Economic reform against the workers THE OCTOBER 1984 Central Committee plenum decided to introduce in a bolder way the process of economic reform started up at the end of 1978 (1) in urban and industrial life. Having first been applied to the peasant world and having profoundly transformed the life of the villages through decollectivization, the reform was now to be applied to the social groups in the cities.
The aim first of all of the economic reform was to change the modes of economic life and therefore of social life. But the tempo, detours, and re-routings owe a lot to the mute or more open pressures of the various social groups concerned.
What explains the desynchronization in the application of the reform in the countryside and in the cities is the difference in attitude, expectations, fears, and resistance in these two worlds, the urban and the rural. (2)
In this article I will present first the major features and stages of the economic reform, and then show what is at stake in this for the working class. ROLAND LEW
CHINA has been divided into such watertight compartments that relations between the various industries have been possible only through the top. So, the center has presided over the most minute aspects of economic life. All these problems and a good many others flowing from them call for deepgoing reforms.
I do not propose to deny the weight of Maoism or its specificity. But while Maoism had different effects, often disruptive ones for economic life, it did not put an original stamp on the system's modes of functioning. For example, although Maoism came out of a revolution conducted by the peasants in the countryside, it did not accord the peasants and agriculture a favored place in economic development. To the contrary, the countryside (80% of the population) was the ugly duckling of economic development during the Maoist period. The rapid collectivization carried out in 19551956 put the peasant world in a vise to force it to make a big contribution to rapid industrial accumulation. With little motivation, the countryside in fact stagnated.
The urban scene was much more active. It was in the cities in fact that the regime sought its new allies. The working class, which was numerically small at the outset but expanding rapidly with industrializaiton, became the regime's special ally. This working class responded positively to the regime's solicitations inasmuch as it gained unquestionable advantages in return - an improvement in its living standards; job security; and even, in the initial period of the regime, a genuine social advancement. (3)
When Mao died in September 1976, the balance sheet of Maoism seemed to the population to be negative overall. The Great Helmsman's successors have faced a society fraught with tensions, in which the usual ills of rigid social and economic regimentation were compounded by the effects of reckless attempts to alleviate these problems. An economic units, the 'shops, will sign production contracts with the management and get more money if they exceed their quotas." (f) A modification of wages and prices in the direction of adapting them to the criteria of the market, productivity, and profitability. (g) A reform of the trading system.
2. For a more detailed analysis of the evolution of the economic situation, see Pierre Gousset's article "Developpement et avatars de la nouvelle politique economique en Chine," which appeared in 'Inprecor' ('IV's French-language sister publication), No. 69, February La crise 7, 1980; and Ernest Mandel's article economique en Chine", , which appeared
'Inprecor', No. 94-95, February 16, 1981.
3 On the situation of the workers see The current state of the Working Class' by Zhang Kai in 'International Viewpoint' No 35, August 1, 1983.
15
ROLAND LEW
The need for reforming the economies of "actually existing socialism" is making itself felt everywhere. But the Chinese reform would not be what it is - with the radical transformations in the countryside and the hesitations and delays in making changes in the industrial sector - if it were not for the influence of the Maoist legacy.
The least that can be said is that this heritage presents a great liability. These negative features are, first of all, intrinsic to the economy of "actually existing socialism." It is a commonplace to say today that Maoist China was - and China still is today - a very typical economy of the Soviet type. But not so long ago, the recognition of this fact was a great surprise for Western observers, so great had been the insistence on the originality of Maoism.
The balance sheet of post-Maoism puts China in the same boat with the other "socialist" economies, with their advantages and problems. While the advantages are striking at the outset, bringing rapid growth, the difficulties come progressively to overshadow the economic horizon, a commandist economy, rigid, top-heavy planning,
International Viewpoint 11 November 1985 and so forth. In the Chinese case, the economy has been threatened with asphyxiation. Simply to give an indication, without going into detail, while in the first five-year plan 1.68 yuan were needed to increase the national economy by one yuan, in the current five-year plan (1982-1986), 2.74 yuan are required.
