Laid-off workers in a workers' state: unemployment with Chinese characteristics

Laid-Off Workers in a Workers’ State

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Laid-Off Workers in a Workers’ State Unemployment with Chinese Characteristics

Edited by

THOMAS B. GOLD, WILLIAM J. HURST, JAEYOUN WON, AND LI QIANG

LAID-OFF WORKERS IN A WORKERS’ STATE

Copyright © Thomas B. Gold, William J. Hurst, Jaeyoun Won, and Li Qiang, 2009. All rights reserved. First published in 2009 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN-13: 978–0–230–61370–6 ISBN-10: 0–230–61370–5 Library of Congress Cataloging-in-Publication Data Laid-off workers in a workers’ state : unemployment with Chinese characteristics / edited by Thomas B. Gold . . . [et al.]. p. cm. Includes bibliographical references and index. ISBN 0–230–61370–5 1. Unemployed—China. 2. Unemployment—China—Social aspects. 3. Unemployment—China—Political aspects. I. Gold, Thomas B. HD5830.A6L342 2009 331.13⬘70951—dc22

2008049760

A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: April 2009 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.

Contents

List of Figures and Tables

vii

Acknowledgments

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Introduction William J. Hurst, Thomas B. Gold, and Jaeyoun Won

1

Part 1 Class Politics Broadening the Debate on Xiagang: Policy Origins and Parallels in History Lei Guang 2 Xiagang and the Geometry of Urban Political Patronage in China: Celebrated State (once-) Workers and State Chagrin Dorothy J. Solinger 3 Class Formation or Fragmentation? Allegiances and Divisions among Managers and Workers in State-Owned Enterprises Kun-Chin Lin 1

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Part 2 Frames and Framing 4 5

Voices of Xiagang: Naming, Blaming, and Framing Eva P.W. Hung and Stephen W.K. Chiu The Power of the Past: Nostalgia and Popular Discontent in Contemporary China William J. Hurst

95

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Part 3 Workers’ Welfare and Reemployment 6 China’s Older Workers: Between Law and Policy, Between Laid-Off and Unemployed Mary E. Gallagher

135

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Contents

7 The Professional Reintegration of the “Xiagang” Li Peilin and Zhang Yi

159

Part 4 Explaining the Lack of Contention 8 Farewell to Socialist Labor in China Jaeyoun Won 9 State Policies and Chinese Laid-off Workers’ Limited Resistance Yongshun Cai 10 The Reemergence of Street Protests: State Workers Challenge the Chinese State Antoine Kernen

185

203

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Notes on Contributors

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Index

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Figures and Tables

Figures 1.1 1.2 1.3 1.4 1.5

The number of reportings on unemployment (shiye) problems in China and abroad Number of articles that use shiye and xiagang in the same text or as one single phrase Evolution of the xiagang policy Incidents of workforce reduction in China, 1957–1990 Workforce reduction in select cities in China: 1961–1963 and 1998–2000

18 19 22 29 31

Tables Year-end surplus and xiagang workers in state-owned units, 1990–2000 3A.1 Working class fragmentation and collective actions 3A.2 Major organizational characteristics of subsidiaries of national oil corporations 3A.3 Approximate figures of financial outlays for workforce reduction 2000–2002 5.1 Dimensions of nostalgia observed in recent China scholarship 7.1 Statistics describing the xiagang interviewed (in %) 7.2 Income of xiagang 7.3 Class identification among the xiagang 7.4 Social instability coefficient 7.5 Usefulness of vocational training courses aiming at the reintegration of the xiagang 1.1

25 89 90 91 121 167 170 173 174 176

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Figures and Tables

8.1 Outstanding workers (quanguo shida jiechu gongren) for the year 1998 8.2 Outstanding employees (quanguo shida jiechu zhigong) for the year 1999

196 197

Acknowledgments

This volume began as a conversation among editors Gold, Hurst, and Won in Gold’s office in Berkeley in the spring of 2003. Hurst and Won were writing dissertations about laid-off (xiagang) workers in China, and we noted that up to that time there were only a few scattered articles on what struck us as an important social issue worth a volume of its own; xiagang offered a window into exploring a range of significant topics: stratification, social movements, social welfare, class identity, changing state–society relations, and comparative post-socialist transformation among others. Hurst and Won had amassed a rich trove of highly moving personal stories of workers whose worlds had been suddenly and unexpectedly shattered, helping to bring rather abstract social science concepts down to a very human level. We compiled a wish list of possible contributors and solicited chapters from them, with a very encouraging response rate. Hurst, Won, Guang, and Gold, along with M. Francis Johnston, presented a panel on the topic at the October 2003 Annual Meeting of the Western Association for Asian Studies in Phoenix, Arizona, but we did not convene a formal workshop of all the contributors. Draft chapters were circulated and many of the authors discussed the issues with each other over time to help bring about a coherent volume. Keeping in touch was no easy task, given the diverse locations of the authors, and the fact that many of them (including two editors) moved to new universities, countries, or continents during the course of the book’s development. Finally, Professor Li Qiang, dean of the School of Humanities and Social Sciences at Tsinghua University, assisted the project as it evolved in so many ways that we have listed him as a coeditor. We wish to thank Ken Kopp, Kate Maich, and Han Gru for help in the editing and preparation of the manuscript, Zachary Levenson and Mark Selden and Susan McEachern for helpful advice at an early stage. A grant from Berkeley’s Center for Chinese Studies facilitated our participation in the Phoenix meeting, and another grant from Berkeley’s Committee on Research paid for editorial assistance. Joanna Mericle and Colleen Lawrie of Palgrave MacMillan have been extremely supportive and patient with us, for which we are very grateful.

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Introduction William J. Hurst, Thomas B. Gold, and Jaeyoun Won

A fundamental truism of Marxism–Leninism asserts that the industrial proletariat will comprise the leading class in any socialist order. In its most radical formulation this principle has been described as the “dictatorship of the proletariat” or the “people’s democratic dictatorship.” Political parties that led revolutions in the name of socialism claimed to be doing so in the interest of the working class, even if the workers themselves, afflicted with false consciousness, were not aware of their true interests. In most cases, these “proletarian revolutions” have occurred in predominantly agrarian societies, such as China. Ironically, in political economic environments such as these, so-called worker movements have been compelled to create an urban working class as part of the process of building a workers’ state. The Chinese Communist Party (CCP) created a modern industrial working class in a predominantly rural and agricultural society, bestowing a range of economic, political, and social benefits on it. But with the increased tempo of the party-instigated post-Mao reforms, the proletariat has arguably experienced the greatest downward mobility of any social group in China over the past fifteen years, while a newly reconstituted bourgeoisie is in ascendance. This book analyzes the fate of China’s proletariat through an in-depth examination of xiagang, a stop-gap policy of laying off at least thirty million workers from state-owned enterprises (SOEs).1 Xiagang offers a lens through which we can understand many of the profound dislocations plaguing Chinese society in the context of the marketization, privatization, and globalization of a once proudly planned, state- and collectively owned, self-reliant economy. Although the transformation in China is extreme, it offers insights into understanding the social, psychological, and political consequences of processes of economic reform more broadly, in post-socialist societies as well as in developing societies more generally.

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The Creation and Undoing of the Chinese Working Class After victory in 1949, aided and inspired by the experience of the USSR, the CCP concentrated its efforts on rapid urban-based heavy industrialization and the creation of a true proletariat. The new Chinese workers were the putative “masters” (zhurenweng) of the state and their firms. The CCP, which by definition represented their interests, constructed a system based on the urban danwei, or unit, which, beyond being just workplaces, provided workers’ residences and mechanisms for the disbursal of welfare benefits, such as health care, childcare, schooling, recreation, retirement, and even cremation (i.e., truly comprehensive social care and protection from womb to urn). Workers in these danwei comprised a genuine labor aristocracy in terms of material benefits, social prestige, and political status. Children in Chinese cities quite sincerely desired to become workers when the time came to receive a job assignment—labor markets having been eliminated in the 1950s and replaced with a system of state allocation according to the plan ( fenpei zhidu). China’s state-led reforms, which began at the end of 1978 and gathered speed in the 1990s, have fundamentally changed the place of China’s proletarians in all stratification orders. The road to xiagang has not been a strictly linear or rapid one, however. Pressures had existed on the urban labor market since at least the period following the Great Leap Forward.2 Beginning in 1962, a policy of sending urban youth to the countryside was instituted to relieve some of this pressure. After the end of the tumultuous “Cultural Revolution decade” (1966–1976) and the dawn of reforms in the late 1970s, the “returned youth” placed a major strain on the already stretched SOE labor system. The policy at the time, however, was to place all the returnees as quickly as possible so as to prevent yet another threat to China’s social stability—a policy that resulted in drastic overstaffing of most SOEs. In the uncomfortable interim between return from the countryside and permanent placement in an SOE, returned youth were often placed in an institutional “holding pen”—the “labor service company” (laodong fuwu gongsi). These quasi-welfare transitional institutions were to later become a model for the “re-employment service centers” (zaijiuye fuwu zhongxin; RSC) established in the late 1990s for xiagang workers. In fact, not only did the post-Cultural revolution policy call for reabsorption of “sent-down youth,” but it set in place a practice known as dingti, under which SOE employees could pass their posts down to their children. This, in essence, extended the term of the iron-clad employment guarantee from the life of the individual worker to the life of his or her

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entire lineage. The over-compensation for loss of employment security for the Cultural Revolution generation only exacerbated problems of bloated workforces and inefficient firms. What is more, the productivity of many of the returned youth was significantly lower than it may have been had they remained in the cities. Having been deprived of opportunities for higher education, most in this cohort ended up with very limited skills, training, or work experience. Beginning in 1987, a “contract system” was introduced for SOE employees. This new system was meant to place all state and collective sector workers on fixed-term contracts, eliminating the previous lifetime employment guarantee. While the law changed radically, little change was evident on the ground. Some desperate enterprises, notably in the Northeast, were already shedding workers through various informal schemes and long leave policies. Elsewhere, however, few workers felt the new law’s intended pinch. In the early 1990s, many firms began to push workers into intermediary arrangements, famously “daigang” (waiting for an assignment) and “liang bu zhao” (a clean break between the firm and worker, under which both sides agreed “not to look for” the other). Growing out of these was the new policy of xiagang, literally “off-post” or “down from the post,” which was meant as a temporary transitional status defined by the assumed permanent separation from SOE work (though not yet from official membership in the danwei) and the not yet achieved reemployment in some other line of work (which would bring with it full separation from the old danwei). The processes through which state enterprise workers were gradually marginalized under a system that still nominally revered them as masters thus differed radically from the experiences of hundreds of thousands of migrants suddenly downsized in autumn 2008 on the heels of an international financial crisis. In some cases, particularly export-dependent regions of Guangdong province, foreign investors suddenly disappeared, leaving their workers stranded and uncompensated. Migrants were always on the political and social periphery in urban China, but their fates were linked inextricably to the world economy. Laid-off SOE workers, on the contrary, remained largely insulated from short-term effects of international capital flows, front and center on stage as key constituents of the CCP, even as their economic and social positions eroded and decayed beyond recognition.

The Xiagang System The term xiagang refers to a very particular and peculiar category of the unemployed in urban China. Neither formally disassociated from their

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work units nor still employed within their confines, xiagang workers lived in a liminal state of discomfort. Trapped in the limbo between plan and market, between work and joblessness, both their class identity and physical subsistence were routinely in doubt. The xiagang system was first endorsed at the central level in 1995.3 Redundant, inefficient, unnecessary, or unaffordable workers were to be taken out of the active labor force without being immediately ejected from the state’s embrace.4 Xiagang workers were no longer employed in production and were not entitled to wages or most other benefits due to SOE workers; but they were still formally part of their work units. But determining exactly which workers were xiagang was slippery from the beginning. To clarify this, an “er wu” (two no) definition was promulgated by the State Statistical Bureau and the Ministry of Labor in 1996. Xiagang workers were no longer working in their work units (first no), but had not yet severed formal labor relations with their units (second no). They remained attached to SOEs but were kept at arm’s length.5 At the fifteenth Communist Party Congress in 1997, a stronger and clearer line was taken. All “surplus” workers were to be designated as xiagang. This was justified under the slogan of “ jianyuan zengxiao” (cut staff, increase efficiency). Newly xiagang workers were to register with and enter RSCs under a system modeled on a pilot scheme initiated in Shanghai during 1995 and 1996.6 RSCs were to provide workers job training, job placement assistance, and basic living allowances, called jiben shenghuo fei, and paid in amounts determined by local governments, for three years.7 After three years, workers would be discharged into the open market. If they found new work before that, they were to report it and leave the RSC.8 “Hidden employment” (yinxing jiuye) quickly became a serious concern among policy makers, however. Many charged that workers were engaging in side jobs or employment activities even while remaining in an RSC and drawing benefits. The State Statistical Bureau and Ministry of Labor, reacting to this fear, changed the official definition of xiagang in 1998. The old “er wu” formulation was dropped and a new “san wu” (three nos) version adopted. Under the new rules, a xiagang worker was: no longer employed in his or her work unit (first no), had not severed formal labor relations with the work unit (second no), and had not yet been reemployed “in society” (third no).9 Upon registering with the RSC, workers received laid-off certificates, xiagang zheng, and access to preferential policies. These policies varied by region, but often included tax breaks, subsidized loans, loan guarantees, additional forms of job placement assistance, and other social services.10 Shortcomings and abuses plagued the RSC system, however. For example, in many localities, only workers registered with an RSC and issued a

Introduction

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xiagang zheng would be counted as laid off.11 Worse, many RSCs languished with inadequate funding where firms and local governments could not contribute their one-third funding shares. Compounding the problem, the central government often refused to pay into RSCs lacking local financing out of frustration with what it saw as local governments’ unwillingness—rather than genuine inability—to pay their fair share.12 The central state eventually tried to remedy these problems. Most importantly it agreed to pay some portion or all of the one-third shares of local governments or firms in distress. But by 2000, the central government came to see the xiagang policy and RSC system as a general failure. In that year, it was declared that the xiagang category would be phased out and all RSCs closed by 2003. Workers laid-off after 2000 were to be transferred directly to “registered unemployed” (dengji shiye) status, entitling them to additional state benefits and subsidies. Even though a new system capable of providing for laid-off workers’ welfare and reemployment had yet to emerge, by 2008 the old system had faded conclusively from the scene. Though millions of SOE workers remained out of work, the xiagang conceptual and social category was no longer meaningful. We contend that there were specific social and political dimensions of xiagang, as distinct from registered unemployment or informal unemployment within the enterprise, that are worthy of analysis. This is what the following chapters attempt. But before moving ahead, it is worthwhile to examine the broad contours of xiagang workers’ lives.

The Current Situation By 2008, many SOEs had been privatized but left in limbo between plan production, market profitability, and bankruptcy liquidation. Most SOEs had a nontrivial portion of their assets stripped by managers and officials. Entitlements became a thing of the past for workers and benefits were largely commoditized, meaning recipients had to contribute to enjoy them. Foreign investors were encouraged to take advantage of the low wages of Chinese workers (particularly rural–urban migrants who toiled in the “sweatshops” of Southeastern China’s Special Economic Zones) as well as the absence of strikes and other disruptive labor actions. Without apparent irony, the CCP has presided over the creation of a new Chinese bourgeoisie, and passed laws to protect this new class’s material interests while granting it legitimate social and political status. The Chinese proletariat bore the sharpest losses from reform. All that workers had been raised and propagandized to take for granted as part of

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their leading role was snatched away or torn asunder. Their own children no longer aspired to follow in their footsteps into the working class. Industrial jobs increasingly went to the rural migrants who flooded into the cities with the dismantling of the communes and elimination of restrictions on leaving the countryside for urban areas. These migrants were willing to take any job, including those that laid-off workers considered beneath them or that were so poorly compensated as to fail to ensure even basic subsistence. Despite this general sense of despair, the precise contours of unemployment and declines in workers’ livelihoods are maddeningly difficult to pin down. Zhang Sai, a former head of the State Statistical Bureau, complained that “China’s statistical system is very scientific, but corruption can transform the scientific into unscientific.”13 Economists from both China and the West estimated in a special forum on Chinese statistics, published in the December 2001 issue of China Economic Review, that problems were truly epidemic. Local authorities frequently concealed or distorted statistics for variables related to xiagang—strikes, mass incidents, as well as less sensitive measures such as the “general situation” of Chinese laid-off workers—sometimes on explicit orders from the central state. Officially, the unemployment rate in China from 1997 to 2000 remained steady at 3.1 percent. An even slightly more nuanced look, however, reveals the multiplicity of views and numbers. According to the Green Paper on Population and Labor (Zhongguo renkou yu laodong wenti baogao) published by the Chinese Academy of Social Sciences in 2002, the officially registered unemployment rate was only 3.1 percent with 6 million unemployed, but if laid-off workers were included, it increased to 7.8 percent (p. 187). A “Delphi method,” aggregating experts’ evaluations, puts the rate at 7.1 percent. The Blue Book of the Chinese Society (Shehui lanpi shu), published by the same institution in 2002, quotes an estimate by academic scholars of the unemployment rate at 8 percent (p. 166). The Development Research Center of the State Council (Guowuyuan fazhan zhongxin) assessed the urban unemployment rate at over 10 percent (Wang, M., ed., Restructuring China's Social Security System [Beijing: Foreign Languages Press, 2002], p. 58). If migrants without urban hukou (residence permits) were included, officials of the Ministry of Labor and Social Security claimed that the unemployment rate would skyrocket to 28 percent. So we can say with confidence that China’s urban unemployment rate at the height of the xiagang system was somewhere between 3 and 30 percent! The injuries to workers from this wave of layoffs can be grouped into three categories. First, there was the material loss of livelihood. With the loss of state sector employment came a dramatic drop in income and loss of stability for laid-off workers. In very real and material terms, laid-off workers were poorer and in much more precarious circumstances than they were while still employed. Xiagang workers quite literally went from

Introduction

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being among the higher-income groups in Chinese society to being as poor as or poorer than the average rural farmer. Second, there was a loss of political privilege and social status that once accompanied membership in the category of “worker.” As the socialist proletariat, and at many times as masters of the shop floor, Chinese workers long enjoyed political clout and social status that far outweighed their numbers or economic resources. The loss of membership in the working class—and the degradation of workers as a category—placed xiagang workers in a much worse position politically and socially, just as their loss of income and benefits took a toll on their economic standard of living. Third, and finally, was the “mental violence” of shocking and rapid social dislocation and the disintegration of one’s class membership. This is the internal or psychological injury of being laid-off and cast out of the politically valued and socially respected classes. Combined with the political and social loss of power and status, and the economic loss of livelihood and living standard, this internal loss of self-respect, self-certainty, and identity undermined xiagang workers’ mental health, family relationships, and general well-being. As for the relations between laid-off workers and the state, there were also some important changes in this area. Some workers engaged in collective action and contentious mobilization in the face of layoffs; others were forced to rethink their expectations of the state, while the state for its part struggled to provide stopgap welfare assistance. State welfare measures were not always successful, and workers’ attempts to challenge the state’s authority to cast them out of the polity have not yet gotten beyond their earliest stages. Reports of widespread, if not universal or comprehensive, reemployment successes, and of some workers increasingly making use of new tools such as the legal system to press their cases and advocate for their grievances, however, provide some evidence for the idea that a new equilibrium is soon to be established. The years ahead will tell us what such a new order might look like. But we feel that we are now in a position to offer an initial assessment of a number of aspects of SOE layoffs; an assessment that is more overdue than premature. Only once we know a little bit more clearly what has unfolded over the past ten years (the third decade of Chinese reform, 1998–2008) will we be in a position to speculate about what the future might hold.

