Reforming State-
Owned Enterprises
For twenty years, the Chinese government has stressed the need for reform of state-owned enterprises. But most of its "solutions" have been quite ineffective. Zhang Kai This failure was a main theme at the September 1999 meeting of the CCP Central Committee, which approved a "Decision on several issues relating to reform of the state-owned enterprises".
According to this document, *a large proportion of state-owned enterprises cannot adapt to the demands of the market economy. Their operating mechanisms are inflexible, their inventiveness limited, their debts and social burdens are heavy, their staff is much larger than they need, their production operations are difficult, their economic efficiency is declining, and some of their workers live an arduous life." The Problem and the Reform
There is a problem of overcapacity in 83% of China's industrial sectors. Debt servicing (interest on loans) consumes almost 38% of profits. The deficit has almost doubled since 1990.
According to Zheng Xilin, Deputy Director of the State Ministry on Economy and Commerce, the production capacity use rate for over half the industrial goods is less than 60%; redundant staff around 10 million; and while the net assets of industrial 10 International Viewpoint #319 February 2000 state-owned enterprises was 6,000 billion yuan, the mobile capital was only 1,300 billion yuan. Most enterprises run a debt rate of over 75%.'
Xie Ping, Director of the Research Bureau of the People's Bank of China, has said that bad loans of state-owned enterprises at just four state banks exceeds 1,000 billion yuan, amounting to 25% of the banks' total loans. This constitutes a major obstacle for reform of state-owned commercial banks?
The CCP leadership wants to reduce the weight of state-owned enterprises in the national economy. Except for some "key" enterprises on state security, advanced technology or those that provide significant public goods (the September 1999 Decision did not specify which enterprises are "key"). The rest can undergo restructuring and invitation of investment by the private sector.
The Decision encouraged the introduction of foreign investments into enterprises with competitiveness, the merging of enterprises with potential markets but now suffering from difficulties, and the bankruptcy and closure of enterprises which have long been running on a deficit and which are wasteful of resources and highly polluting.
The Municipal government in Chongqing, the largest industrial base in western China, has announced plans to implement bankruptcy or forced merger of 77 enterprises in the coming two years. This would be more than the total number of enterprises merged or declared bankrupt in Chongqing since the establishment of a state sector after the Chinese revolution.
The Decision reiterated that all workers and staff should compete to excel in their jobs, labour discipline should be strict, and reward and chould he strict and reward and punishment should be clearly executed." Corporate reforms will be conducted, and more power will accumulate in the hands of directors and managers. The party secretary in each enterprise will now be allowed to hold the position of director-general. The directorate will decide on all key questions. The income differentiation within the enterprises will widen.
It is not clear how many Chinese workers have been made redundant in recent years. A source from the Social Security Bureau, estimating that in the first half of 1999, 7.42 million workers were made redundant. But according to surveys by the Labour Security Bureau, the actual figures were much higher than those reported to the central government.4
Enterprises under-report the numbers of workers made redundant in order to evade some of their responsibilities in arranging the reemployment of the workers. In the report to the Standing Committee of the National People's Congress, Zhang Zaiji, Director of the Social Security Bureau, admitted that of the 5.4 million workers from state-owned enterprises made redundant, 6% (that is, around 300,000), did not receive any basic living allowance. (The law says that redundant workers are eligible for a basic living allowance of 170 yuan a month from their former employer, and 83 yuan from the state-administered social insurance fund.)
In reality, the social security system is very incomplete. In central and
western China, only one-third of those entitled to these benefits actually receive them. estimated. Over 1.63 million households have a per capita income lower than the local minimum level of social security. Workers' resistance
It is thus no surprise that workers go on the resistance to fight for their rights and benefits. The following incidents were reported in the Hong Kong media.
On the eve of the October 1 National Day, 200 retired and redundant workers from the Changchun Machine Factory took to the street on protest. In the whole year, the 300 retired workers from that factory had received only 120 yuan, which is only sufficient for one month's living expenses. 200 retired workers from the Xincheng Motor Factory in Xian also took to the street for the fourth day, protesting that four months of living allowance had been overdue.