There is a hypertrophy of heavy industry, which in 1978 accounted for 41% of the GNP, as opposed to 27.8% in 1952. The economic system
1. The various measures projected by the new Chinese economic reform were presented in the following way in 'Le Monde' of October 13, 1984: (a) A change in the relations between the enterprises and the state, with the latter no longer having to turn over their profits to the state in return for an annual financial appropriation; henceforth they are to pay a tax, and will be able to do as they please with what is left over. (b) A reform in the plan reducing the number of sectors subject to direct planning. (c) Reform of the system of employment creating looser conditions for the recruitment of personnel and a differentiation in the status of workers. (d) reform in the status of intellectuals and specialists giving greater responsibilities to factory managers and tending to give rise to an increase in the wage spread. (e) The establishment of a responsibility system in the plants similar to the contracts that exist in agriculture. That is, "the base
Street vendors in Peking (DR)
reform was necessary, but what sort of reform and in what stages?
While transformations were necessary, the new leaders were uncertain about what means should be used to accomplish them. Immediately after
Mao's death, the press was full of articles about the changes. that had to be made in economic life. But it took two years for solutions to begin to be applied.
These two years were needed to get a certain consensus in the leading team and for Deng Xiaoping to get out ahead of the pack and start to push aside Hua Kuofeng, Mao's anointed crown prince.
Then the reform started off on its sinuous course, in which markers were laid down by two important plenums - the Third Plenum of the Eleventh Congress in December 1978, which launched the process; and the Third Plenum of the Twelfth Congress in October 1984, which relaunched the reform, extending it systematically to the cities and the industrial system. The Zig zags of the reform
In order to follow the zigzag movement of the reform, produced by advances and retreats, by abrupt lurches forward in the countryside and the putting on of the brakes in the cities first, followed by acceleration in the urban areas, I will utilize essentially the typology proposed by W. Zafanolli, a researcher at the CNRS [the French National Centre for Scientific Research]. In his view, the six years of reforms can be broken down into three phases. (4)
In the initial phase of readjustment in 1979 (opened by the December 1978 plenum), there was a return, under the aegis of the veteran leader Chen Yun, to the methods that he himself had advocated in the 1950s. 16
What this meant was improving the classical system of centralized planning without really changing it, adding an element of market relations that was to play a marginal balancing role. The market was only there to respond to demands not satisfied by the plan, it being understood that the plan should be directed toward meeting all demands.
So the stress was placed on a better realization of the plan. But the operation was conducted on the microeconomic level, that is, on the plant level, and in an experimental way. The province of Sichuan was the testing ground. In 1980, the experience was extended on the national level to 6,600 enterprises, representing 16% of all enterprises but 45% of production and 60% to 70% of profits.
The enterprises were pressed to achieve the targets of the plan. They could keep a part of their profits (from 10% to 20%, varying according to the location). They were, moreover, encouraged to produce a surplus over the plan to meet demand not covered by the plan. The logic of the planning remained unchanged, but it was hoped to remedy the inadequacies of the plan. It was a small reform, which was not extended immediately to all the enterprises.
Limited to the most profitable sectors in 1979-1980, the reform enabled the industries concerned to increase their profitability. In reality, the dynamic set in motion made its impact elsewhere. It was not the timid industrial policy but a considerable upset, a veritable "silent revolution" (5) that radically transformed the countryside in a short period of time. It was here that the market logic that was introduced as a supplementary element in the economy took off.
What at the outset was a "responsibility system" designed to displace a form of payment, calculated in labor points, equal for all and bearing no relation to the work actually done (the "one big pot"), (6) led rapidly to complete decollectivization of the countryside, a de facto distribution of the land, and a return to the family farm.
By 1981, the rural economy consisted of 180 million small family holdings. And this was only the beginning. Among the various types of contracts between the peasants and the state, the most popular is the one that goes furthest in privatization. It is the system of "the lump," which requires of the family unit only that it make the compulsory deliveries and pay the agricultural tax. In everything else, the peasants are free to manage their business as they please.