Our Contribution The chapters in this volume fill several gaps in the existing literature on xiagang. That literature has developed markedly in the past ten years. In the

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Chinese literature, there have been four main lines of argument. The first group of writings, by authors such as Cai Fang, Ou Wenquan, Fan Maoyong, and Hong Qiao14 and many official Chinese government publications, has focused on questions of what the phenomenon of xiagang is, why it is necessary, and how xiagang workers are to be counted or categorized. The second general line in the Chinese literature, represented in the work of literally many dozens of scholars, taking up the largest proportion of scholarly works, examines what the state has done to ameliorate or solve the problems of xiagang, assessing which policies have been effective or ineffective, and suggesting what new policies could usefully be adopted in the future. Beyond these relatively safe areas of inquiry, a third line focuses on management of the political and social consequences of xiagang— advancing arguments about such topics as social and income inequality, the maintenance of social stability, and so on. Though this segment of the literature has remained small, it has produced excellent works, such as those by Li Peilin, Zhang Yi, Yu Faming, Hu Angang, Chen Simin, Han Jingxuan, Ma Li, and Zhang Wei.15 Fourth, and finally, there has been a small but growing body of Chinese literature that is focused on xiagang workers themselves. Making use of both in-depth interview methods and, increasingly, survey research, authors such as Li Peilin, Zhang Yi, Li Qiang, Yu Fawu, Guo Jiyan, and Wang Yongxi16 have advanced arguments regarding the impact of unemployment on workers’ lives, the processes by which workers have found reemployment and either have adapted or ought to adapt to changing political-economic conditions on the ground. The English language literature on xiagang has been considerably smaller than that in Chinese. It has generally clustered into three basic categories. Most authors in all three categories, with a few notable exceptions, have relied on interview-based research, usually conducted in one or a small number of research sites. The first category of English literature focuses on what could be called the framing of workers’ dislocation. Besides Jaeyoun Won’s work in this volume, scholarship by others such as Ching Kwan Lee and Mary Gallagher has helped to build up this subliterature. The second and to date most prominent category in the English literature is centered on the analysis of xiagang workers’ contention. Major works in this category have attempted to explain patterns of xiagang workers’ contentious collective action or lack thereof. Among the more recent contributors to this sub-literature are Ching Kwan Lee, Feng Chen, Marc Blecher, and William Hurst. The third and final segment of English literature examines coping methods and pathways to reemployment for xiagang workers on the ground. In this category, Dorothy Solinger’s work has figured particularly

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prominently, but others such as M. Francis Johnston and Feng Chen have also recently added to this group of studies. The authors in this volume concentrate on several areas that have been relatively weak so far. First, the chapters by Guang, Solinger, and Lin all address the critical issue of class definitions and coalitions. These three authors reconceptualize the Chinese working class, remind us of workers’ historical ties to “peasants,” and examine the relationships between laidoff workers, SOE managers, and the state. They do this in more detail than is offered elsewhere in the literature, establishing a new standard for studies of the class politics of xiagang. Second, Hung and Chiu, along with Hurst, examine the cognitive templates through which laid-off workers perceive their situation. Though the analysis of frames and framing has come into its own in the wider study of contentious politics, it has remained undeveloped in the study of xiagang workers. Furthermore, both these chapters pursue the linkages between workers’ perceptions and their structural positions to a greater extent than yet seen elsewhere. Third, Gallagher, Li, and Zhang, in their two chapters, point out new angles for looking at laid-off workers’ welfare protection and reemployment. Using law and society and human capital theories to analyze the material situation and reemployment prospects of laid-off workers, these chapters not only inform us about workers’ lives but also help reorient our thinking about the reemployment project. Fourth, and finally, Won, Cai, and Kernen all address the workers’ contention that has garnered so much attention over the past ten years. But they attack the problem from a new angle, telling us not why workers have protested but why they so often have not. Or why, when they have, workers’ protests have remained confined to single firms. By explaining why this dog has rarely bitten, these authors give us a way in which to understand Chinese workers’ usual quiescence in juxtaposition to their occasional activism.

Conclusion Referring to some of the major periods of dislocation in China, some Chinese jokingly refer to the three “xia” or “goings down”: xiaxiang or “going down” to the countryside of tens of millions of young people during the Cultural Revolution; xiahai or “going into the sea” when state employees left their secure posts to jump into the ocean of private business in the early 1990s; and then xiagang. Xiagang is a critical social issue that came about at a critical

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time for China, tied to the accelerated pace of marketization, privatization, and especially globalization of the Chinese economy, much of it tied to the lead up to China’s entry into the World Trade Organization in December 2001. Sorting out the situation and disposition of the working class at this key turning point in Chinese reform is an obviously important task. As one of the first and most comprehensive books in English on the subject, we believe our contribution is both timely and, we hope, reasonably authoritative. Our contributors have provided a sumptuous feast of data and stories from across China, emphasizing the diversity of what is too often thought of as a monolithic, top–down society. They highlight the diversity of location, between and within occupations, cohorts, and time period. Of course, nothing in the study of China remains authoritative for very long. Even as we have revised this manuscript for publication, changes in the structure of social welfare and the rise of a new system of urban social control—the “community” (shequ)—have overtaken our analyses. Still, understanding how Chinese work unit socialism unraveled between about 1998 and 2008 gives us a firm basis for analyzing whatever is to come in the years ahead.

Notes 1. William Hurst, “Understanding Contentious Collective Action by Chinese Laid-off Workers: The Importance of Regional Political Economy,” Studies in Comparative International Development, 39: 2 (Summer 2004), pp. 94–120. 2. Mark W. Frazier, The Making of the Chinese Industrial Workplace: State, Revolution, and Labor Management (Cambridge: Cambridge University Press, 2002), pp. 217–218. 3. For more detail on the evolution of the system and its shortcomings, see William Hurst, The Chinese Worker after Socialism (Cambridge: Cambridge University Press, 2009), chapter 3. 4. For overviews of this policy, see Hong Yung Lee, “Xiagang: The Chinese Style of Laying Off Workers” Asian Survey, 40: 6 (November–December 2000), pp. 914–937; and Linda Wong and Kinglun Ngok, “Social Policy between Plan and Market: Xiagang (Off-duty Employment) and the Policy of the Re-employment Service Centres in China,” Social Policy and Administration, 40: 2 (April 2006), pp. 158–173. For a more general review of social policy up through 2000, see Julia Kwong and Yulin Qui, “China’s Social Security Reforms under Market Socialism,” Public Administration Quarterly, 27: 1/2 (Spring/Summer 2003), pp. 188–209. 5. Renkou he Shehui Keji Si [Population and Social Technology Department], “Xiagang ji Xiagang Tongji Yanjiu” [Xiagang and Xiagang Statistics Research] Tongji Yanjiu, no. 3 (1999), p. 22.

Introduction

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6. Feng Chen, “The Re-Employment Project in Shanghai: Institutional Workings and Consequences for Workers,” China Information, 14: 2 (2000), pp. 169– 193, 174–176; Wong and Ngok, “Social Policy,” pp. 164–166. 7. CCP Central Committee and State Council, “Zhonggong Zhongyang, Guowuyuan Guanyu Chushi Zuohao Guoyou Qiye Xiagang Zhigong Jiben Shenghuo Baozhang he Zai Jiuye Gongzuo de Tongzhi” [Notice of the CCP Central Committee and State Council on Starting the Work of Basic Livelihood Protection and Reemployment for Laid-off SOE Workers], reprinted in Xin Shiqi Laodong he Shehui Baozhang, pp. 318–327; Feng Chen, “The Re-Employment Project, pp. 169–193; Dorothy J. Solinger, “Path Dependency in the Transition to Unemployment and the Foundation of a Safety Net in China,” Paper presented at the ninety-ninth Annual Meeting of the American Political Science Association, Philadelphia, August 2003, pp. 12–13. 8. Chen, “The Re-employment Project”; Edward X. Gu, “From Permanent Employment to Massive Lay-offs: The Political Economy of ‘Transitional Unemployment’ in Urban China (1993–8),” Economy and Society, 28: 2 (May 1999), pp. 281–299; Wang Chengying, Zhongguo Zai Jiuye [China’s Re-employment] (Chengdu: Sichuan Renmin Chubanshe, 1998); Yang Yumin, Wang Ping, and Guo Lei, “ ‘Jiu Wu’ Guoyou Qiye Gaige Huigu yu Sikao” [A Look Back and Some Thoughts on SOE Reform During the 9th Five Year Plan], Jingji Yaocan, no. 32 (2001), pp. 27–28. 9. Renkou he Shehui Keji Si, p. 23. 10. Guowuyuan Bangongting “Guowuyuan Bangongting Guanyu Xiagang Shiye Renyuan Congshi Geti Jingying Youguan Shoufei Youhui Zhengce de Tongzhi” [Notice of the State Council General Office Concerning Preferential Fee Collection Policies for Xiagang and Unemployed Personnel going into Business as Entrepreneurs], Document Number 57 (2002) of the State Council General Office, October 27, 2002. 11. See Russell Smyth and Zhai Qingguo, “Economic Restructuring in China’s Large and Medium-Sized State-Owned Enterprises: Evidence from Liaoning,” Journal of Contemporary China, 34: 12 (2003), pp. 196–197; Robert P. Weller and Li Jiansheng, “From State-Owned Enterprise to Joint Venture: A Case Study of the Crisis in Urban Social Services,” The China Journal, no. 43 (January 2000), p. 87. 12. Guowuyuan Bangongting [State Council General Office] “Guowuyuan Bangongting Guanyu Jinyibu Jiaqiang Chengshi Jumin Zuidi Di Shenghuo Baozhang Gongzuo de Tongzhi” [State Council General Office Notice Concerning the Strengthening of Work on Provision of Basic Livelihood Security to Urban Residents], document number 87 in the 2001 series Guowuyuan Bangongting WenJian [Documents of the State Council General Office], November 20, 2001. 13. Science and Technology Daily, March 3, 1999. 14. See Cai Fang et al., “Chengshi Shiye yu Xiagang” (Urban Unemployment and Layoffs), in Cai ed. Renkou yu Laodong Lupi Shu (Beijing: Shehui Kexue Wenxian Chubanshe, 2002), pp. 180–206; Ou Wenquan, “Woguo Shiye Xiagang Wenti de Chengyin ji Duice” (Contributing Factors and Policy

12

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Responses to the Problems of Unemployment and Lay-offs in Our Country), Jihua yu Shichang Tansuo, no. 4 (2003), pp. 59–60; Fan Maoyong, “Dui Gaijin Zhongguo Shiye Tongji Fangfa de Tantao” (Inquiry into Improving Chinese Unemployment Statistical Methods), Tongji Yanjiu, no. 6 (2001), pp. 19–23; Hong Qiao, “10 Chengshi Qiye Xiagang Zhigong he Li Tuixiu Renyuan Jiben Zhuangkuang de Chouyang Diaocha” (Sample Survey of the Basic Situation of Laid-off Workers and Retired Persons from Enterprises in 10 Cities), Zhongguo Laodong, no. 12 (2000), pp. 51–53. 15. See Li Peilin and Zhang Yi, “An Analysis of the Social Costs of State-owned Enterprises: Results of a Survey of 508 Enterprises in Ten Large Cities,” Social Sciences in China, XXII: 2 (2001), pp. 25–37; Yu Fawu, “Xiagang Zhigong Laodong Guanxi Wenti Toushi: Ruhe Jiejue Xiagang Zhigong Chu Zaijiuye Fuwu Zhongxin de Wenti” (Perspectives on the Problems of Labor Relations of Laid-off Workers: How to Address the Problems Posed by Laid-off Workers Leaving the Reemployment Service Centers) (Beijing: Jingji Kexue Chubanshe, 2000); Hu Angang, numerous works; Chen Simin “Shiye yu Jiating Baoli” (Unemployment and Family Violence), Loudi Shizhuan Xuebao, no. 1 (2003); Han Jingxuan, Ma Li, and Zhang Wei, “Xian Jieduan Woguo Laodong Jiuye Cunzai de Wenti ji Xiangguan Duice” (Problems of Labor Employment and Related Policies in Our Country in the Current Period), Tongji Yanjiu, no. 7 (2001), pp. 47–51. 16. See Li Peilin and Zhang Yi, in this volume; Li Qiang, Hu Junsheng, and Hong Dayong, “Shiye Xiagang Wenti Duibi Yanjiu” (Comparative Research on the Problems of Unemployment and Layoffs) (Beijing: Qinghua Daxue Chubanshe, 2001); Yu Fawu, “Xiagang Zhigong Laodong Guanxi Wenti Toushi”; and Guo Jiyan and Wang Yongxi, “2001–2020 Nian Zhongguo Jiuye Zhanlüe Yanjiu” (2001–2020 Chinese Employment Strategy Research) (Beijing: Jingji Guanli Chubanshe, 2001).

Part 1 Class Politics

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Chapter 1 Broadening the Debate on Xiagang: Policy Origins and Parallels in History Lei Guang

Chinese politics has a tendency of throwing up neologisms at regular intervals that pique the interest of students of China and invite their scrutiny. Some, such as the terms danwei (work unit) or guanxi (connection), have received widespread attention and have passed into our regular vocabulary for understanding Chinese political economy and society today. Others, such as the word daiye (waiting-to-be-employed), seem to be receding into the past as transitional phraseologies invented by Chinese state authorities for ideological reasons. In the 1990s, the term xiagang was coined by Chinese officials to refer to a particular modality of laying off workers, especially state enterprise workers, in which the employer relieves the workers of their posts but continues to supply certain minimal benefits to them after they are laid-off. The government insists on a formal distinction between xiagang workers and the unemployed because the former are said to continue to receive housing subsidies, health-care benefits, reemployment help, and a monthly stipend directly from their previous employers rather than from government sources (i.e., unemployment compensation). Xiagang workers are therefore treated as a special category of laid-off workers who maintain a dependent nonemployment relationship with their former employers. In spite of the government’s insistence, however, a distinction between xiagang and unemployment is hardly worth making from the perspective of the workers because they suffer an almost irreversible loss of their jobs under either circumstance. Indeed, Chinese officials themselves view

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xiagang very much as a transitional mechanism to be eventually supplanted by a society-wide unemployment system not tied to individual enterprises. But as a policy, how did xiagang emerge in the late 1990s, and how was it linked to an evolving policy discourse of labor reform since the 1980s? Insofar as xiagang is about laying off urban workers in large numbers, how is it different from or similar to other episodes of workforce reduction in the history of the People’s Republic of China (PRC)? This chapter is devoted to answering these questions. In both state discourse and academic analysis of xiagang in China, there is a tendency to emphasize its historical boundedness and its uniqueness to the moment of enterprise reform in the late 1990s. After all, the term itself did not appear in any significant way in official government publications until the mid-1990s. Yet the central motifs of xiagang, that is, workforce reduction and enterprisebased assistance, have run through the PRC’s history since the 1950s. This chapter seeks to broaden our understanding of xiagang by first relating it to an evolving state discourse on labor surplus and consolidation during the reform, and then to even earlier incidences of large-scale dismissal of state enterprise workers in the 1960s. The significance of xiagang lies in its historical resonance with various labor reform measures in the 1980s and 1990s and with historical practices of mass layoffs in the pre-reform period. In the following, I will first chart the evolution of xiagang as a policy discourse during the reform. Here we may view xiagang as the culmination of a series of labor reform measures aimed at reinvigorating state enterprises since the 1980s. Yet there was an important change in the ideological underpinnings for such reforms after the mid-1990s. Then, I will turn to a comparison and contrast of xiagang in the 1990s with similarly largescale layoffs in the early 1960s. The comparison of the 1960s serves to bring out both the continuities of workforce reduction in the PRC’s history and some of the distinctive features in the administration of xiagang in the 1990s. Finally, I will conclude with three observations regarding the significance of xiagang that follow from the preceding analysis.

From Surplus Workers to Xiagang: A Discursive History Why was the Chinese government interested in creating such a new category of xiagang workers in the late 1990s and spotlighting the small difference in the modes of public assistance supplied to them (enterprise- versus government-based) in contrast to the general unemployed population? One can think of at least two plausible explanations. One explanation

Broadening the Debate on XIAGANG

17

treats xiagang as a grand rationalization by the Chinese state for layoffs. Because xiagang literally means “off-duty” within an enterprise, this explanation goes, it can be used by the state as a euphemism to conceal the harsh reality of unemployment. Just as the word daiye was coined in the 1980s to cover up youth unemployment, so also the new term xiagang was created in the mid-1990s to disguise the extent of the country’s mounting problem of joblessness. Since the long-standing Chinese expression for unemployment is shiye, maintaining a distinction between xiagang and shiye allows the government to enumerate the two groups of laid-off workers separately in official statistics. Combining the two would have pushed up China’s official “unemployment rate” to a level unacceptable for even the country’s most ardent market reformers. However, this explanation would have been much more forceful had it been made before 1994, when the very concept of unemployment, or shiye in Chinese, was not yet accepted as part of “normal” official discourse.1 But the rationale for avoiding the term shiye in the late 1990s was not as compelling as it was in the early stages of reform. In much of the 1980s and even early 1990s the word shiye or unemployment was used primarily in reference to international affairs, not the domestic situation. Take as an example the number of articles in the official Chinese newspaper Renmin Ribao. In the past, most, and often times all, of the articles that contained the word shiye in one year were about other countries. But that changed after 1994. By 2002, more articles in Renmin Ribao referred to the domestic rather than the international unemployment situation (figure 1.1).2 Indeed, in recent years we find that Chinese officials are more and more willing to employ the two terms—shiye and xiagang—in the same text or interchangeably. Figure 1.2 is based on a keyword search of both terms in the official Chinese newspaper Renmin Ribao from 1978 to 2003. It shows that Chinese officials, or the official media at least, began to associate the two more and more closely after 1995, so much so that the two terms became a conjoint or single phrase in hundreds of media reports in 2002 and 2003 (see figure 1.2). Another explanation concerns deploying the term xiagang as a strategy for dividing the Chinese working class. According to this view, government officials use the term to proliferate new social categories in order to stratify the ranks of laid-off workers and thwart unified action by them.3 As Solinger has pointed out, xiagang was only one of a plethora of terms used by the government during the reform era to refer to the practice of discharging state enterprise workers; other related terms included “internal transfers” (fenliu), “early retirees” (zaotui), “internal retirees” (neitui), “furloughed workers” (fang changjia), and the most colorful of all, “clean breakers” (liang bu zhao).4

Reportings on unemployment in China

Reportings on unemployment abroad

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Source: People’s Daily (electronic version): 1978–2002.

