China Worker Protest Raises Alarm On Bankruptcies

Chinas Mianyang Silk Printing Factory stands closed, locked and empty, but a rowdy protest by its workers last month after the textile plant declared bankruptcy has rung alarm bells in the region.

Local officials said such incidents had to be expected, offering an unusually candid recognition of the problems thrown up by Chinas sweeping capitalist-style economic reforms. At least 600 to 700 workers took to the streets on July 7 and 8, blocking traffic with dustbins, desks and chairs, officials in Mianyang in southwestern Sichuan province said at the weekend.

One city resident said about 1,000 workers from three bankrupt factories took part in the two-day protest and as many as 50 people were detained. Officials blamed the protest on misunderstanding after workers posted a notice saying government representatives would visit the factory on July 7 to discuss benefits after the bankruptcy. When Mianyang officials failed to arrive that Monday morning, workers poured out on to a major intersection outside the factory in the western part of the city, they said. The protesters dispersed after police seized those people who were blocking traffic and began talks to reassure workers, officials said.No one was injured and nine people detained for disrupting public order were freed after six to 15 days in custody.

 

The incident has highlighted the delicacy of Chinas use of bankruptcy to push economic reform.

We want to prevent this kind of incident because it is bad, said Wang Jianjun, deputy director of the Sichuan Province Labour Department. But if it happens we believe it is normal.

The best way (to prevent protests) is to state clearly the reason for bankruptcies and make the workers understand, he told reporters.

The Mianyang protest was not the first in Sichuan many have already erupted and it was not likely to be the last as China lurches from Stalinist central planning to a more market-oriented economy, officials said.

Sichuan has more than 400,000 surplus workers and of those more than 300,000 had been laid off by the end of 1996, Wang said, adding that the government was able to re-employ only about 50 percent of redundant workers annually.

Mianyang, with a population of five million and some 117 km (73 miles) north of the provincial capital of Chengdu, is a typical example of Chinas drive to use bankruptcies and mergers to reform state enterprises, thus laying off excess workers.

The city bills itself as a base for the electronics industry, and local officials view bankruptcies as the natural price to pay for progress.

We want a reformed city, said vice mayor Wang Xingzhong. There must be difficulties along the way.

Mianyang estimates 60 bankruptcies among all types of firms, both state and private, in 1996 and 1997, thus throwing 27,000 to 28,000 employees out of work, vice mayor Wang said.

The city grants a monthly basic living allowance of 136 yuan ($16) to laid off workers but provides other subsidies and insurance to push total benefits higher, he said.