We are, therefore, seeing a rapid and far-reaching social differentiation in the peasantry, and the emergence - accepted if not actually desired - - accepted if not actuall desired -of a rich stratum that is concentrating land ownership in its hands and accumulating capital through the sale of its products to the cities (that is, the part that is not requisitioned or consumed at home. This capital, moreover, can be legally invested in specialized activities not directly concerned with tillage and husbandry.
Quite recently, the government has even eliminated compulsory deliveries of produce to the state, making possible greater private sale of the products of the land. This revolution in reverse has been fueled by the success of these measures. They have been successful with the peasantry, who remain attached to the family unit. They have been successful also in terms of agricultural policy, bringing with them a growth rate of 7.5% a year in farm production after 1978. Above all, they have been successful from the standpoint of peasant incomes, which have doubled since 1978 (in current prices), while in 1977 the standard of living had not yet risen above the 1955 level. Such great success, with so few apparent disruptive effects gained a consensus of support among the leaders. The reform was sort of carried forward by its own momentum.
A second phase of the reform then came into play. In industry and in the cities, however, the logic of the market and of profitability came into conflict with a system that is alien to them. While we are seeing in fact a shifting of the balance away from heavy industry toward light industry,
See W. Zafanolli, "La reforme economique en Chine, to be published in the magazine 'Est-Ouest', Paris. 5. Claude Aubert, Projet, Septem-
"Chine rurale, revolution silencieuse, ber-October 1982.
6. By the expression "eat out of one big pot, " the Chinese describe the egalitarianism that resulted in unproductive workers getting as much as those who really worked. International Viewpoint 11 November 1985
with the percentage of the former in GNP falling from 41% in 1978 to about a third in 1982 and a fall in the rate of accumulation from 36.5% in 1978 to 29% in 1982, in other respects the industrial system continues to show the same deficiencies.
The marginal effectiveness of enterprises remain sharply diminishing. The quality of products remains poor. The rate of utilization of equipment does not exceed 50% to 60%. Prices remain arbitrary, if not outright irrational. At bottom, the little reform of 1979-80 only provided for a certain relaxation of the rules. It simply legalized what the old black market was already doing without any concern for the rules. And what remained illegal continued to be done surreptitiously. Resistance
What is more, the threatened sections of the apparatus (for example the central trading agencies endangered by the reform) have often successfully laid down an obstacle course to the application of the new measures. And when poorly controlled reform has led to inflation (around 10% to 20% for the period 1979-1981 for consumer goods) and to a grave budget crisis (owing to investments getting out of hand and the growing weight of subsidies on food products for the cities), a sharp brake has been put on the process in the industrial sector. Heavy industry, the big provider for the state budget, has
Nonetheless, the reform is continuing to advance in a modest way. For example, in order to deal with the extent of urban unemployment, a private economy in the cities has been authorized (although with a number of legal and other restrictions). By 1983, there were 2.3 million
Even in the industrial system, elements of reform have been introduced. For example, the share of the profits that was turned over to the state has been replaced by a single tax (in principle this is 55% of gross profits, plus possibly a tax adjustment to compensate for windfalls created by the pricing system).
Moreover, enterprises have been authorized to engage in subcontracting, which offers flexibility in the management of the wage fund and helps to break the "iron rice bowls," a problem to which I will return later.
Nonetheless, it was possible to make the observation in 1983 that
"two years of reforms followed by two years of consolidation do not seem to have changed the functioning of the system profoundly." (7)
In the very recent period, 19831985 (especially 1984), we come to the third phase of reform. This is the time when a certain agreement emerged in the leadership for going further in the logic of the market, profitability, and privatization. But this did not come off without difficulties. At the end of 1983, in fact, we saw an attempt to limit the process. It was "the campaign against spiritual pollution," that is, pollution coming from the capitalist West.