Figure 1.1 The number of reportings on unemployment (shiye) problems in China and abroad.

0

100

200

300

400

500

600

Shiye and xiagang used in the same text

Shiye and xiagang used as one phrase

78 979 980 981 982 983 984 985 986 987 988 989 990 991 992 993 994 995 996 997 998 999 000 001 002 003 19 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 1

Source: People’s Daily (electronic version): 1978–2002.

Figure 1.2 Number of articles that use shiye and xiagang in the same text or as one single phrase.

0

50

100

150

200

250

300

350

400

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Lei Guang

There is much truth to the observation that the Chinese state has long maneuvered to create divisions among workers, yet this explanation is somewhat less convincing when applied to the specific case of xiagang in the late 1990s. This is because, chronologically, xiagang emerged after all the other terms had already proliferated and its emergence may have had the effect of unifying rather than disorganizing different types of laid-off workers after the mid-1990s. Ultimately, both explanations treat xiagang as a uniquely 1990s’ phenomenon and fail to analyze its emergence in light of the continuities and changes compared to previous labor reform policies. While acknowledging the effect of xiagang in rationalizing layoffs and stratifying workers, I would like to look at it as a policy that harkens back to the discourse about “surplus workers” in the 1980s. Xiagang did not emerge out of a vacuum. It has a history that links it with repeated state attempts to downsize state enterprises in the past. Its emergence in the second half of the 1990s is an implicit acknowledgment by the Chinese state that previous labor reform measures had largely failed and so a “new” direction needed to be taken. In this context xiagang may be regarded as one more attempt by the Chinese state to regain control over the process of labor reduction and enterprise reform. To put a positive spin on the situation, labor officials presented it as a pro-active policy aimed at remedying the structural defects of the state enterprise system. To coin a neologism is also to create a new public policy under a new ideological justification. For more than a decade before the mid-1990s labor officials had tried to tinker with the old employment system in the name of improving labor “productivity,” but they had always tried to contain the “problem” inside state enterprises and to be selective about the kind of workers they dismissed and to limit their numbers at any one time. After the mid-1990s a decisive ideological shift in favor of the market economy emboldened labor officials to venture one step closer toward establishing a completely market-based employment system. The legitimation of the market furnished state managers with new justifications for laying off workers, such as requirements for labor flexibility and cost efficiency. It further created a permissive environment for large-scale layoffs. The central government, however, was not yet ready in the late 1990s to grant enterprise managers carte blanche to dismiss workers as they wished because of the huge ramifications of such layoffs for social stability. Neither was it ready to shoulder the financial burden alone. These considerations necessitated a half step in the direction of instituting a radically free-market system of unemployment. Xiagang thus emerged as a concoction that contained new ideological ingredients (i.e., market-based justification for laying off workers) and old labor reform practices (e.g., state intervention and

Broadening the Debate on XIAGANG

21

enterprise-based assistance). It made it possible for the government to channel its limited resources to the welfare needs of a designated group of workers rather than to spread it among the general unemployed population. Above all, it allowed the state to retain control over the layoff process. As a policy term, xiagang made its first official debut in government documents and statistical yearbooks in 1995, but its informal usage went as far back as 1982 when the People’s Daily first employed the term in describing retired engineers relieved of their old posts.5 As it came to be used in the 1990s, the term applied to those workers who were dismissed from their posts, but continued to receive subsidy wages or other kinds of financial assistance (e.g., continued contributions to their pensions) from their original employers.6 Following a national conference on enterprise reform and reemployment in 1998, the central government focused on xiagang workers from state enterprises, so laid-off workers from collective or other types of enterprises were essentially excluded from the xiagang classification.7 The policy of xiagang thus reproduces the differences in income and status among different types of enterprises and their workers.8 All laid-off workers are not created equal, just as they were not when they were employed. Figure 1.3 chronicles a series of labor reform policies and practices leading up to the emergence of xiagang in the mid-1990s. It all started in 1982 when China commenced its first round of labor consolidation, known as “labor re-organization” (laodong zuzhi zhengdun). One main objective of the 1982 reform was to boost labor productivity in state enterprises by reducing the number of fuyu renyuan or surplus workers.9 Throughout the 1980s the dominant idiom of reference was about such surplus workers that were produced by successive rounds of labor reform. Central government statistics did not record the number of surplus workers until several years later in 1989, but one Chinese analyst estimated the number of surplus workers to be over ten million in 1983, about 10 percent of the total number of state enterprise staff and workers at the time.10 One must remember that this figure reflected only a limited number of participating enterprises. From 1982 to 1985, provincial labor gazetteers reported widespread government estimation of the number of surplus workers and attempts to bring the number down in targeted enterprises. By 1985 labor officials all over China freely declared as redundant a portion of state enterprise workers in their provinces. The actual proportion of workers who were relieved of their posts ranged from an estimated 5.3 percent for Hubei on the lower end to 8.8 percent for Anhui on the higher end.11 One national estimate, based on reports by enterprises from ten provinces and five ministries, reported a reduction of their workforce by 4.4 percent in 1984. Consequently, the proportion of frontline workers in

Fuyu zhigong first appears in official media

1982

1987–91

Labor optimization

Fuyu zhigong first appears in official statistics

1986

Labor contract system

Figure 1.3 Evolution of the xiagang policy.

Policy evolution

Labor reorganization starts

Xiagang in official statistics & documents

1994–95

Reemployment program debuts

1993–1994

Shiye adopted as legitimate

1992

End of fixed labor

1998

Mass xiagang occurs

Labor law

Broadening the Debate on XIAGANG

23

these enterprises was reported to have increased from about 55.4 to 59.9 percent in the same year.12 Relatively few surplus workers were actually pushed out of their enterprises in the 1980s. Most were reassigned to new posts in other units and kept on the enterprise payroll, if not on the roster of active workers. Temporary and “out-of-plan” workers were affected the most as they were often the first ones who were actually dismissed and pushed out of the enterprises. But state managers made a special effort to protect permanent workers. When some of these permanent workers were declared redundant, they were reshuffled to some other posts or units, or assigned to enterprise-run labor service companies. As a consequence the first round of labor consolidation in the 1980s did not lead to a significant reduction of the state enterprise workforce; it led mostly to a reshuffling of workers within the same enterprise. Some labor officials openly lamented about how little they had accomplished in terms of reducing the number of surplus workers. Here is how Beijing labor officials viewed the situation: the surplus workers were hard to deal with. They could not be laid off. The most one could do was not to register them as the formal employees of the enterprise, or to remove them temporarily from their original posts and assign them to service jobs in such areas as waste recycling and re-processing, sanitation and enterprise beautification, or logistics. [But] they still needed re-assignment afterwards. Over-staffing would remain a problem in the long run.13

Nevertheless, after the first round of labor reform in the early 1980s, the idea of surplus workers was successfully planted in the minds of state managers and ordinary workers. It became the central discourse around which subsequent labor reforms were organized in the 1980s and early 1990s. After the introduction of the labor contract system in 1986, state officials began to pursue a more aggressive approach to reducing the number of surplus workers in state enterprises. They implemented the program of “labor optimization” (laodong youhua zuhe) from 1987 to 1992, whereby workers were made to bid for the posts they once occupied in the enterprises.14 The officials hoped to bring competition into the internal labor allocation process, perhaps as the first step in the reform of the larger administrative system of labor allocation. Predictably, more surplus workers were generated through this kind of internal competition. Workers who were idled in the bidding process were relieved of their duties and released into a growing pool of surplus workers still kept by the work units. What was most significant about the labor optimization program was that it was

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directed mainly at permanent workers (guding gong), including those who started working before the introduction of the labor contract system. Chinese labor officials estimated that a majority of state enterprises were overstaffed by about 15–20 percent in 1988.15 In 1989, 43,825 state enterprises carried out labor optimization, generating 948,379 “surplus workers,” averaging twenty-two per enterprise and totaling about 6 percent of the pre-optimization labor force for these enterprises. Out of those surplus workers over 82 percent were assigned to new positions, mostly in the tertiary sector. About 11 percent were idled inside the enterprises or underwent training while another 7 percent were laid off or retired early.16 Many more workers were thus relieved of their duties than were laid off by the enterprises. Take Beijing as an example. The municipal government set an upper limit of layoffs at about 1 percent of the total workforce but mandated a 10 percent reduction in the number of regular workers in the city’s state enterprises in 1988.17 As a result, the number of idled or off-duty workers began to accumulate and grow inside the enterprises in the late 1980s and early 1990s. They were treated as the “internal unemployed” (changnei daiye) or “non-assigned” (wei anzhi) workers, most of whom were still paid a base salary or stipend and continued to receive benefits provided by their employers.18 These internal-unemployed or non-assigned workers were the predecessors of the xiagang workers who were going to be labeled as such in official discourse in the second half of the 1990s. “Labor optimization” was temporarily halted in some places in 1989– 1990 due to domestic political instability, but labor reform resumed at an accelerated pace soon afterward. By the mid-1990s the Chinese state had retreated from the front lines of hiring and firing and limited its activities for the most part to allocating leaner resources to job-training programs, job introduction agencies, and unemployment insurance, leaving enterprise managers more power to make their own decisions about layoffs. This was brought about by a flurry of legislative and programmatic activities the state embarked upon in the early 1990s in preparation for the eventualities of mass layoffs. From 1992 to 1994, the state brought all workers in the state sector under the labor contract system (1992), stopped issuing labor planning quotas to state enterprises (1993), debuted national “reemployment” programs in anticipation of large layoffs (1993–1994), and passed a comprehensive labor law (1994) that gave enterprises autonomy on personnel matters. The result, as table 1.1 shows, is a steady increase in the number of surplus and xiagang workers in the 1990s. Measured against the benchmark figure of non-assigned surplus workers in 1994, the jump in the number of xiagang workers in 1995 is especially striking (see table 1.1).

Broadening the Debate on XIAGANG Table 1.1 2000

25

Year-end surplus and xiagang workers in state-owned units, 1990–

Year

Surplus workers

1990 1991 1992 1993 1994

172,526 105,052 380,597 543,666 1,202,238

Non-assigned workers 36,076 29,257 103,556 190,738 561,605

1995 1996 1997 1998 1999 2000

4,313,808 6,592,918 12,741,517 12,540,590 12,102,509 10,979,574

Xiagang workers 3,683,824 5,419,636 6,343,060 5,947,907 6,525,157 6,571,845

Notes: 1. Surplus workers: year-end fuyu workers for 1990–1996, total number of xiagang fenliu workers for 1997, non-assigned xiagang workers from previous year, plus newly added xiagang workers for the year of reporting in 1998–2000. 2. Non-assigned workers: surplus workers who were not assigned to new posts (wei anzhi) from 1990 to 1994; Xiagang workers: year-end xiagang workers from 1995 to 2000. These statistics are partial and do not represent the full extent of the situation with the surplus workers and layoffs in China in the 1990s. The official statistics here pertain to the state enterprises, and among them, to the participating units in the government’s labor optimization or xiagang programs. Though the number of participating units did increase appreciably over time, the numbers reported here do not present a full picture of the employment situation. Source: Data are from the State Statistical Bureau, Chinese Labor Statistics Yearbook (1991–2001 issues), Zhongguo tongji chubanshe.

But the change from surplus to xiagang worker designation in 1995 was not merely a quantitative increase in the number of workers affected. It signaled a major shift in the ideological context within which the two terms derived their meaning. Whereas the discourse of surplus workers was still embedded in an ideology of planning in which a presumed optimal level of staffing was determined by the labor officials in relation to key planning indices, xiagang was now regarded as largely driven by external market forces. It helps to bring out the discursive shift from “surplus worker” in the 1980s to xiagang worker in the 1990s if we contrast the ways in which labor officials and state managers arrived at their surplus or xiagang figures and treated the workers falling under each classification. First, I will discuss

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surplus workers. An endemic feature of the socialist economy, as famously portrayed by Janos Kornai, was the soft budget constraint that led to the hoarding of labor by enterprise managers. The way labor planners dealt with this problem historically was by conducting periodic campaigns to reduce workers and by issuing labor allocation quotas for enterprise managers. In the case of China, labor officials had conducted frequent campaigns to reduce the size of the industrial workforce since the 1950s. In the 1980s, they attempted to routinize their control over employment in the state sector by requiring managers to adhere to the two standards of labor productivity (laodong shengchanlü) and fixed labor allotment (dingyuan). Labor productivity, usually measured in terms of the output per unit of labor, was used by labor officials to gauge the degree of labor utilization in an enterprise.19 Fixed labor allotment or dingyuan was about establishing a level of staffing based on calculations of productivity and planned outputs. 20 The notion of surplus workers emerged out of a discourse about improving labor productivity and adhering to fixed labor quotas handed down from the labor bureaus. It referred to those workers who were kept by the enterprises above an acceptable baseline of staffing determined by state labor officials. Surplus workers were believed to be a widespread phenomenon inflicting almost all state enterprises, and their numbers were determined by planning standards rather than the enterprises’ financial condition. It is important to note in this context that the notion of surplus workers was broached with the understanding that the “socialist” enterprise—with guarantees of employment and welfare—would remain largely intact. Indeed, state enterprises were expected to resort to a variety of measures, including developing new service-sector businesses and practicing inter-unit transfer, so as to keep most of the so-called surplus workers employed.21 The ideological context within which the discourse of xiagang arose was rather different. Although the term was used haphazardly in the 1980s, it was not until the mid-1990s that it came to designate a systematic approach to laying off state enterprise workers. By then, the Chinese Communist Party had formalized its commitment to building a market economy.22 In the labor field, officials had stopped issuing employment quotas or productivity targets. Instead their attention shifted to privatizing small and medium-sized state enterprises and to building a “modern enterprise system” modeled on the capitalist corporation. Even though some of the bestperforming enterprises laid-off workers for the ostensible reason of furthering their market competitiveness, the need for xiagang was often attributed to the economic hardship faced by enterprises rather than to any extraneous planning criterion.23 Official reports claimed that state enterprises in financial trouble accounted for the majority of registered xiagang workers from 1998 to 2000.

Broadening the Debate on XIAGANG

27

Thus in the 1990s, the discursive framing of xiagang had shifted from an earlier emphasis on the “fixed labor allotment” to arguments about the economic reality faced by state enterprises. Chinese officials now believed that the market imperatives of efficiency and profitability trumped the old socialist guarantee of employment and welfare for workers. As one Party theoretician put it: “we once thought in the past that xiagang and unemployment should not happen under socialism. But practice has shown that some degree of xiagang and unemployment . . . is a normal phenomenon necessary for the functioning of the economy.”24 There was little emphasis in the new discourse of xiagang on employment guarantees within the historical social contract that had once existed between the state and formal sector industrial workers. For sure, state officials continued to tout the importance of reemployment for xiagang workers, but this new discourse began to center round “basic livelihood guarantees” instead of employment in the late 1990s. A popular slogan in Shanghai—“heartless xiagang, compassionately handled”25 —captures the seemingly contradictory sides of a state that had turned toward “inhumane” market logic (in laying off large numbers of workers) on the one hand and to a language of compassionate assistance (in providing for the subsistence of xiagang workers) on the other. It bears noting, however, that the state treasury only had to cover one-third of the expenses needed to support laid-off workers under the xiagang formula, the other two-thirds being provided by the enterprises themselves and from such societal sources as the social insurance scheme. So as it turned out, the compassionate xiagang policy was much less costly for the state than a wholesale layoff of these same workers. Besides, by binding enterprise and societal actors to its xiagang project, the state extended its reach into society while harnessing society’s resources. All this made sure that mass layoffs would not generate major social upheavals.