2000 workers from the Juchuan Industrial City in Pinghu Township, Shenzhen, went on strike on October 11 protesting that wages were overdue for four months. The management made promises but went back on them, so workers having resumed work went on strike again. After several times, workers paraded to the Township government. Management then paid workers half of June's wages. Ten days later, they paid two more months' wages. Workers then resumed work.®
A porcelain factory in Hechun Township, Lianjiang City, Guangdong, went for auction, and several hundred workers demanded a refund of the shares they invested in the factory promised to be returned to them in 1998
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COUNTRY • E-MAIL/O in addition to six months of overdue wages. They rallied in the factory, chanting slogans, and the police was called in to maintain order, officials were called in to mediate. The workers said that if the matter cannot be resolved, they may take more radical action. 200 workers from a light bulb factory in Nanhai City, Guangdong, went on a strike to protest that some workers were laid off and their wages not paid, and some workers were beaten up by the factory security guards.?
A state-owned textile factory in Weinan City, Shaanxi Province, went bankrupt in 1998, and was auctioned for 40 million yuan. However, no compensation was arranged for the workers,, In the first ten months, workers were paid only 100 yuan a month on which they could not survive. From November 2. , about 1,000 workers blocked three main roads in that city, and the police clashed with them, arresting about 10 workers and seriously wounding three women workers.$
200 workers from a rubber factory in Changsha, the provincial capital of Hunan Province, had not received any wages for three months. On November 26, they blocked a highway in Yaoling. Dispersed by the police, they gathered again in the afternoon and blocked major roads in Changsha, paralysing the traffic. Since many state-owned enterprises are in deficit, there are roadblock demonstrations every week in Changsha.?
The financial sector is rid with chaos and mismanagement, causing urban and rural residents to suffer huge losses from their savings. Many protests and demonstrations have been caused by
Denmark noble Germany Germany Greece Holland Sweden Australia/NZ this. For example, after the Beijing government ordered a rectification of the financial sector, in September alone, there were over 50 cases of attacks by the people on government offices. On October 20, 500 people blocked a railway."
In September, the Hunan Provincial government ordered the freezing of 40 billion yuan, the savings of two million peasants in rural cooperative funds. They announced that peasants could only withdraw 30% of their savings immediately, and the rest only after three years. The result has been at least 50 large-scale riots.
While income has decreased, everyday living costs continue to rise. On 1 January 2000, public housing rent in Beijing increased by 150-600%. One resident said, "We stride into the 21st century with a smaller stomach." 12
According to economist Hu Angang, 120 million rural people live below the internationally-defined (US$I/day) poverty line. This terrible statıstic Is increasing every day, as peasants working in the cities are being sent home due to the economic downturn. China's entry into the WTO will increase foreign competition for agricultural products, and push even more peasants down into the ranks of the poor and the very poor. * Notes 1 Wen Hui Bao, 5 November 1999. 2 Wen Hui Bao, 21 October 1999. 3 NCNA 25 November 1999, from Chongqing. 4 Lookout Weekly, 13 September 1999. 5 Apple Daily, 26 September 1999. 6 Oriental Daily, 13 October 1999. 7 Ibid. 8 Sing Tao Daily, 6 November 1999. 9 Sing Pao, 8 November 1999. 10 Sing Pao, 20 October 1999. 11 Apple Daily, 29 September 1999. 12 Apple Daily, 2 December 1999. renewal new subscribers
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WAR AND PEACE supported Vasudeva Nanayakkara, who split from the PA denouncing Chandrika's refusal to honour her 1994 promises for peace and social justice. He was supported by a range of small left parties, individuals and NGOs campaigning against the war. (In 1994 Nanayakkara left the NSSP, arguing that the revolutionary left should participate in the PA.)
Other left personalities like trade union leader Bala Tampoe called for a boycott. But political polarisation concentrated votes on the two main candidates, particularly as progressive voters realised the danger of a UNP victory. JD] * Source: Compiled from media reports and a NSSP press release dated 12 January 1999. For more information contact NSSP, 143 Kew Road, Colombo 02, Sri Lanka, Tel. +94 1 430621, Fax +94 1 334822 E-Mail <[email protected]> in Congress of the Four internadone
Transformation and!
regroupment
Regroupments of forces determined to learn the lessons of the historical abomination that was Stalinism and to continue, against the winds and the tides, to fight against capitalism are being realised in a number of countries.
In all the countries where such possibilities exist, the organisations of the Fourth
International are ready to be part of the re-groupment process. We consider this as an important step towards the recomposition of the anti-capitalist left on a world scale.
At the international level, the Fourth International is an active participant in regroupment, bringing with it the advantages of a long tradition of combat against capitalism and Stalinism. *
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