The reformist constellation reacted by pushing the reform further, in the hope that while Deng Xiaoping was still alive, it could create irreversible facts, reach a point of no return. Over the year 1984, up to the culminating point at the CC plenum in October of that year, the reform was launched in the industrial sector in successive waves.
In May 1984, administrative tutelage over the loosened. Their autonomy was incre ased. What is more, the enterprises now got the right to decide on their sources of supply and outlets for distribution. They also got the right to hold on to 70% of their amortization funds. Plant managers gained the sole right to run their enterprises (they are no longer, at least in theory, under the local party secretaries). This represents a return to the system established in 1951 and abolished in 1956 in favor of direct control by the party committee.
The managers have the right to hire and fire and to inflict penalties. Their new powers are considerable. It remains to be seen how they will be used. It may be doubted that the party secretaries will easily relinquish their authority. In any case, at the end of 1984, only 2,900 enterprises were applying these new principles.
The October 1984 plenum, with its resolution on "the reform of the economic structure," codified the changes. The watchword was increasing productivity. There was talk about introducing truth in prices, prices that should come into line progressively with demand and production costs. Changing the pricing system, however, is a vast program. It does not seem that they have gotten very far today in this regard. It has to be said that they had a long way to go. To give two examples that indicate the two extremes, the petroleum sector has a pricing system that makes possible a 70% profit, the coal industry had one that involved 0.7% profit. So, there is a range of one to one hundred in prices set by the government.
The October plenum also decided that the enterprises were to be separated from the overall administration of the economy. Small unprofitable enterprises are contracted out to collectives of workers, or even to private persons. The volume of wages is to be tied to the results of the enterprises and the wage scale open ended. So, the elevation of equality over criteria of productivity was out.
The reform was taken onto the macroeconomic level with the reorganization of planning. The economy is to be divided into three sectors. In one sector, embracing the major industries (in particular heavy industries), the targets of the plan will remain binding. This system will extend to 1,020 big enterprises, accounting for 52% of profits and of taxes.
In another sector, which has still not been very clearly defined, the plan will operate only indirectly (through credits and budgetary appropriations). They are talking in terms of a sector that would include 48.6% of light industry and 72% of its production.
The third is to be a privatized sector, which is still largely embryonic. This privatization applies to 4.2 million enterprises in the cities employing 54 million persons. But this sector could extend to a part of collective enterprises that presently employ 27 million persons, which, because they often run in the red, are subject to privatization.
However, we should not extrapolate. It should be noted that the state retains "control of the main sources feeding the economic circuits." (8) In the words of a Chinese author, the "visible hand" of the plan will not substitute for the "invisible one" (the market), but will operate at the source by regulating economic flows. It is still too early to make a practical balance sheet of the reform project. Let us try rather to assess its consequences for the workers.
The Chinese "Communist" regime came out of the military conquest of the largely passive cities (and thereby of the urban proletariat).
it immediately accorded a relatively privileged place to the working class.
It can even be said that the working class occupied a privileged place in the system of alliances set up by the new regime to consolidate its power.
First we should ask what this working class represented numerically then and what it represented now. The
7. Yues Cheurier, "Les politiques de la demaoisation (1977-1982), 'Revue d' etudes comparatives Est-Ouest, Vol. 4,
No. 3, September 1983.
W. Zafanolli, op. cit. 17
International Viewpoint 11 November 1985
statistics do not distinguish between blue and white-collar workers. What they give is the number of urban wage earners, that is practically the entire economically active population of the cities, from ministers to postal workers, to clerks in state stores. We know that there were 100 million blue and white-collar workers in 1978, of whom 67.1% were men. In 1982, the number was 112.8 million of which 63.7% were men (17% were women in 1957).
In the industrial sector properly speaking, the number of blue and white-collar workers rose from 2.446 millions in 1952 to 13.480 millions in 1957 and 44.367 millions in 1979.
In order to get a clearer idea of the size of the proletariat, for the cities you have to add transport, telecommunications and the building industry. In the first two sectors, the number employed in 1952 was 1.129 million; in 1957 it was 1.669 million; and in 1979, it was 6.725 million. In construction, the number was 1.048 million in 1952; 2.714 million in 1957; and 8.093 million in 1979.