Xiagang as Laying Off Workers: A Comparison of 1961–1963 and 1998–2000 As shown in table 1.1 earlier, the number of registered xiagang workers increased sharply after 1995. Reflecting this dramatic change, the number of articles in the People’s Daily referencing xiagang increased from 39 in 1994 to 1460 in 1998, at the peak. But as Solinger has noted, these official statistics almost certainly underreported the actual number of laid-off workers in the country in the 1990s.26 Mass dismissal of workers of the xiagang kind was rare but not unprecedented in the PRC’s history. Conventionally we have the image of a stable

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system of secure employment in China before the 1980s because we tend to focus on urban permanent workers. If we broaden our view to include the temporary, out-of-plan, or other kinds of contract workers, especially peasant workers, however, we find that China’s urban workplace had always been a very dynamic institution even before reform. The island of stability for core permanent workers was preserved by the constant shifting of other types of workers in and out of the urban workplace. Figure 1.4 presents data on major incidences of workforce reduction in China from 1957 to 1990 as they were recorded in provincial labor gazettes. The data is coded from twenty labor gazettes published by as many provinces, provincial-level cities, and autonomous regions during the period of 1991 and 2002. These gazettes contain statistical data and narrative texts on a wide range of labor-related topics for the provinces, including employment policies, labor management, job training, wages, labor insurance and protection, labor disputes, administration, and so on. The period covered is usually from or before 1949 to about 1990. The quality of the gazettes varies greatly from province to province. The gazettes of Inner Mongolia and Hubei were excluded from this study because of the scarcity of information they contained on our subject of discussion. I must also note that a variety of Chinese terms were used to describe the practice of workforce reduction before the 1990s. These include “ jing jian” (reduction), “qing li” (cleansing out), “qing tui” (purging and sending back), “ya suo” (contracting), or, as in the case of peasant workers, “qian song” (sending back) and “qian fan” (repatriation). A score of zero or one was assigned to each province for a given year, depending on if there was no (coded as zero) or at least one reported incidence (coded as one) of workforce reduction under the aforementioned names. Adding up the scores for all twenty provinces would yield scores ranging from zero (i.e., no province reported workforce reduction for the year) to twenty (i.e., all provinces reported reduction for the year) for any given year. A special notation was also made to indicate the reported incidences where the number of dismissed workers was given (the numbers themselves are not shown here). The result as given in figure 1.4 shows frequent episodes of workforce reduction in the PRC’s history. Hardly a year went by between 1957 and 1990 without one province or another reporting a major incidence of a government-coordinated campaign to dismiss workers. The absence of such a record for 1967 and 1976 may be due to the breakdown of labor authorities in these two years rather than to any deliberate policy to halt the reductions.27 The frequency of workforce reduction peaked in three periods with more than half of the provinces or cities reporting it: the late 1950s and early 1960s, the early 1970s, and the early years of reform. In

Number of provinces reporting workforce reduction

(n = 20)

Reported reduction with specific figures

Mentioned incidents of reduction

Sources: Labor gazetteers from the following provinces/regions/cities: Anhui (1997), Beijing (1999), Fujian (1998), Guangxi (1996), Guizhou (1994), Hebei (1995), Heilongjiang (1995), Henan (1991), Hunan (1998), Jiangsu (2000), Jilin (1998), Qinghai (2001), Shaanxi (1994), Shandong (1993), Shanghai (1998), Shanxi (1999), Sichuan (2000), Xinjiang (1996), and Yunnan (1993). Guangdong data were coded from Guangzhou municipal labor gazetteer (1999) since the provincial version has not been published as of the writing of this chapter.

Figure 1.4 Incidents of workforce reduction in China, 1957–1990.

0

2

4

6

8

10

12

14

16

18

20

19 5 7 19 5 8 19 5 9 19 60 19 61 19 62 19 63 19 64 19 65 19 66 19 67 19 68 19 69 19 70 19 71 19 72 19 73 19 74 19 75 19 76 19 77 19 78 19 79 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90

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particular, all twenty provincial units recorded cases of workforce reduction in 1961 and 1962. The number of workers affected by the reduction can be astonishingly high in some years. The early 1960s was one such period where proportionally more workers were dismissed by state enterprises than those who were classified as xiagang in the 1990s. In two and a half years between 1961 and 1963, a total of 19.4 million urban workers (38.4 percent of urban state enterprise workers) were forced to give up their jobs. The state sent most of these workers to the countryside, believing that they would be less prone to starvation. Then in 1973, the state dismissed a total of 1.7 million workers, or slightly over 3 percent of state sector employees.28 The 1973 episode is worth noting because we owe our image of the “iron rice bowl” to this period when workers’ entitlement to their jobs was most secure. As we have seen in the previous section, the Chinese state’s attempt to consolidate labor and reduce the number of so-called surplus workers continued unabated after the reform. From 1998 to 2000, China’s state enterprises dismissed 20.3 million workers under the label of xiagang, compared to 19.4 million under various names of workforce reduction during 1961–1963.29 So the periods of 1961–1963 and 1998–2000 are comparable in terms of the aggregate size of mass layoffs at the national level. To demonstrate the broad comparability in the magnitude of layoffs during the two periods, I picked eleven provincial capital cities, including Beijing and Shanghai, for a close-up comparison. These cities were also chosen because of the availability of information and because of the variations in their sizes and geographical location. The data for the 1960s was gleaned from municipal labor gazettes while that for the 1990s was taken from official employment statistics in the state sector. Figure 1.5 presents the data for the eleven cities for the periods of the early 1960s and the late 1990s. We can see that these cities sustained comparable levels of workforce reduction during these two periods. Five cities experienced greater reductions in the 1960s than in the 1990s while six showed otherwise. Overall, city-to-city variations were smaller in the 1960s than they were in the 1990s. This is probably due to the fact that the central authorities applied heavier and more uniform pressure on enterprises in the 1960s than in the 1990s. The cities that experienced the highest level of reduction in 1961–1963 also registered the sharpest decline in state sector employment in the late 1990s. Though separated by several decades, there are some broad continuities in the way that the Chinese state carried out workforce reduction during these two periods. In both periods labor officials worked with state managers to formulate the layoff policy and decided on the target numbers before

Broadening the Debate on XIAGANG 1,200,000

31

(n = 11)

1,000,000 800,000 600,000 400,000 200,000

zh o C he u ng du La nz ho Zh u en gz ho u Ji na n N an jin g H ar bi n Sh en ya ng Be ijin g Sh an gh ai

G

ua

ng

W uh

an

0

1961–63

Figure 1.5 2000.

1998–2000

Workforce reduction in select cities in China: 1961–1963 and 1998–

Sources: Same as for figure 1.4.

the latter were allowed to proceed with the reduction. The state retained ultimate control over the entire process. In the 1960s, state officials handed down target numbers for individual units to fulfill; in the 1990s, enterprises had to apply for xiagang quotas before they were allowed to lay off any workers.30 In both cases, the state created an administrative matrix to distinguish one type of worker from another, such that there was a proliferation of categories of workers with varied entitlement to government assistance. In the 1960s, the state distinguished between workers according to when they joined the urban labor force (e.g., before or after 1958), whether they had temporary or permanent status, or if they had come from the countryside or cities.31 In the 1990s, xiagang workers were disaggregated into multiple discrete categories based on age, education and skill levels, and so on, and were subjected to differential treatment according to state policy.32 In the 1960s, as in the 1990s, there was a shift of emphasis away from generating employment for laid-off workers toward guaranteeing their livelihood. Most workers who were dismissed from urban jobs in the 1960s were dumped in the countryside with minimum assistance for getting them settled in rural areas. Civil affairs agencies were instructed to take care of the chronically ill and senior workers (i.e., those who started working before 1949), but much of the burden of providing food grain and welfare to these workers was thrust upon the rural communes.33 In the late

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1990s, as I have noted in the previous section, state authorities again emphasized livelihood over employment guarantees and distributed the burden of caring for these workers among the enterprises, government agencies, and social security institutions. In spite of such continuities, marked differences existed between the 1960s’ episode of urban layoffs and episodes in the 1990s. The massive urban workforce reduction in the 1960s occurred in the wake of the largest famine in the PRC’s history, whereas the layoffs in the 1990s coincided with a booming Chinese economy and rising prosperity among urban residents. The 1960s’ layoffs were across the board and affected almost all urban work units, including government organs, whereas the 1990s’ xiagang project was mainly pushed in state enterprises undergoing restructuring. In the 1960s, most of the urban laid-off workers were sent to the countryside, whereas the strategy in the 1990s was to keep the xiagang workers in the cities. A stark contrast existed between the 1960s and the 1990s in the kind of workers that were laid off during these two periods. In the 1960s recently migrated rural workers in the cities bore the brunt of the state’s workforce reduction campaign in the beginning, and workers of urban origins were affected only in the later stages when the government ran out of rural workers for repatriation. For example, thirteen out of the over nineteen million downsized workers, most of whom had recently come from rural areas, were sent back to the countryside in 1961–1963.34 The 1960s’ layoffs also followed a seniority system so that they targeted recently recruited young workers (with a large number of them still at the apprentice stage) and even some frontline workers if they had just recently started working.35 The state was more worried about getting these workers out of the cities than about preserving the competitive core of the workforce. Across-theboard reduction meant that enterprises in both good and bad standing were urged to shed workers. In the late 1990s xiagang targeted vulnerable members of the onceprivileged urban workforce. The goal seemed to be to rid the state sector of female and more senior workers who were believed to be less skilled and less productive than younger male ones. As many researchers have noted, xiagang workers tended to come from an older age cohort (thirty-five and above), had a relatively low level of education, and were concentrated in particular sectors and industries such as the manufacturing sector and money-losing enterprises.36 Some rural migrant workers were still negatively affected by the xiagang campaign because they were forced to vacate their posts for the reemployment of urban laid-off workers.37 But what is different for xiagang was that it did not start or end with systematic repatriations of rural workers to the countryside.

Broadening the Debate on XIAGANG

33

Instead of viewing the countryside as a safety net for dismissed urban workers, the Chinese state tried to build an urban network of support in the 1990s. Minimum wages, unemployment insurance, and subsidies to xiagang workers were all aimed at building a system of livelihood guarantees for urban citizens. Given that minimal resources had been allocated, mostly for the purpose of staving off starvation and riots, the effectiveness of these government-orchestrated programs remain in question.38 But they point to a fundamental reorientation of the Chinese state that involved breaking the traditional social contract with the Chinese working class and ceding its authority over employment and work to market forces.

Conclusion This chapter seeks to provide a historical account of xiagang by linking it to conceptual points of origin in the early 1980s and to similar practices of large-scale dismissal of workers in the early 1960s. The first part of the chapter provides a discursive history of xiagang policies, emphasizing the dimension of ideological change that shapes our current understanding of the phenomenon. The second compares xiagang in the 1990s with the dismissal of workers in the 1960s, highlighting commonalities and differences in the practice of workforce reduction during these two periods. Three points emerge from the earlier analyses. First, xiagang was a deliberate policy that had evolved out of a series of labor reform measures going back to the 1980s. However, it was in many ways less the “proactive” policy the government had billed it as than it was a reaction to the outcomes of previous reforms. The starting point of xiagang was where previous state attempts at labor consolidation had left off. The official discourse on xiagang had alternated between describing it as a matter of necessity (as when officials warned about dire consequences for state enterprises without the xiagang program) and choice (as when they emphasized xiagang as a proactive policy).39 Just as such “choice” was constrained by the failure of past policies, the “necessity” must be understood not only in terms of larger economic forces, but also in terms of the legacies of past reform. Second, what made xiagang depart from previous policies was in the realm of the ideology that was invoked to justify the layoffs. Unlike in the 1980s, the layoff of workers from state enterprises in the 1990s was framed in terms of market imperatives and enterprise profitability. State enterprise managers now talked more like managers of a capitalist corporation. Labor officials switched their attention from employment to subsistence issues for laid-off workers. The new discourse of xiagang may well become the

34

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launching ground for the next, more radically market-oriented phase of labor reform. Finally, insofar as xiagang was about the dismissal of workers on a large scale, it was not peculiar to the 1990s in the PRC’s history. Many cities experienced an equal, if not greater, magnitude of workforce reduction in the 1960s. Previous episodes of workforce reduction have not attracted much scholarly attention because they affected mostly temporary or peasant workers rather than permanent urban workers. When we do broaden our view to include such groups, we find important continuities in the way that the state sought to manage the layoff process through administrative mobilization and taxonomic formulation. But we also find crucial differences between the two periods, especially in the demographic makeup of the workers targeted by state policies for layoffs.

Notes 1. The Chinese term for unemployment, shiye, was formally adopted by the government in 1994. It supplanted the word daiye, the official operative term till 1993, to describe the state of unemployment in China. For more, see Liu Yong, Disanci shiye gaofeng: xiagang, shiye, zaijiuye (The Third Unemployment Peak: Xiagang, Unemployment, Reemployment) (Beijing: Zhongguo shuji chubanshe, 1998). Unofficially Chinese labor experts started using the word shiye after 1991. Xia Jizhi, and Dang Xiaojie, eds, Zhongguo de jiuye yu shiye (China’s Employment and Unemployment) (Beijing: Zhongguo laodong chubanshe, 1991). As figure 1.1 suggests, the word was used in a very limited way in some reporting on the domestic situation in the 1980s. 2. Renmin Ribao (People’s Daily), electronic edition, 1978–2002. 3. Dorothy Solinger, “Why We Cannot Count the ‘Unemployed,’ ” The China Quarterly, no. 167 (September 2001), pp. 671–688. 4. The term “clean breaker” is my translation of the Chinese expression liang bu zhao, referring to the category of workers who are essentially forced to sever all relations with their employers, usually state enterprises, after they are given a one-time lump-sum payment calculated on the basis of length of employment. Another Chinese expression, maiduan gongling or “buy out,” refers to a similar practice whereby the employer is absolved of all responsibilities toward the laidoff workers with a one-time lump-sum payment. 5. Xiagang literally means “going off duty,” the opposite of shanggang, or going on duty. In the late 1970s and early 1980s, xiagang was used in an entirely different, rather militaristic, context describing the rotation of guards as sentry soldiers went on and off duty in their posts. It wasn’t till much later, in the late 1980s, when the term was adapted to refer to the workers who lost their posts in the internal reshuffling of positions under reform. Even then, the preferred

Broadening the Debate on XIAGANG

6.

7.

8. 9.

10.

11.

12. 13. 14.

15. 16. 17. 18. 19.

35

official term for such workers was fuyu renyuan or surplus workers throughout the 1980s and early 1990s. In the formal definition, only workers bound by still-unexpired contracts and working in state firms covered by the labor contract system could be xiagang. The category officially did not apply to millions of laid-off workers from the non-state enterprises or who lost jobs due to the termination of labor contracts. For an excellent discussion of this aspect of xiagang, see Solinger, “Why We Cannot Count.” Laodong he shehui baozhang bu, ed., Guoyouqiye xiagang zhigong jiben shenghuo baozhang he zaijiuye gongzuo huiyi wenjian huibian (Collected Documents of the State-Owned Enterprise Xiagang Worker Basic Living Allowance and Re-employment Working Committee) (Beijing: Zhongguo laodong chubanshe, 1998). Dorothy Solinger, “Labor Market Reform and the Plight of the Laid-off Proletariat,” The China Quarterly, no. 170 (June 2002), pp. 304–326. Chinese labor officials distinguished between “direct” and “non-direct” production personnel under the planned economy. The latter consisted of service and support workers as well as administrative personnel in an enterprise. The goal of the 1982–1985 consolidation was to return as many such workers to frontline production as possible, and to reduce the proportion of nonproduction personnel to under 18 percent of the entire workforce. Laodong bu laodongli guanli he jiuye si, ed. Anzhi fuyurenyuan zhengce fagui yu jingyan xuanbian (Anthology of Policies, Rules, Regulations, and Experiences [Related to] Finding Places for Surplus Personnel) (Beijing: Falü chubanshe, 1989). Anhui sheng difangzhi bianzuan weiyuanhui, ed., Anhui sheng zhi: laodong zhi (Anhui Provincial Gazeteer: Labor Gazeteer) (Hefei: Anhui renmin chubanshe, 1997), p. 15; Hubei sheng difangzhi bianzuan weiyuanhui, Hubei sheng zhi: jingji zonghe guanli (Hubei Provincial Gazeteer: Economic Comprehensive Management) (Wuhan: Hubei renmin Chubanshe, 2002), p. 29. Yuan, Lunqu, ed., Xin Zhongguo laodong jingji shi (The History of New China’s Labor Economics) (Beijing: Laodong renshi chubanshe, 1987). Beijing shi difangzhi bianzuan weiyuanhui, ed., Beijing zhi: laodong zhi (Beijing Gazeteer: Labor Gazeteer) (Beijing: Beijing chubanshe, 1999), p. 15. Laodong bu laodongli guanli he jiuye si, ed., Laodong youhua zuhe zhuanji (Labor Optimization Combined Collection) (Beijing: Falü chubanshe, 1998). Laodong bu laodongli guanli he jiuye si, ed., 1998. State Statistical Bureau, Zhongguo laodong gongzi tongji nianjian (Yearbook of China’s Labor Wage Statistics) (Beijing: Laodong renshi chubanshe, 1989). Beijing shi difangzhi bianzuan weiyuanhui, ed., 1999. Laodong bu laodongli guanli he jiuye si, ed., 1989. Chinese labor officials used measures of labor productivity to monitor the economic performance at all levels: aggregate, sectoral, and individual enterprises. At the most aggregate level, for example, labor productivity was

36

20.

21. 22.

23. 24. 25.

26. 27.

28. 29.

30.

31. 32.

Lei Guang measured simply by dividing a given year’s GDP by the number of employed workers. Such calculations were phased out as a planning concept by the late 1990s. Current statistical yearbooks no longer carry information on this onceimportant planning indicator. Although all state enterprises were required to establish a level of fixed labor allotment in the 1980s, only the largest of them, such as the Capital Steel Corporation, could “plan” in such a way due to the inherent complexity of calculating the dynamic labor needs for each and every position in an enterprise. See Yuan, Lunqu, ed., Xin Zhongguo laodong jingji shi (The History of New China’s Labor Economics) (Beijing: Laodong renshi chubanshe, 1987). Yuan, Zongwu, Guanyu woguo qiye laodong zhidu gaige (On the Reform of Our Country’s Enterprise Labor System). Renmin Ribao, August, 5, 1992. The fourteenth Party Congress in 1992 set the goal of establishing a socialist “market” economy for the first time. In the next year, the third plenary session of the fourteenth Party Congress further resolved to set up “labor markets” to speed up reform in the labor area. Laodong bu laodongli guanli he jiuye si, ed., 1998. Li, Zhongjie, “Weishenme shi ‘zhongda zhengzhi wenti’ ” (Why Is [It] an “Important Political Question?”). Renmin Ribao, June 11, 1998. Translated from the Chinese expression: xiagang wu qing, caozuo you qing, from Sun Chengshu, Chen Xueming, Gao Guoxi, and Liu Chenggong, eds., Qiji shi ruhe chuangzao chulai de: Guanyu Shanghai shi zaijiuye gongcheng de yanjiu baogao (How a Miracle is Created: A Research Report on Shanghai’s Reemployment Process) (Shanghai: Fudan daxue chubanshe, 1998). See Solinger, “Why We Cannot Count.” In 1967, national planning was discontinued due to the political paralysis caused by the Cultural Revolution. The Shandong Labor Gazetteer recorded that the provincial labor bureau was taken over by rebellious “mass organizations” and paralyzed. See Shandong difang shizhi bianzuan weiyuanhui, ed., Shandong sheng zhi: laodong zhi (Shandong Provincial Gazeteer: Labor Gazeteer) (Jinan: Shandong renmin chubanshe, 1993), vol. 77. The year 1976 also witnessed great political turmoil that experienced the deaths of Zhou Enlai and Mao Zedong, and the arrest of the Gang of Four. Yuan, Xin Zhongguo laodong jingji shi. The figure of 20.3 million is arrived at by summing up the numbers of the “newly added xiagang workers” for 1998, 1999, and 2000 reported in China’s labor statistical yearbooks. The category of newly added xiagang workers is used here as a proxy measure for the magnitude of workforce reduction. For example, state enterprises in Shenyang city applied to lay off sixty-two thousand workers in 1999, but the municipal government only approved thirty-four thousand xiagang workers. See Shenyang nianjian bianweihui, Shenyang nianjian (Shenyang Yearbook) (Beijing: Zhongguo tongji chubanshe. 2000). Also see Lee, Hong Yung, “Xiagang, The Chinese Style of Laying Off Workers,” Asian Survey, 40: 6 (November/December 2000), pp. 914–937. Yuan, Xin Zhongguo laodong jingji shi. Solinger, “Why We Cannot Count.”

