Manas Chakravarty: China: what lies beneath

Growing social tensions indicate that China cannot afford a slowdown

Earlier this month, tens of thousands of angry farmers clashed with police and paramilitary forces over a dam project in south-west China's Sichuan province. The farmers were protesting against the meagre compensation paid for moving 100,000 of them from their homes and their farms in the river basin to mountainous and less fertile land.

Two villagers and two policemen were reportedly killed. The government responded by threats and a show of force, and by imposing martial law in the region.

The confrontation continued till the Chinese president and prime minister intervened, suspending all work on the project till the compensation issue was resolved.

Barely two weeks earlier in a city in the same province, a government official sparked a riot when he beat up a migrant worker. Some estimates say that as many as 80,000 workers clashed with police in a night of rioting that forced the local government to call in paramilitary units from neighbouring towns.

Many of the rioters were people evicted from their villages to make way for the massive Three Gorges Dam on the Yangtze River. These migrants are unemployed and are forced to live on a 70 to 80 yuan (Rs 400 to 450) monthly allowance paid by the government.

Newspapers like South China Morning Post and Straits Times have been documenting a sharp rise in social unrest in China, with protests not only in the rural areas but in the coastal cities as well.

Early last month, 3,000 workers in an electronics factory in Shenzhen Special Economic Zone in southern Guangdong Province sat on the main highway, disrupting traffic for hours. Around the same time, 5,000 striking employees in Dongguan, another manufacturing city in the same province, clashed with anti-riot police.

In a textile factory in central Shaanxi province, nearly 7,000 workers took over and occupied the factory. In Xian, the capital of Shaanxi, the main bus terminal was blocked for more than a month by workers from a state-owned factory. Meanwhile, up to 10,000 retired workers have protested for days in Anhui province, demanding that authorities raise their pensions, which are being squeezed by rising prices.

These are only a few instances of a wave of protests sweeping over China. Outlook Weekly, a Communist Party publication, reported recently that China experienced more than 58,000 major incidents of social unrest in 2003.

That's 158 "incidents" a day on an average, a figure 15 per cent higher than a year earlier, with more than 3 million people taking part in the protests. This year, if the reports are to be believed, things are worse.

Welcome to the other China. This is a very different China from the one we're supposed to see "" the one with the soaring high-rises and magnificent flyovers, the glitzy malls and plush five-star hotels stuffed with well-dressed shoppers, and modern highways chock-full of new cars.

This is what lies beneath the success stories of Shanghai, Shenzhen and Beijing, the cheap labour that makes it all possible, the soft underbelly of the dragon.

This is the China of migrant workers, denied access to medical care, proper housing and education for their children. They have no trade unions or written contracts "" although Chinese law guarantees these rights.

They live in their factories in cramped dormitories, and need permission to go outside. They earn pitiful amounts far below the legal minimum wage, working for as little as $1 for a 12-hour day, six or seven days a week.

Their real wages have remained stagnant despite China's new-found prosperity. As Li Shi, former Vice-Chairman of the All-China Federation of Trade Unions reports, workers complain that "We get up earlier than the chickens, work harder than bulls, and eat worse than pigs."

To make matters worse, their employers frequently delay paying their wages. The China Federation of Trade Unions says that billions of yuan in pay is owed to 100 million migrant workers.

Often, the clashes are with other ethnic groups left behind in China's headlong rush to capitalism. Earlier this month, Reuters reported that Chinese riot police clashed with Uighur Muslims in the southern city of Guangzhou.

Late last month, hundreds of heavily armed police imposed a curfew on university campuses in Inner Mongolia. And martial law had to be declared in some areas of central Henan province after clashes between Hui Muslims and Han Chinese.

While the official death toll from the conflict is seven, the New York Times reported that as many as 148 people were killed, including 18 police officers.

The pitiful living conditions of China's huge migrant worker population are just one of the reasons for the unrest. The closure and sale of thousands of state-run enterprises has eliminated millions of jobs.

Worse, under the communist system, jobs carried with them subsidised housing, health care and pensions "" in short, an entire social security net, known in China as "the iron rice bowl". Capitalism has smashed that rice bowl.

The new President, Hu Jintao, has said that he will be selling off the remaining 190,000 state-owned enterprises, and only 190 companies will remain in government hands. That's likely to compound the problem.

Earlier this year, a book called An Investigation Into China's Peasantry, which exposed the poverty and corruption in rural China, became a bestseller before it was banned by the authorities.

The scale of the protests has unnerved the government, which has responded in two ways. One of them is the usual one of clamping down on protest by arresting the leaders. But this has proved counter-productive.

In many instances, the striking workers have the sympathy of the local population, who have fought side by side with the workers against the police. More recently, the central government has sought to show that it is on the side of the workers, and it is the corrupt local officials who are to blame.

The Ministry of Labour and Social Security has announced that from December 1, employers who delay paying wages must pay an extra 50 to 100 per cent of the amount owed to the workers. The government has eased restrictions on travel by peasants, making it easier for them to work in the cities.

It has encouraged people to submit petitions against injustices, and the Petition Office was inundated with more than 10 million petitions last year. The government is also funnelling billions of yuan to the underdeveloped Western regions.

But many of these measures are destined to remain on paper, since widespread corruption can buy immunity and ensure that the rules are not implemented. For instance, it has been estimated that only two out of every 1,000 petitions have been resolved.

Does all this mean that the Chinese Communist Party is losing its iron grip over the masses? Earlier this year, Murray Scott Turner of the RAND Corporation in Washington DC pointed out that according to newly published internal statistics by China's Ministry of Public Security, "mass incidents" or large-scale protests increased from 8,700 in 1993 to 32,000 in 1999, and he estimated that they were 40,000 between January and September 2000.

Turner also points out that there is a clear trend towards larger and larger demonstrations, which means that more people are participating in the protests. In short, things are getting worse.

Nevertheless, there is no evidence that the state is losing control. Protests "" often violent ones "" have been a regular feature of life in developing societies, and we have our fair share of them in India as well.

Living conditions in the slums in cities across the Third World are much worse than in China's dormitories. Riots and protests were common in 19th century Britain and the US.

Simply put, the unrest in China is part and parcel of the capitalist transformation of society, and an inevitable consequence of its uneven development.

In a democratic polity like India, popular participation in the political system and a free press serve as safety valves, allowing the masses to let off steam. That safety valve is missing in China.

That is the reason why Chinese leaders are obsessed with growth. Capitalism may indeed have increased inequality and smashed the iron rice bowl, but there is no doubt that it has lifted millions of workers from poverty and transformed the face of China.

Why else do hordes of migrant workers flock to the cities, if not to escape harsher conditions in the countryside? As former Premier Zhu Rongji said in his valedictory address last year, "Development... is the key to resolving all the problems that China is facing. We must maintain a comparatively high growth rate in our national economy."

There's no way China can afford a sharp slowdown in its growth.