In a nutshell about 60% of the 100 million urban wage earners in 1979 belonged to the productive apparatus blue and white-collar workers). They represented about 15% of the total workforce. It should be added that about three quarters of this workforce are agricultural producers. It should be specified, moreover, that in 1979, the metal industry accounted for three million workers blue and white-collar), mining for 3.8 million, the mechanical industry for 9.175 million, and the textile industry for 2.740 million.
Also to be taken into account is the presence of a proletariat in the countryside. Half peasants, half workers, they amount to around twenty million wage workers (and perhaps more). In total, therefore, it seems that 30% to 35% of the economically active population in China are wage workers.
These figures show a considerable growth in the numbers of the working class and its central place in the cities. An indisputable social mobility for the working class has made it possible for a not insignificant number Possible for a not insigniticant number of workers to start to go up in social scale (becoming plant managers and trade-union cadres). This could be seen in particular in the early years of the regime. But it is less important than the more durable advantages acquired by the working class.
In exchange for its support for the regime and its participation in the industrial process, the working class has gained various benefits. First of all, they got iron-clad job 18 security, the certainty of never being fired (the famous 'iron rice bowl'). An eight-level wage scale was established, assuring regular raises for seniority, as well as for calendar age.
The educational level was sharply increased. In 1957, 20% of urban workers (blue and white-collar) were illiterate. This figure fell to 1.6% in 1982. In 1957, 19.1% only had a high-school diploma. In 1982, this figure had risen to 72%. These figures are much more favorable than the corresponding ones in the rural areas.
The most privileged blue and whitecollar workers are in the state sector, which accounted for three quarters of urban wage earners in 1978 and almost three quarters of industrial wage earners (thirty million as against 12 million in the collective sector). Workers' advantages
Moreover, especially in the state enterprises, the workers have enjoyed numerous indirect benefits, to the extent that the state sector, accoun ting overall for less than 20% of the total economically active population received almost all the social subsidies and benefits. In 1978, it could be calculated that the subsidies and indirect benefits accruing to those employed in the state sector amounted, on the average, to 526 yuan, which corresponded to 82% of the average wage. On top of this, these workers get some other advantages that make their indirect wage at least equal to their direct one.
Such benefits do not, however, exist for the peasantry. And while the direct urban wages were three times the incomes of peasants in 1978, the extent of the various benefits accruing to the workers probably doubled this gap.
What is more, since 1978, there has been a major growth in social benefits, exceeding that of wages. Thus, despite the extent of the increase in peasant incomes, the gap between the cities and the countryside remains marked, as Table 1 shows.
The improvement in the condition of the blue and white-collar workers is also shown by the increase in the consumer durables owned by urban households. (Table 2)
TABLE 2
For every hundred urban families 1982 1981 sewing machines 73.10 70.41 washing machines 16.09 6.34 refrigerators 0.67 0.22 bicycles 146.65 135.90 radios 103.04 100.52
TVS 73.00 57.65 tape recorders 17.99 12.97 cameras 5.57 4.29
One can see the stagnation of workers' incomes between 1957 and 1978 and then a rapid increase, with a gap persisting between the workers' incomes and those of peasants. But as regards the latter it is also necessary to add the growing share of income from private activity, which little by little has come to absorb all farming.
A more detailed sector-by-sector study shows a wage spread going from a top average annual wage of 948 yuan in construction to 909 yuan in transport, to 860 yuan in research, only 819 yuan in administration, and 852 in light industry. In general, the corresponding wages in the collective sector are 15% to 25% less (738 yuan in construction in the collective sector as against 948 in the state sector; 644 yuan in the collective sector of light industry, as against 852 in the state sector).
However, the absolute level of wages and indirect benefits only partially reflects the privileges of urban wage earners, and of bluecollar workers in particular. Because these strata have access to what is literally unobtainable elsewhere -running water, a real sanitary system, quality primary and secondary schools for children, movies, and so on.