Broadening the Debate on XIAGANG

37

33. See, e.g., Shaanxi sheng difangzhi bianzuan weiyuanhui, ed., Shaanxi sheng zhi: laodong zhi (Shaanxi Provincial Gazeteer: Labor Gazeteer) (Xi’an: Shaanxi renmin chubanshe, 1994), vol. 54. 34. The number of dismissed workers who were rusticated in 1961–1963 varied from place to place. According to one recent study, the proportion of rusticated urban workers to the number of total layoffs for a sample of provinces and cities was as follows: 43 percent for Harbin, 46 for Jilin province, 59 for Ningxia, and 80.3 Henan. See Li, Ruojian, Kunnan shiqi de jingjian zhigong yu xiafang chengzhen jumin (The Retrenched Workers and Sent-Down Residents of Cities and Towns during the Hard Times), Shehuixue yanjiu, no. 6, (2001), pp. 31–42. 35. Ibid. 36. Hu Angang, Cheng Yonghong, and Yang Yunxin, Kuoda jiuye yu tiaozhan shiye: Zhongguo jiuye zhengce pinggu, 1949–2001 (Expand Employment and Battle Unemployment: An Evaluation of China’s Employment Policy, 1949– 2001) (Beijing: Zhongguo laodong shehui baozhang chubanshe, 2000). 37. Li Qiang, Hu Junsheng, and Hong Dayong, Shiye xiagang wenti duibi yanjiu (A Contrasting Study of the Unemployment [and] Xiagang Problem) (Beijing: Qinghua daxue Chubanshe, 2001). 38. Dorothy Solinger, “Labor Market Reform and the Plight of the Laid-Off Proletariat,” China Quarterly 170 (2002), pp. 304–326; Tsui, Ming, “Managing Transition: Unemployment and Job Hunting in Urban China,” Pacific Affairs 75: 4 (Winter 2002–2003), pp. 515–534. 39. Laodong he shehui baozhang bu, ed., 1998.

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Chapter 2 Xiagang and the Geometry of Urban Political Patronage in China: Celebrated State (once-) Workers and State Chagrin Dorothy J. Solinger

The lore of the Chinese “laid-offs” fate is often piteous, sorry, to say the least.1 Yet despite the generally gloomy perspective, one feature of the policy of xiagang had a potentially more sunny aspect: this has to do with the Party elite’s bout of unease soon after visiting an onslaught of market capriciousness upon its old putative ally, the urban working class. Largescale laying off of labor may have finally (after two decades of irresolution) been envisaged as necessary for the forward march of the state and its industrial sway in the world. But it was quickly clear to the authors of the policy that this program wreaked havoc upon the lives of its immediate objects. Though cutbacks began as early as the late 1980s, for the most part these first firings were of personnel in smaller-scale, money-losing plants.2 The high tide of shedding from the medium- and larger-scale firms took off only with the September 1997 fifteenth Party Congress. At that meeting, Party general secretary Jiang Zemin put forward two pertinent injunctions: to “adjust and improve the ownership structure,” and to “accelerate the reform of state-owned enterprises.”3 These orders initiated separations of workers in massive proportions from firms of all sorts, a relentless letting go that went on undiminished for at least the following four years.

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The move to mobilize discharges was clearly motivated: as one account phrased it, the process was to have the positive functions of raising labor productivity, motivating activism, raising enterprises’ technical level, cutting wage costs, and “opening a new door for a more rational redeployment of labor resources.”4 China was at last fully determined to turn completely “modern” economically, which meant fitting its factories for competing efficiently, profitably, and competitively in the market beyond its borders. And forging fewer, leaner firms—ones employing smaller numbers of workers, the majority of whom were to be younger, better trained, and healthier—appeared to constitute a major step along that pathway. But after unleashing the market and its vagaries upon the state’s own ventures, the leadership quite rapidly stood aghast at what it had wrought. A hint of that discomfort was already in print by the end of the year. Just as the critical late-1997 Party convention was plunging the industrial cadres in the localities into a veritable frenzy of cashiering, an official newspaper revealed with some abashment, “dismissing and laying off workers is a move against our will taken when we have no way to turn for help, but also an only way to extricate ourselves from predicament.”5 Not once but several times in the course of my interviews throughout China during the years 1998–2002 officials told me, in so many words, “our government thinks we can’t let people starve to death”6; or, in the words of a district labor market director, “Our setting up labor markets, reemployment centers, social welfare and unemployment relief is precisely to help people not reach a state of starvation.”7 A female trade union official expressed this view with a tone of special urgency: “Ni buneng rang ren meiyou fan chi” [You can’t let people go without food to eat].8 Within a few months of the decision proclaimed in September the top elite had come to acknowledge explicitly that things had gone too far. In effect, state leaders first activated market forces, but then fell back upon much more familiar administrative procedures in order to put a brake upon those very same forces. For in May of the following year, the Party’s top people felt compelled to convoke an emergency assemblage devoted expressly to compensating the millions of its suddenly desperate onceproletarians.9 The imperative behind the May 1998 conference has usually been attributed to signs of outrage on city streets among the sacked, especially as some three million of those let go were found to have been left with no compensation at all.10 While the politicians’ dread of social disorder cannot be denied, a different perspective is also consistent with the facts. This view is that at that mid-1998 forum the cushioning that was announced, in the form of what was to become a nationwide “Reemployment Project,” was a sincere effort to make restitution, though just to a privileged portion

XIAGANG and Urban Political Patronage

41

of the newly unemployed.11 In this chapter I demonstrate that the recompense represented in this project was aimed at fostering and undergirding what amounted to a vanguard portion among the newly ejected, signaling a less than complete abandonment. This elite was comprised of a set of workers whose customary position as beneficiaries of the regime was not to be wholly undone, as these people became the target of a wide range of governmental endeavors to assuage their plight. I argue that the implementation of the program of xiagang was made possible precisely because of the continuing availability of the old patterned, solid geometry of the planned economic state. According to this pattern, a vertical command structure, on the one hand, combined with horizontal cooperative linkages and a clear division of labor at every level, on the other, both reaching to the base of urban society in the residential committees, which are technically not part of the state’s official bureaucracy.12 Thus, the hierarchy of command and control intersected at regular spatial intervals with collaborative activities at horizontal levels. The two vectors met at nodes occupied by the most fortunate among the more privileged of the dismissed people. On the basis of previously earned goodwill, these specially placed workers were already partners in alliances of patronage with the local state, as it was embodied in the persons of the ex-workers’ former unit and industrial bureau cadres. Those favored propagated through their (well-publicized) behavior the potential of the market, while also sometimes helping to create new placements for some members of the larger, non-advantaged multitude. In return, officials in the local offices facilitated every move the once-workers took in their efforts to establish new sources of livelihood for themselves. In the process, the state expedited and legitimated through its offices’ ample assistance what appeared on the surface to be their laid-off allies’ so-called self-help strategies (zimou shenglu). The entire setup appears to have run quite smoothly, greased as it was at every point with the oils of guanxi.

Restrictions on the Recipients Right from the start, the regime was unequivocal that all of the measures specified in the May 1998 meeting’s document were directed at, and only at, dismissed workers from state-owned enterprises.13 As a researcher from the Ministry of Labor and Social Security’s Division of Strategy of the Institute for Labor Studies explained the policy to me soon after that historic meeting, “The government and the enterprises can’t solve the problems

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of all those dismissed. So our main target is those from the state firms.”14 Even without these authoritative words from my informant, it was obvious that the benevolence and the complexity of the measures that were put into effect and the costs incurred meant that millions had to be left out of the schemes. And even among the once-state-employed, far from all of those let go from their posts were either counted or compensated. The overwhelming majority of the discharged workers with whom I spoke were people I met out on the streets, as they hustled to earn a few hundred yuan each month through tiny private ventures in order to keep their families alive.15 Their situations illustrated the many pitfalls for those among the job-losers who were either not from state firms, were from unfortunate, unprofitable, money-losing state firms, or were personally not well connected. These latter former laborers were the ex-employees of firms that had had money to distribute allowances at first but then had run out of cash; those who had been retrenched before the 1998 Reemployment Project—with its orders to succor the sacked—became a serious national program, and who therefore either got only a lump-sum from their old employers at the time of their termination or got nothing at all; those who had been supplied with the zheng 16 but who never saw its promises fulfilled; or those whose firms had set up a “reemployment service center” (more on these later) that was completely useless to them. Many others’ firms had “kuataile” (collapsed—which, in practice, often meant that it disappeared into a merger or was bought by a foreign company), so that—for whatever reason (and, allegedly, management peculation was a frequent one)—they had no funds to offer; those whose firm continued to exist, but who were never contacted and so had no idea whether or not it had set up a center; and those “fired,” not “laid off,” and so ineligible for any help. And the (likely) millions who were relegated to designations other than xiagang—labels such as long holiday (fang changjia), internal or early retirement (neitui, tiqian tuixiu), liangbuzhao (neither the firm nor the worker demands anything from the other), or tingxin liuzhi (in which the salary had ceased but the position was being held, at least in name)—were neither tallied officially among those laid off nor were they treated as those who were. The key for understanding who could be included and who was not to be served lay in an enterprise-based reporting system. Each enterprise was to report to its city’s labor bureau the number of workers it had released. It was important to give an accurate number, since, if a firm failed to report, it would not receive the government’s portion of the basic living expenses that were to be provided to the enterprise’s no-longer on-the-job employees.17 At the labor bureau’s headquarters, a computer stored the new information it received each month from the firms, showing who in each state

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firm in the city qualified for the allowance. Before the tenth of each month, the firm applied to the city’s Bureau of Finance, which then allocated the funds to the enterprise, in accord with what the Labor Bureau had requested.18 So the system rested entirely on figures furnished by the firms, which could certainly strategize with their submission of statistics, in the interest of getting more state funds, of meeting certain quotas, or of not revealing any excesses to which it might have gone in dismissing people. Perhaps as a result of such possible maneuvering, huge discrepancies and inconsistencies attend the published numbers of the laid-off. Uncertainty about these numbers might result from reading the chapters in the present collection: Li Peilin and Zhang Yi note 25 million from 1996 to 2000, plus another 14 million in 2002; Yongshun Cai mentions “more than 48 million” from 1995 to 2000, and Mary Gallagher refers to “more than 30 million.” Others, officials in China, have put the number as high as 60 million.19 Even the state-authorized National Bureau of Statistics yearbook for 2003 almost appears rigged to mix up the researcher: it shows that just 5.15 million people remained laid-off at the end of 2001 and that only another 1.62 million fell into that category in 2002. But it also reveals that 40.31 million workers were released from state-owned units, and another 20.05 million had to leave collectively owned ones over the years 1995–2002, summing up to more than 60 million people who left their supposed lifelong posts.20 Drawing on state sources, a recent article by John Giles, Albert Park, and Fang Cai cites the following data from the 2002 statistical yearbook: a decline of 64.6 million in the total number of workers employed in state and collective firms between 1995 and 2001, 46 million from state firms, and 18.6 million from collective ones. Yet the authors also state that regime accounts show 43 million workers officially registered as laid off as of the end of 2001, of whom 34 million came from state-sector firms. 21 This seems to mean that, as of year end 2001, at least 12 million of those no longer in state-sector enterprises and 9.6 million of those once in collectives, all of whom had been there six years earlier (a total of 21.6 million people), were not officially being counted as having been laid off. These statistics suggest that serious ambiguities, plus substantial gaps, attended the division into groupings—for the purposes of publicity but also of preferential assistance—of workers no longer in their original slots. This approach in practice differentiated the components of the old workforce into three sets. At the extremes, some were to be retained within their initial plants for their politics, their power, or their talent, and others were to be relinquished, for their worthlessness in the new, emerging world of profits. Among this latter set, some—if they were fortunate—were granted what was usually a one-time or temporary pittance. In the middle

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were the genuine, state-firm-affiliated “xiagang” workers, many, but not all, of whom did get benefits. The purpose of the largesse was not just to ensure the loyalty of these people to the state and a resultant silence on the streets. The program also enabled these individuals to serve as models to the multitude of their less-endowed colleagues. The cream of this crop was composed of one-time activist workers, who had long since been recognized by their superiors for their energy, leadership, competence, and, presumably, their ability to court their cadres. These exworkers were in league not just with the leaders of their former firms. More importantly, these were people whom enterprise cadres had in the past recommended to their own industrial bureau supervisors for awards, and who, therefore, had shone beyond the bounds of their own particular workplace. Their potential already recognized, during the period of layoffs they not only attracted copious help from those above them, they also became the local state’s auxiliary in finding ways to reemploy the less resourceful. Over the years 1998–2002, I steeped myself in the subject of xiagang. During the summers I conducted interviews on this topic with scholars and urban officials in Beijing (1998), Guangzhou (1998), Lanzhou (2002), Shanghai (2002), Shenyang (1998), Zigong (2001), and Wuhan (1998– 2002, every year). I was also able to talk with over one hundred laid-off individuals during these years, the overwhelming majority of whom were in Wuhan. I also read several hundred journal articles and some books on xiagang and reemployment during these years. The material and viewpoints in this chapter are informed by all of this data, but especially by interviews in Wuhan.22 My on-the-spot, nuts-and-bolts discussions with a number of bureaucrats from different offices in different cities and over time lent credibility to what any one of them told me at any one stage.

Hierarchy, Horizontal Teams, and Nodes It is important to reiterate that the only people eligible for any of the Reemployment Project’s beneficence were those the regime defined as the true laid-off people, the genuine “xiagang zhigong.” Those fully qualified for the label of xiagang were the individuals formally furloughed who had previously labored for and belonged to and, after being laid off, continued virtually to belong to—at least in name—still operating, still singly standing, still extant plants.23 Strictly speaking, the term applied just to persons who met all three of the following officially designated conditions: (i) s/he began working before the contract system was instituted in 1986 and had a formal, permanent job in the state sector (plus those contract laborers in

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state firms whose contract term was not yet concluded); (ii) because of his/ her firm’s problems in business and operations, had been retrenched, but had not yet cut off “labor relations” with the original firm (which, of course, ipso facto remained in existence); and (iii) had not yet found other work in society.24 In order to be admitted into a reemployment service center, the person had to be allocated a document (xiagang zheng) certifying his or her status as a one-time state firm worker. Only those admitted to a center and in possession of this zheng were eligible for the basic livelihood allowance and the preferential policies that were devised to accompany it. This is not to say that all those eligible in these ways received any or all of these benefits, but only that those ineligible were never even meant to get them.25 By late in the year 2001, although in everyday parlance the term xiagang had become loosely and colloquially employed to refer to anyone who was no longer working in the job s/he once had filled,26 the label had officially become further limited: in tautological fashion, the person had to come from a state-owned firm, and had to have been entered into a reemployment service center and received a livelihood allowance (jiben shenghuofei), a subsidy for which only those from the state firms were eligible.27 In short, these were individuals among the ousted who had formerly been employed in enterprises that, though not highly profitable, were continuing to perform reasonably well. Those in Beijing—and also those in the municipalities responsible for the counting and the catering—concentrated only on serving this subgroup among the removed. The claims that “about 95 percent of the workers laid off from state-owned enterprises have gotten their basic livelihood allowance” and that “as of the end of last year, we were able to guarantee a basic subsistence for around 95 percent of the laid-off workers” amount to strong clues to this conclusion about tautology.28

Hierarchy The upper tip of the pyramid of patronage in every city was the place occupied by the urban Bureau of Labor and Social Security.29 It was here that a plan was devised to restrict certain professions to local people, in an attempt to bar peasants from occupying jobs that the laid-off could fill,30 and that rules were established to charge firms hiring peasants an “adjustment fee,” (tiaojiefei) the proceeds of which were put into aiding the laidoff.31 Here too lists were drawn up and passed down the line—from city district to street office—telling each mass organization which dismissed workers specially needed help.32 Names of those in hardship also traveled back up this ladder.

