mr. Quan and Mr. Zhang, the increasing number of permanent layoffs at state-owned factories strikes a deep chord. Since the late 1950s the heyday of central planning in China workers' welfare was tied to their factories, which provided housing, health care benefits, cheap food and clothing as well as modest retirement plans.
"Workers used to have a secure job, we used to have a steady income. Now that is all gone," Mr. Quan said.
The theme has found voice not just among the disaffected. A report by the Chinese Academy of Social Sciences found that workers and peasants over the past two decades had lost their proud social status amid the changing composition of Chinese society.
Indeed, mass protests over factory closings and low wages have become increasingly common in China. In the past year, workers have taken to the streets in some of the most profound labor unrest in recent decades, and authorities have responded by rounding up and imprisoning independent labor leaders.
China has outlawed the formation of independent labor organizations and routinely arrests workers who attempt to organize trade guilds other than the state-controlled All China-Federation of Trade Unions.
Labor-rights groups warn that protests will increase in size and frequency unless the government takes immediate steps to address the grievances of tens of millions of unemployed workers.
"They are worked like dogs and then discarded when the factories are closed," said Huang Weibao, a former tile-factory worker who serves as a legal adviser in unemployment lawsuits. "Tensions are rising among China's unemployed workers, and some say it's only a matter of time before it explodes."

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