Moreover, in order to deal with the considerable urban underemployment that was creating social tensions in post-Maoist China, workers have been allowed to take early retirement
TABLE 1
Annual Income
(in yuan)
Year
State sector
Collective sector
Peasant income
(collective part)
1957
637
-
43.40
1978
644
614
88.53
1983
865
826
169.00
International Viewpoint 11 November 1985
and to leave their jobs to one of their children. Thus, out of eight million new workers hired in 1979, 3.3 million of them inherited their job from a parent (this is the so-called substitution method).
These impressive advantages by comparison with the life of the peasants involved the workers' submission to the regime and more directly to the authority of the plant managers (in fact, to the party secretaries). This submissiveness was all the greater because the benefits were directly linked to the industrial unit. Workers could not be fired from the enterprises (unless they committed some grave offence), but they could not change enterprises either.
While workers' wages stagnated
More workers can afford consumer goods now (DR)
While workers wages stagnated (especially during the Cultural Revolution), the low productivity of labor and the indirect benefits accorded made the position of state factory workers one of the most envied (leaving aside of course the very privileged positions of the top leaders).
This status was so envied that it was not accessible to all workers. Apprentices, who were paid on various limited scales and could be assigned to any job (and often pushed around) and who did not enjoy all of the indirect benefits were excluded from it. But at least the apprentices could hope to enter into the central ranks of the working class and aspire to the famous "iron rice bowl." Temporary workers were not so fortunate. Becoming numerous after the onset of the Great Leap Forward, they were peasants rented by industry for a given period of time from their people's communes. Paid less than the regular workers, they enjoyed no indirect benefits, and they were sent back at the end of their contracts to their people's communes, which collected a part of their wages.
Despite all this, the temporary workers earned more than they got from their work in the fields. There was also a less well-known category of temporary workers who were of urban origin. They were often wives of very unskilled workers. They seem to have gotten the status of workers in the 1970s, but there is little information about this.
A good part of the tensions in the working class, especially during the Great Leap Forward and before the Cultural Revolution, were generated by conflicts of interest between the privileged and underpriviledged sections of the working class.
In any case, the better part of the working class identified with the real egalitarianism that marked the situation of the regular workers during the Maoist period.
One of the objectives of the economic reform underway is to break the "iron rice bowl," that is, to eliminate the gains of the workers and above all the guarantee of a job for life.
Of course, caution is de rigueur. Although they are often attacked and denounced in the press, the so-called economically harmful effects of the "iron rice bowl" have so far not prompted a head-on assault on the privileges attached to the status of workers in the state factories.
In fact, challenging the gains of the workers and egalitarianism, to which they are clearly favorable, would mean attacking one of the two main pillars of the regime (the other was the regimentation of the peasantry through the collectivization that has today been abandoned.)
Unlike the peasantry, the workers have shown that they can react otherwise than silently. There are limits to the submissiveness of the workers when it comes to defending their gains.
The logic of the reform, nonetheless, pushed in the direction of a greater mobility of labor, which is incompatible with the rigidities of the past. This means nothing less than letting go - firing - excess workers in the enterprises. Moreover, it calls for introducing a process of differentiation within the working class by permitting the widening of the wage spread, adjusting bonuses to the real productivity of the workers and the enterprises. (9)
Two methods have been proposed. The first is a new hiring policy. To replace the old "labor and personnel services," of which it has been said that they were "bodies operating in the 1980s with a mentality of the 1960s that functioned in the framework of a 1950s planning system," new organs are being formed. They are the "Labor Services Corporations," which are to place workers on the basis of contracts.
The contracted workers get the same wages and the same benefits as their regular counterparts, but they no longer have a lifetime entitlement. During the interval between contracts, the Labor Services Corporation takes charge of paying the workers.
According to Renmin Ribao (People's Daily) of March 8, 1983, in the future all workers are to come under the contract system. But that is still very far away now.