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While the labor bureau and its subcomponents (or, one might say, field offices) at lower levels were to coordinate every aspect of the work, not only governmental agencies but local branches of mass organs, such as the Federation of Industry and Commerce, the trade unions, and the women’s federation, also had to become involved, each working with a hierarchy of its own. Surely graft, plus the tendency of some offices to put their own financial goals ahead of the injunction to ease the plight of the expelled, not to mention the insufficiency of funding for the Project’s impressive goals, prevented anything like a total execution of the Reemployment Project, even for all state-connected previous employees. But interviews and observations attest that much work was undertaken in the service of assisting this particular subclass among the now unemployed. Also at the city level, labor officials devised sets of targets and quotas to govern a wide range of behaviors involved with the operations of laying off and reemployment. One type of quota determined how many discharged people were to be settled (anzhi) into some sort of new position, figures then handed to each bureau or holding company, and thence down to the enterprises for which a given bureau was responsible.33 Each enterprise also received quotas for the number of layoffs it was to enforce.34 A district labor market director in Wuhan reported that the government had also specified how many dismissed workers his office was to train in a given year.35 According to one sacked worker, the process of assigning statistics for new placements came from levels above the city: “The state [referring to the province and possibly to the central government above that] gave the city a quota for reemploying and then the city allocated a quota to every unit, according to its size.” Quotas allegedly were extended to governing the numbers of laid-off personnel that any given firm was able to succor at any one time, such that one ex-accountant was forced to wait until other former employees at her firm had departed from her firm’s reemployment center, thereby making a space for her. In the meantime, she received only half the basic livelihood allowance she was due.36 The Bureau of Labor had as its charge the paradoxical task of “constructing” a “labor market,” a job it attempted to accomplish by ordering each urban district to form such a “market” under its own aegis—by providing sites for holding training classes,37 installing job introduction booths, and computerizing information about the demand for and local supplies of workers.38 At the labor bureau’s behest and under its organization, job meets were also held at regular intervals, at which employers in need of hands and people looking for work could get together.39 The bureau also promulgated and arranged for “preferential policies” on loans, licenses, and taxes, regulations that were passed along to the labor markets at the city district levels, which, in turn, relayed the information to state

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firms, whose managers went on to inform their departed staff.40 Whether or not all of these programs achieved their goals, certainly large numbers of people severed from their posts did benefit from them. The principle of hierarchy is also illustrated by the staffing of the project for reemployment. In Shenyang, for instance, forty-four people were assigned to manage this work full time within the bureau of industry and commerce, while at the district level and below several people handled the work on a part-time basis.41

Horizontal Teams By 1998 the entire urban bureaucracy, both vertically and horizontally, was primed to execute the various instructions imparted at the May conference that year, geared to guarantee the basic livelihood and reemployment of staff and workers who had been laid off from state-owned enterprises. The meeting’s “special circular” called for “strong and forceful measures” to ensure the realization of the objectives set forth the previous fall, in the Party’s fifteenth Congress state-owned enterprise-reform plan.42 Party leaders took the view that a crucial means for executing that plan was to focus on the well-being of the most potent segment of the expelled workforce, those from the large and medium state-owned firms, so that these firms especially could be thrust into a virtuous cycle of development by reducing their long-standing overstaffing, a product of the planned economy. The political elite saw that this aim could be obstructed were social stability disturbed. And, in turn, its members understood that that possibility would be a function of the degree to which discharged people could meet their daily subsistence needs, a mission the meeting’s document deemed the “socialist system’s intrinsic demand and the Party and government’s responsibility.” So not only was restraining angry workers on the roads a high priority; the leadership also saw its own role at this juncture as one of fulfilling an obligation. To make these priorities into a reality, each individual firm was deputed to install a “reemployment service center.”43 These centers were entrusted with caring for those laid off from the enterprise. Accordingly, the centers were to disburse monthly living allowances, arrange occupational training, provide job introductions, and contribute to each trustee’s welfare payments.44 In order to achieve these several objectives, far more organs than just the firm itself had to pitch in; indeed, a wide array of local offices all were called upon to coordinate their work around the objective of making the sackings palatable to their victims. The industrial and commercial system had to agree to simplify registration procedures for ex-workers who

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took up service work, and sometimes even to waive license fees altogether; while the local tax bureaus had to eliminate the business tax, the individual income tax and the collection of administrative fees for three years for the new tiny ventures started up by laid-off people.45 State commercial banks were told to institute small-scale enterprise credit departments. Localities were to design measures to encourage existing firms to absorb or otherwise arrange placement for their laid-off. Where conditions were appropriate, Reemployment Project funds were to be used for road construction, environmental protection, tree and grass planting, and public works, so as to create new jobs. Even the news media were corralled into serving as information channels for employment information, job advertising, and consultation, in the interest of constructing a labor market. A principal aim here was to promote the reemployment of the discharged. All of these efforts called for a great deal of teamwork. The urban labor bureau’s radius for cooperation extended beyond its local area: Hubei province established an office in Shanghai, for example, to take care of workers it sent to Shanghai for employment.46 Matching up each administrative work unit (shiye) around the city to one tekunhu (household in special difficulty), to offer assistance of various kinds—and in some cases each cadre with one laid-off worker—was also a job entailing much synchronization.47 Schools and other competent bodies in the community were urged to provide professional training. One institution that I visited, the Wuhan Modern Household Management Academy, was selected by the city Labor Bureau in mid-1999 and approved by the provincial Education Bureau as a “Labor Reemployment Training Base.” Its work required liaising with the organs managing the laid-off within individual workplaces, in order to solicit students; providing enrollees with instruction in a skill; and then placing the “graduates,” by drawing upon the academy president’s old connections with units such as Women’s Federation offices, restaurants, and even work places in Beijing, Shenzhen, and Hong Kong.48 The urban Bureau of Labor in each city was put in command of a small group made up of representatives from about a dozen relevant departments and organizations, which met once or twice a month to map out strategy and nail down the respective roles of the member units, as well as to ensure their joint efforts in installing and activating the Project.49 From the perspective of these bureau officials, the fabrication of a labor market required their involvement, and could not be left to chance. Instead, it was to be the product of bureau cooperation with the city’s economic and planning commissions, its finance and tax offices, and its bureau for industry and commerce, among other offices.50 Among the members of the labor bureau-led group was the local branch of the trade union federation, another unit that had a central role in the

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program. Its cadres’ work necessitated a great deal of interaction with other units. For one, they had to contact educational and academic institutions, in order to meet their assignment from above to set up professional training for the xiagang.51 One example of this was the Wuhan unions’ arrangement of college scholarships for the children of the especially-poverty-stricken (tekunhu) laid-off workers.52 Like their colleagues across the country, the unions in that city also developed over a dozen training classes of various sorts, in which they were able to coach as many as sixteen thousand people per year. In their provision of no-interest loans to former workers who became self-employed, the branch union office had to acquire funds from the local offices of the Party; in 1999, in Wuhan a million yuan were amassed and donated to more than twenty enterprises and projects. And in organizing citywide job meets (ganjihui), union leaders had to cooperate with the labor bureau, as well as to connect with some one thousand units, of which one-third were firms with which they had “very close relations.” In the course of managing the meet, cadres notified every district union, industrial bureau, and general company, which in turn informed each state enterprise under its watch, as well as disseminating the details to the news media.53 Most visibly, the union’s local office selected and fostered models, whose ventures (which they endorsed as “reemployment bases” [zaijiuye jidi]54) they went on to assure of business success. In Shenyang, an exemplary base of this kind, the “Wu-ai Market” (five loves) provided work for as many as one hundred thousand individuals.55 Union officials could do this only by arranging every kind of preferential policy for the infant enterprises; this called for intervention at the banks, the tax offices, and the industrial and commercial bureaucracy. My best evidence that the people in charge at the unions took these assignments seriously was a conversation I overheard going on behind my back as I rode in the front of a taxi: the union official accompanying me to observe the “bases” he was sponsoring was explaining quite pragmatically to a coworker (and not at all for my benefit) how training a laid-off worker to become a cook cost at least 380 yuan just to buy the necessary materials. Similarly, the Women’s Federation also set up training bases aimed at instructing jobless women to prepare banquets, do sanitation work, repair home computers, and fix broken small appliances. Teaching all of these skills required enlisting the assistance of those in a fair number of pertinent offices outside the federation itself. The same was the case in fulfilling the federation’s mission of establishing a network of job provision, from the city level down to the district, the street, and finally the residents’ committee, at each of which levels a center, a station, a brigade, and a

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point, respectively, had to do its share. Women were placed by these units in household helper and simple processing jobs,56 as well as in street cleaning and child minding. The federation also set up registration counters for women within the city and district labor markets, doing which called for cooperation with the labor bureau. Providing for night markets meant working with the Industrial and Commercial Bureau, the Transportation Bureau, and the Public Health Department, to obtain licenses, stalls, and spots on the street. Helping women to sell flowers at cost, to manufacture small articles of daily use, and to make signboards all demanded good relations with the offices in charge of the requisite materials.57 The Federation of Industry and Commerce, another “mass organization,” also had its marching orders, duties it could carry out only by interacting with fellow municipal units. This Federation was placed in charge of, among other things, setting up reemployment bases such as restaurants, connecting with state firms to hold its own job meets, and working from a list of names of needy former workers, sent by the city labor bureau, to find placements in the newly forming private sector for those so enumerated.58

Those at the Nodes The geometry configured by the pyramids of command, combined with the horizontally cooperative teams centered at city level, turned solid and came to life most dramatically at the nodes where the two networks met. There “reemployment models,” “stars (mingxing),” and “model reemployment bases” were made possible, visible, and profitable by the concentration of effort and resources that multi-vectored collaboration facilitated. These models and their ventures (actualized in the bases) did not spring from nothing. Instead, an urban industrial politics of patronage and alliance, born years before the events of 1998, brought these post-layoff paragons into being.59 In what follows I briefly describe and extrapolate from a number of cases that I observed in my 2000 fieldwork/interviews in Wuhan, and from the writing of others who studied this topic. In this volume, Kun-chin Lin astutely describes a “reworking of patron– client relations between subgroups of workers and managers,” but his focus is purely within the plant.60 William Hurst focuses on “good guanxi from the trade union and the party organization [again, looking solely] within the work unit.” Here his interest is in a set of ties that he distinguishes from “guanxi outside the firm,” something that, it seems in his account, some individual workers manage to achieve for themselves. It is this latter type of relationship that he considers “the essential determinate of access to capital and market opportunities.” Both these formulations come close to

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broaching the point I intend to make, but Antoine Kernen’s piece comes even closer. Kernen makes reference to a “local understanding between bosses of the enterprise and political authorities,” though he neither specifies which “political authorities,” nor does he address the impact of this “understanding” on specific workers. It is only the chapter by Eva Hung and Stephen Chiu that hints at the phenomenon that I am calling “nodes”: the spots where some individuals and their operations benefited from bonds both within and beyond the firm. Hung and Chiu quote a person who characterized him/herself as having been “designated a progressive worker in both the factory and the bureau.”61 This statement indicates a three-way linkage—between a chosen worker, his/her own management, and the industrial bureau supervising his/her enterprise—that formed the foundation for special privilege. Once so singled out for “model” status, the worker in question retained a place of priority, despite discharge. Even the May 1998 document had a pointed stipulation stating that the “various places and levels of party and government” to which the circular was delivered “should as much as possible avoid [dismissing] national- and provincial-level labor models,” among other protected personages, such as the disabled. It is likely that those with such an elevated degree of distinction were spared. But, as this Hung/Chiu excerpt implies, models with lesser status could be let go. Individuals, that is, who were still outstanding (or well connected) enough to be awarded the title of model, though at lower echelons than the nation or the province, were not always passed over when the layoffs occurred. These people, already well known to the union and, presumably, to municipal-level bureaucrats (leaders of the bureaus directly above the firms and under the city government), appear to have been picked by their patrons to set up bases. Thus, those who, after discharge, excelled in the new market environment—besides being ingenious and industrious—often had an additional, crucial ingredient at the core of their success. In my official interviews with successful models—all of whom had been handsomely subsidized and boosted in various ways in their businesses by official organs of one kind or another—it was literally astounding how much effort and financial support local governmental offices put into blowing up for mass attention and instruction some discharged darlings.62 As a Wuhan trade union official expressly confessed: “We discover train, and set up [faxian, peiyang, shuli] models, both individual and collective; then we propagate their experiences for other laid-off workers to study.” He went on to explain that the purpose was to “let more laid-offs realize reemployment quickly . . . most models help other xiagang.” As for the selection procedure, he revealed that “We mainly rely on basic-level

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cadres (at the district, bureau, company and enterprise levels) to choose them,” uncovering a network of mutual help, patronage, and alliance stringing throughout the city.63 These statements together create the impression that the cases I encountered and, presumably, thousands more like them, operated quite similarly to the exemplars of Mao’s day. The principal differences today are, first, that the models and their mentors are willing to admit openly to the assistance supplied and received; and, second, that the patronage extended during the time of xiagang was aimed at priming models for attainment in the market, not, as in the past, at epitomizing ideological rectitude. Indeed, these state-manufactured “models,” also labeled stars, uniformly admitted to having received, as one owner of an automobile parts and repair plant—whose tiny private business had excelled to point where its products were selling abroad at the time we met—“help [from the trade unions, in her case] with every difficulty.”64 In another case, at the instructions of the city Labor Bureau, the Federation of Industry and Commerce had sponsored a private restaurant that had become a reemployment base where most of the employees were laid-off workers. In return for the absorption of these hapless laborers (seventy former workers delivered by the district labor bureau’s labor market), city governmental offices had the bank provide a loan; and the district Industrial and Commercial Administration, the trade union, and the Women’s Federation were all called upon to ensure that no income tax and no labor or management fees were demanded of the firm. As the eatery expanded, the “government built whatever we needed to have built.” Not surprisingly, the head of the firm was a citywide Women’s Federation model. A particularly flagrant case was also a private restaurant run by people who had lost their factory posts, which had become the largest such establishment in all of central south China by the time I visited, able to serve over a thousand guests at one seating! The place had been initiated with a city-government-engineered merger between an old state enamelware plant and another company. There “all the relevant departments [had] assisted with the appropriate procedures.” Empirically, this meant that bureaucratic approval procedures were expedited65; the local press had been told to put out favorable “propaganda,” printing news articles to “introduce” the eatery; and the city government had arranged for pretty scenery in the surrounding environs and turned the street into a specialty-restaurantsonly one, aimed at the tourist trade.66 A male “star” who ran one of the trade union’s four reemployment bases in Wuchang had became a manager of a factory manufacturing fireprotection gates and had already hired 126 former laid-off people—all introduced to him by the district trade union’s job introduction center—as

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of September 2000, when I made his acquaintance. In the early days of his venture, he had some achievement in business, which was discovered by superiors. “All kinds of government departments” then had assisted him in setting up a company. The trade union in particular helped him to connect with other departments, acquiring for him a no-interest loan from the bank, forming for him a joint-capital (hezi) company with another firm, and securing a free business license, prestige, and every other kind of preferential policy for him. Yet one more star, a former workshop leader in her old unit, was introduced to me as a “famous xiagang leader.” Her post-plant career had begun as she had organized a group of other laid-off people to do sanitation maintenance work with “a lot of support from the upper levels.” When I met her she was managing a household work agency, again as the recipient of a lot of support from the upper levels. The street ( jiedao) government had given her rent-free office space and a gratis telephone line once she was laid off, and the city Women’s Federation supplied her with air conditioning and got her elected to her residents’ committee. Certainly all of these perquisites depended upon the street office’s and Women’s Federation’s guanxi with a range of other bureaucracies, which, presumably, were also under orders to bolster the opportunities of stars such as my informant. The woman went on to set up a children’s lunchroom in a rent-free building, using the fees that parents paid for lunches to fund her (also laid-off) employees’ paychecks. At the time I saw her, this star had just set up a sanitation company employing three hundred laid-off workers; its expenses were met by neighborhood stores and residents.67 This capable woman’s previous position as a leader in her unit suggests that she had long possessed the potential for obtaining a point of entree to the new world of business, even despite losing her former position. Still another star had even been visited by state president and Party general secretary Jiang Zemin. Clearly this recognition amounted to one prong in the publicity about the success possible for laidoff people that was meant to inspire other, struggling, off-post individuals.68 But the subtext here is that no matter how noteworthy, a municipal model could not have attracted the attention of the top personality in the entire country without several intervening layers of patronage having first been set into motion. The moral of these stories is this: even as an enormous number of workers—including but by no means limited only to those people whose positions put them properly into the officially counted category of xiagang— were cut off in droves from their once-lifetime posts, models and stars could flourish. Even despite the dislodgings, the political elite did not intend to undo entirely its time-worn alliance with a special segment within its old

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laboring class (not to mention its ongoing priority for the Party-affiliated, the management, the well-connected, and the more educated within the enterprises, who were often able to hold onto their positions).69 It was just a special, preferred group among the sacked—those from still extant, stateowned firms of some size—whom the regime considered to be the true xiagang, or laid-off; and there was a tiny segment among these favored former workers who were the chosen targets of a highly restrictive but reasonably effective program of preferential treatment.

Conclusion The intention behind the entire project, informed as it was by at least some degree of remorse, was just in part to head off resistance. Another crucial objective was to jump-start a post-planned-economy labor market.70 In this scheme, manufactured models were not only backed by those above them—both within and beyond their plants—to put on a good show. They were also charged with forging new enterprises that incorporated substantial numbers of their own confreres. The upshot is that, even as the xiagang project threw tens of millions into joblessness and penury, it also honored a bevy of better-off pets. The urban patronage pyramid and its intersection with official horizontal crews of cadres—all carryovers from the days long before markets were even imagined in the People’s Republic—made all this possible. And the units in this maze (and those who manned them), plus the men and women at the nodes where they meet were, in the view of the top political elite, the potential building blocks—in a transitional phase still underway over two decades after “reform” commenced—that this leadership wished to become the backbone of the new marketplace for labor in the cities.

Notes 1. I personally have contributed a lot to this picture, as in the following articles I wrote in recent years, all of which paint it in very grim shades indeed: “The New Crowd of the Dispossessed: The Shift of the Urban Proletariat from Master to Mendicant,” in Peter Hays Gries and Stanley Rosen (eds.), State and Society in 21st Century China (New York and London: RoutledgeCurzon, 2004), pp. 50–66; “State and Society in Urban China in the Wake of the 16th Party Congress,” The China Quarterly (hereafter CQ), no. 176 (December

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2003), pp. 949–959; “Labor in Limbo: Pushed by the Plan Towards the Mirage of the Market,” in Francoise Mengin and Jean-Louis Rocca (eds.), Wealth and Labour: Cross-Cutting Developments of Present Approaches (New York: St. Martin’s, 2002), pp. 31–61; “The Creation of a New Underclass in China and its Implications,” Environment & Urbanization 18: 1 (April 2006), pp. 177– 193; “Labor Market Reform and the Plight of the Laid-Off Proletariat,” CQ, no. 170 (June 2002), 304–326; “China’s Urban Workers and the WTO,” The China Journal (January 2003), pp. 61–87; and “Why We Cannot Count the ‘Unemployed,’ ” CQ, no. 167 (August 2001), pp. 671–688. Others have also presented the negative side of laid-off workers’ situation, including Ching Kwan Lee, Jean-Louis Rocca, and other authors in the current volume, especially William J. Hurst, Eva Hung and Stephen Chiu, Antoine Kernen, and Yongshun Cai. Some other examples are: Antoine Kernen, “Surviving Reform in Shenyang—New Poverty in Pioneer City,” China Rights Forum (Summer 1997), p. 11; Andrew Watson, “Enterprise Reform and Employment Change in Shaanxi Province,” paper presented at the annual meeting of the Association for Asian Studies, Washington, D.C., March 28, 1998; Ching Kwan Lee, “From Organized Dependence to Disorganized Despotism: Changing Labour Regimes in Chinese Factories,” CQ, no. 157 (March 1999), pp. 44–71; Mark Blecher, “Strategies of Chinese State Legitimation Among the Working Class,” paper presented to the Workshop on Strategies of State Legitimation in contemporary China, Center for Chinese Studies, University of California at Berkeley, May 7–9, 1999; Antoine Kernen and Jean-Louis Rocca, “The Social Responses to Unemployment and the ‘New Urban Poor’,” (China Perspectives, no. 27, January–February 2000, pp. 35-51); and Jean-Louis Rocca, “Old Working Class, New Working Class: Reforms, Labour Crisis and the Two Faces of Conflicts in Chinese Urban Areas” (first draft), paper presented at the Second Annual Conference of the European Union-China Academic Network, January 21–22, 1999, Centro de Estudios de Asia Oriental, Universidad Autonoma de Madrid, Spain. 2. In early 1996, a decision was announced to “grasp the large [firms] and let go of the smaller ones”—through sales, leasings, and mergers [zhuada fangxiao] [see H. Lyman Miller, “Institutions in Chinese Politics: Trends and Prospects,” in Library of Congress, China’s Future: Implications for U.S. Interests: Conference Report (Washington, D.C., September 1999), 45; Hang-Sheng Cheng, “A MidCourse Assessment of China’s Economic Reform,” in Joint Economic Committee, Congress of the United States, ed., China’s Economic Future: Challenges to U.S. Policy (Armonk, NY: M.E. Sharpe, 1997), 29; Joseph Fewsmith, “China in 1998: Tacking to Stay the Course,” Asian Survey XXXIX, 1 (January 1999), 100.] 3. For Jiang’s report to the congress, see Summary of World Broadcasts (hereafter SWB) FE/3023 (September 13, 1997), S1/1-S1/10. 4. Zhang Liangcheng, “Zhengque renshi zhongguo dangqian di shiye wenti” [Accurately understand China’s present unemployment problem], Shehui kexue dongtai [Social science trends] no. 4 (2000), p. 45.