In the meantime, the regime is trying to outflank the resistance of the workers. The unions are being pressed into the breach to prevent strikes and educate the workers in the new course. This is not at all easy.
In fact, such an important gain as a lifetime guarantee of a job, which is probably the major advantage offered by "actually existing socialism" in the various countries where it prevails, will not be easily given up.
Working class resistance is fierce. We are seeing work stoppages and demonstrations of hostility toward the new contract workers. There is strong pressure on the managerial and technical professionals in the enterprises, who often have the same reactions and the same interests as the workers.
In its February 27, 1984, issue, Renmin Ribao wrote, "to be a managerial or technical professional [cadre] in these times is like sitting on a volcano." This shows how strong the pressure is from both above and below. (10)
9. has been given An example, no doubt an extreme one, indicates the competition among enter- recently that also prises to get skilled workers. Thus, a small firm offered four highly skilled Shanghai technicians 10,000 yuan in compensation for making the move, 600 yuan for moving costs, monthly wages of 250 to 300 yuan, an initial bonus of 2,000 yuan, and one percent of their future profits. The aim was to create a new enterprise. And 1,000 yuan a year is considered a good wage!
10. More significant still, the Chinese press notes that during the first quarter of 1984, wages increased more than productivity, which is just the opposite of the aim of the economic reform.
19
International Viewpoint 11 November 1985
CHINA
The regime is trying to handle this situation tactfully. At the same time as demanding the dismantling of so-called "workers democracy,"
it is urging that the "voice of the workers" be listened to, and that a certain participation of workers in management be encouraged.
This is so that, as the Workers
Daily of August 15, 1984, pointed out — the workers will "make suggestions to the management and not problems for them."
Moreover, the regime is trying to convince the workers that it is in their interests to change the old situation. Is not the present system of eight wage grades very rigid, it asks.
Statistics provided for the Tenth
Congress of Unions in October 1983 showed that 71% of workers are on the bottom of the scale (incomes of less than 35 yuan a month), only
2% are at Grades 7 and 8 (incomes three times higher, repectively 90 and
120 yuan).
Overall, caution is in force, and managers are far from having complete freedom of maneuver. They are counting on reform of wages to move things forward and to induce people to drop overly egalitarian traditions.
The tendency is toward the granting of bonuses in a flexible way without restrictions, while penalizing through taxes bonuses that exceed the rise in profits.
Moreover, they are trying to introduce "penalties" for nonfulfillment of quotas. But in this case as well, it is not clear that these measures are being really applied. What is more these rules are applicable to state enterprises. The situation is still more uncertain in the collective enterprises. reform are to increase the spread of The tendency and the logic of the we tendency and the logic or the wages and to seek to link bonuses to productivity (which is not easy given the ingrained habits). Furthermore, the different types of enterprises are creating working-class strata with different statuses.
As in the West, we are seeing the emergence of a multitrack society, with the appearance of a "privatized" stratum, temporary statuses in the collective enterprises, and changes in the situations in the state enterprises depending on the successes and failures of each enterprise.
or course, this ditterentiation is Of course, this differentiation is only in its beginnings. There is strong resistance. The automatic payment of bonuses to all is a tradition deeply rooted in the minds of workers.
What is more, a large part of the industrial apparatus and sections in the higher echelons of the central apparatus are too incapable or too ignorant to adjust to the new rules and may continue to rely on the old usages in 20 order to sabotage the experiment in progress.
There is a marked difference between cities such as Peking, which are in the forefront of the reform and those such as Shanghai, which are bringing up the rear. While the authorities in Peking have just launched an energetic reform of the planning system (in March 1985), Shanghai is being subjected to constant pressure to catch up with the reform in other cities.
The delays in Shanghai are certainly owing to the elderliness and inertia of the local apparatus, as well as the aging of the industrial plant. But they also reflect the traditions and gains of a great working-class metropolis. Moreover, this city represents by itself alone 11.1% of the total industrial product and 16.6% of the state's revenues.