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5. Ming Pao [Bright Daily], December 19, 1997, in SWB FE/3107, December 20, 1997, G/7. 6. This is a quotation from an official at the Gansu Bureau of Labor’s social security section, August 14, 2002. 7. Interview, Jiang’an labor market training office, September 7, 1999. 8. Interview, October 31, 2001. 9. For the decision that issued from this meeting, see Guangming ribao [Bright Daily] (hereafter GMRB), June 23, 1998. 10. Linda Wong and Kinglun Ngoc, “Social Policy between Plan and Market: ‘Xiagang’ (Off-duty Employment) and the Policy of the Reemployment Service Centres in China.” Social Policy and Administration 40: 2 (2006), pp. 158–173. 11. The “Reemployment Project,” first put into effect in Shanghai in 1994, and tried out in other major cities thereafter, was now to be executed across the country. See Ru Xin, Lu Xueyi, and Dan Tianlun, eds., 1998 nian: zhongguo shehui xingshi fenxi yu yuce [1998: Analysis and prediction of China’s social situation] (Beijing: shehui kexue wenxian chubanshe, 1998), p. 86. 12. For an earlier look at hierarchical relations within the urban industrial bureaucracy and how they operated, see the articles by Barry Naughton and Andrew Walder in David M. Lampton and Kenneth G. Lieberthal, eds., Bureaucracy, Politics and Decision Making in Post-Mao China (Berkeley: University of California Press, 1992). These are Barry Naughton, “Hierarchy and the Bargaining Economy: Government and Enterprise in the Reform Process,” pp. 245–281; and Andrew G. Walder, “Local Bargaining Relationships and Urban Industrial Finance,” pp. 308–334. As the titles of the chapters indicate, the focus in both is upon intra-bureaucratic relationships and bargaining. 13. According to an interview with officials of the Industrial and Commercial Bureau in Wuhan, August 19, 1998, Wuhan’s municipal document No. 31 in 1996 similarly set forth new regulations on the special treatment being only for workers expelled from large and medium state-owned enterprises. 14. Interview, Beijing, August 25, 1998. 15. In my street interviews over the years 1998–2002, I encountered every situation I allude to in this and the next paragraph, at least several times each, if not more often. 16. This is the certificate attesting that a worker has been an employee at a stateowned firm but no longer works at that firm and has not yet found other employment. More on it to come. 17. Interviews, trade union official, Wuhan, September 13, 2000, and bureaucrat from the social security office under the Wuhan labor bureau, August 21, 2002. 18. Interview, Wuhan Bureau of Labor, October 30, 2001. 19. An internal report suggested that the total number of the laid-off and the unemployed combined was closer to sixty million as of mid-2001. Wang Depei, “San min yu erci gaige [Three Types of People and The Second Reform], Gaige neican [Reform Internal Reference], no. 7 (2001), p. 25. The economist Hu Angang stated that China had laid off fifty-five million people from 1995 to mid-2002 (China News Digest, July 9, 2002).

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20. Zhongguo tongjiju renkouhe shehuikeji tongjiju, laodong heshehui baozhangbu guihua caiwusi, bian [compiled by the Department of Population, Social, Science and Technology Statistics of the National Bureau of Statistics and the Department of Planning and Finance of the Ministry of Labour and Social Security], Zhongguo laodong tongji nianjian 2003 [China Labour Statistical Yearbook 2003] (Beijing: Zhongguo tongji chubanshe, 2003), 20, 135. 21. John Giles, Albert Park, and Fang Cai, “How Has Economic Restructuring Affected China’s Urban Workers,” CQ, no. 185 (2006), pp. 61–62. 22. Giles et al. (ibid.) found that of the five cities in their survey (Fuzhou, Shanghai, Shenyang, Wuhan, and Xi’an), Wuhan had the highest unemployment rate as of November 2001, at 16.8 percent. Shenyang and Xi’an are also usually considered to be cities where this problem is serious. This research suggests that the situation of people on the streets must have been comparatively quite severe in Wuhan. 23. In the words of the head of the social security insurance work office of the Wuhan branch of the All-China Federation of Trade Unions, September 13, 2000, “Collective enterprises have no reemployment service center and get no government subsidy; only state-owned enterprise workers are properly xiagang.” 24. This is in Guo Jun, “Guoyou qiye xiagang yu fenliu you he butong?” [What’s the difference between laid-off and diverted workers in the state firms?] Zhongguo gongyun [Chinese workers’ movement], (March 1999), 32, among many other places. 25. Interviews, Wuchang, Wuhan district labor market, September 14, 2000; unemployment insurance and employment section of the social security office of the Bureau of Labor and Social Security, Wuhan, August 21, 2002. 26. By 2002, even migrant peasants and demobilized soldiers were using the term to describe themselves, though their positions fit none of the requisite conditions. Interviews on the street, Lanzhou, August 13, 2002. 27. Interview with Wuhan trade union officia1s, October 31, 2001. 28. SWB FE/4032 G/9, December 29, 2000, from Xinhua [New China News Agency, hereafter XH], December 27, 2000, and SWB FE/4062 G/3, February 2, 2001, from XH, January 31, 2001. 29. In 1998 the Ministry of Labor in Beijing, and all of its subordinate branch offices at lower levels, had their names switched to the Ministry (or Bureau) of Labor and Social Security. For simplicity’s sake, since I am concerned here almost exclusively with the work of the labor portion of this bureaucracy, I will hereafter refer to this unit just as the Bureau of Labor. 30. Interview with labor bureau, Shenyang, August 18, 1998. 31. Interviews, Ministry of Labor, Employment Section, September 1, 1998, Beijing; Labor Employment Section under the Bureau of Labor, Wuhan, September 7, 1998. 32. Interview with Industrial and Commercial Bureau, Wuhan, September 15, 2000. 33. Interview with Wuhan planning commission, September 9, 1998.

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34. Interview with Tang Jun, deputy director of the Social Policy Center of the Institute of Sociology, Chinese Academy of Social Sciences, Hong Kong, November 16, 2001. See also Tian Bingjnan and Yuan Jianmin, “Shanghai xiagang renyuan de diaocha yanjiu” [Investigation research on Shanghai laidoff personnel], Shehuixue [Sociology], February 1997, 11, which states that “each year, personnel are forced to leave according to a certain proportion. This occurs because their upper level gives its enterprises a quota for the number to be laid off [and uses its fulfilment] as one basis for evaluating leading cadres’ work.” 35. Wuchang district labor market interview, September 14, 2000, Wuhan. 36. Interview, Wuhan, September 4, 1999. 37. According to an interview with an official at the training office of the Jiang’an district labor market in Wuhan, laid-off workers in batches were given two months of full-time daily training (interview, September 7, 1999). Training was aimed at teaching laid-off people to use computers, cook, and make electrical repairs, obviously calling for assistance from other units in town. 38. Interviews, Wuhan Planning Commission, September 9, 1998; Shenyang Labor Bureau, August 18, 1998; Jiang’an district labor market, Wuhan, interview on September 7, 1999. I was told about and visited such sites in Wuhan, Lanzhou, and Shenyang in the late 1990s. 39. Wuhan City Labor Market interview, September 7, 2000; interview at Wuhan City branch of the ACFTU, September 13, 2000. 40. Interview at Wuchang district, Wuhan labor market, September 14, 2000. 41. Shenyang, August 19, 1998, interview at Industrial-Commercial Bureau. 42. See GMRB, June 23, 1998, pp. 1, 4. 43. Other work on these centers, besides that of William J. Hurst, are Feng Chen, “The Re-employment Project in Shanghai—Institutional Workings and Consequences for Workers,” China Information XIV: 2 (2000), pp. 169–193; and Grace O. M. Lee and Malcolm Warner, “Research Report: The Shanghai Re-employment Model: From Local Experiment to Nation-wide Labour Market Policy,” CQ, no. 177 (March 2004), pp. 174–189. 44. Yang Shucheng, “Zaijiuye yao zou xiang shichanghua” [In reemployment we must go toward marketization] Zhongguo jiuye [Chinese employment], 3 (1999), 19, calls the center a product of “a special historical stage, a transitional measure which can solve its special contradictions.” 45. Interview with a section chief at the city’s tax office, September 10, 1998. 46. Interview with Labor Employment Office under the city labor bureau, September 7, 1998. 47. On August 28, 1998, an old friend took me to visit the four tekunhu families for which his administrative unit was responsible. I heard more about this program from another friend who was employed in a Party media unit on August 17, 2002. In his unit, each of the twenty–thirty departments helped one family. On August 21, 2002, a social welfare officer remarked on the program too, explaining that better-off officials were to help one family each. In a different city, Shenyang, I was told by the Industrial and Commercial Bureau on August 19, 1998, that every cadre in the bureau was assisting one

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48.

49.

50. 51.

52. 53. 54.

55. 56. 57. 58. 59.

60.

61.

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laid-off person, and that altogether a hundred expelled workers had been provided with succor just that year. Interview at the academy, September 10, 2000. In Lanzhou, arrangements had been made to send laid-off workers to the countryside, to Southeast Asia, and to the coast (interview with labor bureau in Lanzhou, August 14, 2002). Interviews with officials at the Labor Employment Office of the city labor bureau, Wuhan, on September 7, 1998; at the Qiaokou district Women’s Federation, Wuhan, September 12, 2000; and at the Wuhan branch of the trade union federation, September 13, 2000, all of whom mentioned this small leadership group. Interview, Shenyang labor bureau officials, August 18, 1998. Ng Sek Hong and Olivia Ip, “Unemployment in China and the All-China Federation of Trade Unions,” in Grace O.M. Lee and Malcolm Warner (eds), Unemployment in China: Economy, Human Resources and Labour Markets (London and New York: Routledge, 2007), p. 77. Interview with trade union officials, Wuhan, August 19, 2002. Interview with Wuhan trade union officials, September 13, 2000. To qualify as a “reemployment base,” a venture had to hire among its employees at least 60 percent who were without work because of having been laid off; have a stable business scope; produce an item or service with a good market; and it must already have a worksite. Only the ventures initiated by state-owned-enterprise former workers qualified for this distinction. Information from interview with Labor Employment Office of the Wuhan Bureau of Labor, September 7, 1998. As of August 2000, the trade union was managing a total of thirty-seven such bases, several of which I was taken to see on September 13, 2000. The Shenyang Bureau of Labor was also involved in setting up such bases, which required that it work with the unions and the Women’s Federation at the district levels, as well as with other government departments (interview at Shenyang Bureau of Labor, August 18, 1998). Interview November 4, 2001, with labor economist Mo Rong, Beijing. Processing sweaters, for instance, meant getting the materials from the local textile management offices. Meeting with various level branches of the Wuhan Women’s Federation, September 12, 2000. Interview, Wuhan Industrial and Commercial Federation, September 15, 2000. Edward Friedman, Paul G. Pickowicz, and Mark Selden, Revolution, Resistance, and Reform in Village China (New Haven: Yale University Press, 2005) and idem., with Kay Ann Johnson, Chinese Village, Socialist State (New Haven: Yale University Press, 1991) both demonstrate similar patronage alliances in the countryside, during the era of Mao Zedong and after. Andrew G. Walder’s Communist Neo-Traditionalism (Berkeley: University of California Press, 1986) was the first to discuss urban patronage politics, but it examines only those within individual plants. Informant from May 2000.

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62. Various interviews with models supported and showcased by the Wuhan branches of the trade union federation, the Women’s Federation, and the Federation of Industry and Commerce, September 2000. 63. Interview, September 13, 2000, Wuhan. 64. Interview at the plant, September 13, 2000. 65. The Qiaokou district government had held a special meeting that all the relevant departments had attended, where they were instructed to facilitate procedures. 66. Interview at the restaurant, September 8, 2000. 67. Interview, Wuhan, September 12, 2000. 68. Interview with the Wuhan branch of the Women’s Federation, which sponsored this model, September 12, 2000. 69. See Li and Zhang and Hurst in this volume and Margaret Maurer-Fazio, “In Books One Finds a House of Gold: Education and Labor Market Outcomes in Urban China,” Journal of Contemporary China 15(47), May 2006, pp. 215– 231; also, as one Chinese journal article attests, “Losing one’s job is not just because of an individual’s own traits. It also happens because of poor interpersonal relations.” (Xu Feiqiong, “Zhongguo pinkun wenti yanjiu” (Research on the question of poverty in China), Jingji pinglun, 1 (2000), 108). 70. As sociologist Yao Yuchun, a scholar at People’s University explained to me on September 1, 1998, the Reemployment Project was “a half-planned economic method, whose goal is to develop a labor market.”

Chapter 3 Class Formation or Fragmentation? Allegiances and Divisions among Managers and Workers in State-Owned Enterprises Kun-Chin Lin

Introduction This chapter explores the fundamental dynamics of employee mobilization under the condition of shifting boundaries of the post-socialist firm.1 Through case studies of a wide range of non-compliant behaviors of managers and workers in oilfields and refineries in China, I show that the central state’s institutional innovations to reassert control over state-owned enterprises (SOEs)—in particular streamlining the workforce, hardening budget constraints, and formalizing and standardizing labor contracts— have created an informal environment of fluid allegiances among employees and ex-employees. I emphasize the cross-cutting allegiances between managers and workers, and between existing workers and ex-workers, as forming strong social and psychological bases for sustained collective action and inactions during this period of organizational transition. My analysis serves as a corrective to the conventional wisdom that implies either class formation during marketization or the failure of such as an explanation for the apparent limits of the working class in mobilizing to defend its social contract against the central state. I suggest, instead,

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unpacking the conceptual notion of the socioeconomic “class” to incorporate cleavages among workers and ties that link them to managers even after the end of their “iron rice bowl” tenure. Specifically, key patterns of fragmentation derive from intergenerational differences among the workers, managerial incentive structures, and the continuing reworking of patron–client relations between subgroups of workers and managers in a highly uncertain environment. I conclude that managers’ and workers’ responses to a decimation of the prior notion of “class” have placed a social limit on authoritarian institutional innovation. While disadvantaged employees and ex-workers have little formal recourse to the latest central government fiat, through staging dramatic standoffs and engaging in mutually sympathetic verbal or resource negotiations, they have measurably frustrated the state’s intended separation of constituencies formerly bound within the relatively self-sufficient work units and undermined its advocacy of a notion of efficiency derived from atomized agents.2

Fragmentation of the Working Class and Implications for Mobilization Ching Kwan Lee has pointed out: “Workers’ experiences do not form a coherent template, nor are they uniform across subgroups of workers. That is, contradiction and fragmentation characterize workers’ consciousness and cultural understanding.”3 In order to more precisely disaggregate the varied experience of workers as they face the prospect or the reality of losing their job security, one needs to address three sets of questions: First, do workers’ acts of resistance necessarily imply an anti-market mentality, or might the workers be acutely tuned into the inherently political agenda of downsizing?4 Second, what have been the main cleavages emerging from dismantling SOEs? And third, what does fragmentation imply for the form and potential for autonomous mobilization of subgroups of workers or cross-class involvement by managers? I find the anti-market interpretation of Chinese labor mobilization problematic, and consider how divisions based on socioeconomic differences and political status among workers may form the bases for collective action.

The Impact of Market Forces and Reform Policies on Workplace Politics There is no question that intensified competitive pressures and their fiscal consequences on the central and local states have triggered the introduction

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of radical workforce reduction policies and their rigorous implementation since 1997. However, it does not follow that workers accept “market” pressures as exogenous to central policy and local implementation, and thus non-controversial as the root cause of their material losses. Furthermore, even if this were so, it would seem simplistic to assume that workers rebel in direct response to the encroachment of the market on their past entitlements. Comparative political and historical studies inform us that there is no direct correlation between the degree of exploitation or impoverishment and the frequency and likelihood of collective action.5 To suggest such a link would mean that we implicitly accept a rarefied and, as this chapter will show, inaccurate understanding of officials and enterprise managers as the “visible hands” acting on behalf of the unmediated forces of the market economy. To a significant degree, the earlier assumptions underlie much of recent area studies literature on workers in China. Dorothy Solinger explains shifts in the “principles of provision” of unemployment insurance and enforcement of the Regulations on Labor Contracts by referring to the aggregate number of surplus workers being expelled from inefficient enterprises.6 She states that “the pressures, practices, and postulates of the market—the new activating mechanism—have so far mainly served to aggravate and exacerbate” the institutional inadequacies in welfare provision.7 Ching Kwan Lee attributes the rise of a “despotic” regime in the workplace to competitive environments that sapped the slack resources of SOEs and led to the centralization of authority in the hands of the management at the expense of representations of workers and the Party.8 Similarly, Mary Gallagher finds that competition to attract foreign capital has brought about a convergence in the treatment—or more precisely, the mistreatment—of migrants and original SOE workers in the late 1990s.9 Furthermore, much of the same literature holds a strong premise that as economic conditions in the state sector have worsened, the workers have displayed greater coherence of frustration and unity of action.10 Zhou Xueguang11 postulates that the legacy of uniform state structures in organizing workplaces has produced individuals with similar claims and behavioral patterns, thus easing the barriers for collective action. From her direct observations in a Beijing printing factory, Mayfair Yang argues that structural and role ambiguities facing enterprise managers underline their credibility for pursuing the corporate interest in the eyes of the workers, over time leading to confrontations that strengthen solidarity among workers.12 Extending Zhou’s argument, Mary Gallagher predicts that “[t]here is . . . little chance for SOE reform to lead to fragmentation and increased competition between workers . . . [as] changes in enterprise behavior tend to strengthen worker resistance to reforms that threaten their privileged position.”13 Accounts from journalists and labor rights watchdogs have

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similarly emphasized the increasing coordination and unity of workers’ mentality and the specific claims that they take to the streets.14

Fragmentation of the Working Class and its Implications for Mobilization Two divergent historical perspectives challenge the aforementioned presumption of a coherent working class—or coalescing class in response to market pressures—by supposing divisions among workers as the norm in state firms. Modifying the neo-traditional image in his 1986 study, Andrew Walder15 notes that, as enterprise reform deepened, the weakening of the clientelistic ties between managers and activist workers—driven by the decline of ideology in the workplace, dwindling work unit resources, and institutional changes such as the introduction of production bonus schemes—made redistributive politics even less principled and more contentious.16 Furthermore, the “us” versus “them” division no longer falls neatly along political lines, but increasingly involves the majority of workers who have become demoralized, politically cynical, and concerned with what they perceive as unfair income differentiation mechanisms.17 In contrast, Elizabeth Perry argues that “[i]nstead of political status, socio-economic and spatial categories . . . were the more salient lines of division” among workers employed in burgeoning joint-ownership enterprises in Shanghai in the mid-1950s.18 She identifies young apprentices, recently laid-off workers, temporary workers, and so on as important subgroups displaying varying motivations and styles of antiauthority claims. Furthermore, “the fragmentation of labour could itself provide a basis for working-class militancy” such as during the riots in Shanghai in the spring of 1957. Ching Kwan Lee confirms the historical insights of Walder and Perry in suggesting that divergences across firms in workers’ experience under reform stem chiefly from the varying economic profile of the firms, such as the degree of competitiveness and level of financial endowment of the workplace, which in turn translate into actual wage levels, welfare entitlements, and housing ownership.19 Many of these characteristics reflect the economic legacy of the enterprise’s former position in a highly politicized and stratified “socialist production hierarchy.”20 However, Lee asserts that neotraditional ties have largely fallen by the wayside as managers gain absolute power, workers reconfigure their dependency relations toward the market and familial networks, and the party-state withdraws from political intervention. Consequently, fragmentation leads to despotism and resistance. Further complicating the socioeconomic and spatial divisions are the shifting boundaries of the household registration system (hukou) and work

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unit (danwei), which had mutually reinforced the organization of “resource dependency” relations within socialist enterprises since the late 1950s.21 Historically, hukou codified spatial and state-supplied entitlement hierarchies for the main purpose of enforcing the urban and rural divide; however, the actual functioning and resulting extent of differentiations of hukou depended to a large extent on local decisions by cadres and managers and on the changing nature of the work unit.22 The oilfields and refineries in this study constitute an interesting set of SOEs in that their location and recruitment pattern bridge the urban–rural divide. Due to geological and “third front” imperatives, they were not placed in cities with a diversified economic base (with few exceptions such as Shanghai Petrochemicals); yet they have sufficient economic dynamism and political clout to beget towns and cities that absorb neighboring rural land and population and enable administrative upgrades and social differentiation for their localities. When these SOEs went through expansionary phases in scale and workforce—notably during the late 1970s, mid-1980s, and early 1990s, when over-investment reached a feverish pitch—state managers often dealt with these hukou and danwei status issues rather flexibly, offering benefits to nonpermanent workers without conferring the appropriate formal status. These cavalier gestures represented a form of managerial largesse or compensation for taking land or alternative livelihood away from the incorporated peasants, their progeny, or demobilized soldiers.23 Since they have been regularly and systematically brought into and retained by the SOEs throughout the reform era, the temporary workers discussed in this chapter are not as transitory in their actual or expected tenure as the mobile migrants toiling on construction sites in booming cities.24 When the SOEs faced deep restructuring and drastic reductions in employment and property rights in the late 1990s, these underlying formal status differences became ready selection criteria for layoff policies and the closely associated reductions in public amenities such as housing, utilities, education, health care, and so on. Just as the economically compelled incorporation of migrants into cities has eroded the existing “urban public goods regime” (Solinger 1995) grounded on an exclusive urban hukou, successive cohorts of incorporated workers have challenged the bureaucratic conception and legitimacy embodied in the principles and methods of enterprise reform as dictated by Beijing.25

How Fragmentation Shapes Collective Action or Inaction In the following case studies, I suggest that many of the most contentious cleavages between managers and workers or ex-workers, and within each

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group, have resulted directly from institutional manipulations by reformers in Beijing. This is not to discount the importance of socioeconomic and political divisions prioritized by the aforementioned theorists. Nonetheless, I will highlight the complexity of motivations and shifting approaches to collective action. Different types of cleavages work in different ways given the specific status, resources, and objectives of individual claimants, and interactions with the strategies of other claimants in similar situations. Neo-traditionalist ties between subsets of managers and workers, socioeconomic divisions among workers, and old and new institutional barriers to free association among workers could work sequentially, alternatively, or simultaneously to reinforce ex-workers’ claims.26 Similarly, current employees could pursue “collective inaction” at the level of the shop floor, but then join in protests and riots when circumstances improve the odds for overt expression of dissatisfaction.27 Table 3A.1 in the appendix indicates some of the key directions of strategic maneuvers as workers move from a position of compliance to active resistance of enterprise reform. Some of the salient differences between the findings of the authors mentioned earlier and my study (given later) reflect case selection biases: most of the former were based on direct observations and interviews in factories located on the coastal cities, while I did my fieldwork in natural resource extraction and processing industries often located in remote areas of China. As such, my case studies do not contradict other studies, but provide an alternative context that highlights previously overlooked mechanisms of labor and managerial mobilization as suggested by table 3A.1. All of the studies will over time fit into a broader pattern, once data becomes more readily available, but for now we must be content with partial images that complement each other and point to contingent explanations for working class action or inaction.

Changing the Workplace in Chinese Oilfields and Refineries In the fall of 1998, People’s Republic of China (PRC) premier Zhu Rongji directed the Chinese oil and petrochemical sectors to reconsolidate all assets and operations into three integrated and territorially protected national oil corporations (NOCs) in which the state would hold the controlling share.28 The restructuring of oilfields and petrochemical industries in 1998–2000 was not only the largest asset reallocation event in the reform era, but also the most successful one by the scope and speed of reform implementation and short-term financial returns. The central reformers established oligopolistic competition between two onshore, integrated oil giants—CNPC/PetroChina

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and Sinopec, roughly demarcated along the territorial boundary of the Yellow River—and an offshore, specialized company (CNOOC). Nearly all state-owned oilfields, refineries, and petrochemical plants have been incorporated into these NOCs; henceforth the NOCs’ corporate headquarters in Beijing manage their resource allocation and exchange relations as intra-firm issues, while responding directly to price signals in the domestic and global markets. Under a highly centralized multidivisional form of industrial governance, SOEs as subsidiaries of NOCs have been effectively turned into cost centers, a dramatic change from their status as profit centers under the contract responsibility system of the previous fifteen years. The following section describes how the implementation of hard-budget constraints and financial controls has led to a fundamental realignment of the intra-firm interest groups in the resulting subsidiaries of the NOCs.

Restructuring the NOCs At the microeconomic level, the central state has chosen to rely on the organizational levers of a highly centralized “financial principle of control” (Fligstein 1990) based on a few prices and price-derived signals that would bring profit-maximizing discipline into the SOEs, especially in the “corepublicly listed” subsidiaries (henceforth called the core part) that have concentrated the most valuable assets and a relatively lean workforce drawn from the former SOE.29 The bulk of unprofitable assets and workforce, including those work units involved in production and technical services and provision of social services and local public goods, have been lumped under the “noncore-unlisted” company (henceforth called the noncore part).30 The core–noncore line of demarcation refers loosely to the relative importance of the assets and associated production processes and skills to the essential production profile of the NOC. In actuality, and as a strategic move to maximize the value of initial public offerings of the core part, operational units were tagged as core or noncore based mainly on their contribution to the profitability of the listing shareholding concerns.31 As nominally independent companies, core and noncore parts work together under a new contractual framework defined by the parent corporation. Given its new demand for improved control and fiscal extraction as the dominant shareholder, the central state expects the core part to generate maximum profit through the exploitation of its asymmetric contractual relationship vis-à-vis the noncore part. In practice, the noncore part would bear a large portion of the costs of restructuring by offering services to the core part at rates that could generate profits for the latter, and it must reduce its chronic losses over time

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through tough measures such as massive layoffs and privatization of its units. For production and technical services teams of the noncore part, the operational requirement of “cost control” targets has become increasingly clear—it means there is no a priori fixed-term contract. The contract between the service teams and core operations stipulates an estimated workload, to be accomplished at all costs to the service units, with no certain reimbursement in final wage bill. In fact, the final value of the contract is purely circumstantial to the financial considerations of the core business. If a subsidiary falls short of meeting corporate headquarters’ targets, then the latter imposes penalties, including wage and bonus cuts, denial or postponement of project approval, and other financial penalties in future contracts. The aforementioned radical institutional changes to replace administrative hierarchy with corporate governance with an aim toward establishing hard budget constraints would not confuse any worker or manager as anything but a highly politicized redistribution scheme initiated by elite politicians for the central government’s revenue and control imperatives. It is equally clear that enterprise restructuring aimed to break down the cellular structure of social firms as moral economic entities. It should have the opposite effect of earlier experiments in decentralization and efforts to establish social democracy or widespread employee ownership. To put it more bluntly, the central state aimed to consolidate its control of assets by crowding out the implicit stakeholders under socialism.32

Workforce Reduction by Fiat Responding to foreign minority shareholders’ preoccupation with the bloated size of labor forces in SOEs, the NOC headquarters in Beijing made promises to discharge tens of thousands of workers per year.33 Since the profitability of the core part is directly tied to the cost baseline of its primary contracting partner—the noncore part—the pressure from their parent company on the latter to implement massive layoffs is tremendous. At first glance, the objective need for workforce reduction in SOEs is uncontroversial: for example, Luoyang Petrochemicals employed some five thousand workers for five million tons of refining capacity, whereas a Japanese plant of similar scale would hire only about five hundred workers. In other words, in order to attain the international standard of efficiency as measured by output-per-worker, Luoyang needed to fire nine out of ten workers!34 Beijing started issuing more detailed layoff guidelines in 2001, stipulating a total layoff figure as well as specific targets for key production units. Shengli Oilfield discharged over nine thousand workers in 2001, of which eight hundred belonged to the core part; in 2002, the noncore part alone

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strove to meet a layoff quota of twenty-seven thousand workers.35 Furthermore, Sinopec directed its noncore part to streamline its production and technical service teams as the first steps toward “restructuring for professionalization (zhuanyehua chongzu).” Specifically, Sinopec decided to pare down its drilling teams by setting targets for each of its subsidiaries; for instance, Shengli had to reduce the number of its teams from one hundred and twenty to ninety-five in 2001.36 Furthermore, each unit was required to meet the target of employing fifty-three workers per machine; at the time, fifty-nine workers work directly on each machine and an additional thirty-two persons received related employment from that work unit (e.g., a total of ninety-one employees to a machine). Issuing similar nonnegotiable quantitative targets, Sinopec has demanded that other noncore parts trim their workforce by about 20 percent each year from 2001, to lead to a 50 percent reduction by 2005.37

The Evolution of Xiagang Policies in NOCs From 1999 to 2003, Beijing authorities and NOC headquarters had revised layoff strategies in response to the financial constraints of the parent company. Generally, they set out to provide financial incentives to encourage workers to “sell back” to the SOE their tenured labor posts—a tactic called maiduan gongling. However, as the cumulative cost of this strategy became a drain on enterprise finance, the officials and top managers pushed for alternative schemes that increasingly involved giving workers property rights instead of cash or benefits.38 Prior to 1999, most oilfields and refineries could not force workers to step down from their posts (xiagang), declare a legal termination of their labor contracts (maiduan gongling), or end their work unit affiliation and associated benefits, as formal policies for restructuring the labor force.39 However, managers under encouraging policy environments have taken creative measures to get around the rigidities of the socialist social contract, as highlighted in the following chronology: 1993: Early retirement, but the retirees retained full wages and benefits. 1994: An arrangement for workers to stay home in exchange for a lumpsum compensation of two months’ salary for every year worked, in addition to receiving half of their current salary every month. 1995: Similar deal as earlier, but reduced to a lump-sum of one month’s salary per year employed plus half of the last paycheck every month. 1996: Tightening restrictions for retirement, as workers began to cash in en masse in anticipation of the imminent policy change that would provide even less attractive options.

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1999: Concurrent implementation of contractual termination with financial incentives (maiduan gongling) and “internal” retirement (neitui). The second scheme, quasi-compulsive in nature, ushered middle-age workers into a retired status for ten years with a financial package similar to maiduan gongling. Essentially, it aimed to provide a cushioned transition to “full” retirement with uncertain benefits and no affiliation with the work unit. 2002: Beijing stopped promoting maiduan gongling and neitui. Instead, it strengthened the compulsory and unilateral prerogative of SOE managers to fire workers. Workers would sign a termination of employment agreement with diminished financial compensation and vague or no guarantee of unemployment benefits or living standard subsidies. In addition, the state directed managers to design “privatization” (daizi fenliu) projects that urged workers to own company assets in a separate legal status, thus in effect disentangling their historic reliance on the SOE. More often than not, these spin-off assets were of dubious market value and profitability. Largely, voluntary schemes before 1999 did not involve anywhere near the same number of workers opting out of their posts as maiduan gongling and neitui, which in turn paled in comparison to the scale of layoffs from corporate headquarters’ fiats in the 2000s. Nevertheless, these successive steps created psychological and material divisions among workers who received varying terms of xiagang. As the corporate headquarters quickly ripped up the existing contract for a new deal, current workers, their recently discharged ex-colleagues, and the different generations of xiagang workers learned to continually reevaluate their relative positions. In 1995 the earlier xiagang cohort might have felt lucky in having taken the initial offers, yet by the late 1990s their deal would have compared unfavorably (at least in nominal terms) with those offered to maiduan gongling and neitui individuals. Later I will show how these comparisons become motives for mobilization. For each period, managers faced an acute dilemma of piling on material incentives to speed up voluntary retirement or resignation, and increasing the financial burden on the SOE. The sweeter the deal, the less likely that the company or the state would honor it, until, step by step, Beijing officials and managers finally imposed the layoff policy with heavy-handedness and abandoned all pretence of the “moral economy” of the state sector. For example, the noncore part of Luoyang Petrochemicals spent an average of two hundred and forty thousand Chinese yuan per worker discharged through maiduan gongling and neitui deals.40 Under similar deals for the Zhongyuan oilfield in the same province, which discharged and retired over 16,500 workers in the same

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period, the financial outlay reached four billion Chinese yuan!41 For China’s largest oilfield, Daqing, maiduan gongling amounted to about four billion Chinese yuan, or an average of one hundred thousand Chinese yuan per discharged worker.42 Typically, maiduan gongling incurred costs that were equivalent to three–four years of the enterprise’s net profit. These figures greatly exceed any prior estimates of local and central contributions to social welfare provisions for unemployed SOE workers, and indicate the crucial importance of work units, especially those with a sustained flow of resources such as oilfields, in shouldering the burden of social stability.43

Working Class Fragmentation as a Complex Legacy of Successive Reforms Since radical enterprise reforms and employment policies were introduced in 1997, protests and riots have rocked the industrial towns of Dongying (Shandong), Daqing (Heilongjiang), Luoyang and Puyang (Henan), Liaoyang (Liaoning), and Karamay and Urumqi (Xinjiang) where I conducted fieldwork from 2000 to 2002. I suggest that the patterns of mobilization of the working class show strong correlation with the “social contractual” terms between the state (implemented through NOCs) and workers and ex-workers. Contractual terms vary in several ways. First, protests and unrest were often led by earlier generations of laid-off workers, not the recently discharged. Ex-employees who have barely a nominal or anyway no formal link to the SOE continue to react to fluctuations in two “social contractual” terms: (1) the explicit “best offer” from the enterprise for the workers to voluntarily terminate their labor contract; and (2) the enterprise’s implicit assurance of gradual phasing out of various welfare provisions and guarantee of survival in cases of failure in pursuing alternative employment options. Second, among those still employed by SOEs, I observed increasing incidents ranging from passive noncompliance to active sabotage on the part of employees. Managers and workers attributed the increase to conflicts arising from the power asymmetries and obsolescing contracts between the core and noncore parts. Third, managers have become equally afflicted by the institutional divisions.

Intergenerational Grievances of Laid-off Workers As oilfields and refineries expanded dramatically in the late 1970s to early 1980s, and in the early-to-mid-1990s, several groups of workers were added

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to the initial body of workers including additions of demilitarized soldiers, children of the employees, recruits from cities, and farmers. These groups were brought into the moral economy under significantly divergent terms and subsequently networked differently.44 For example, farmers typically sold their plots to the oilfield, which bought the land at above market value and helped the farmers and their family members obtain jobs with the enterprise and provided various utilities and other subsidies for their sideline activities. Temporary workers were often introduced to deal with the most labor-intensive tasks—colloquially labeled as laborious (ku), dirty (zang), tedious (lei), and dangerous (xian). Examples of these jobs in the oilfields include exploration, drilling, machine maintenance, guarding pipeline, and so on.45 Over time, the children of the first generations of workers also constituted a significant percentage of the workforce. As of 2001, around ten thousand of a total of seventy thousand workers of the Zhongyuan oilfield had obtained their jobs as children of existing employees. By 2002, Sinopec and CNPC subsidiaries had formally ended the policy of providing jobs and other social services to the children of existing workers. Understandably, these farmers and temporary workers, along with the most senior permanent workers who broke ground in those oilfields, were the first ones subject to various incentive systems for xiagang as discussed earlier. At the point of their first departure in the early 1990s, local economic conditions were generally rosy, individual decisions to xiagang voluntary, the severance packages generous, and superiors ready with verbal promises of support if things didn’t work out. By the late 1990s, the remaining peripheral, non-permanent workers faced compulsory discharge en masse or retirement pressures with minimal social welfare provisions. On the other hand, the pecuniary terms of implicit guarantees of the more recent cohorts of discharged workers vary dramatically from those of their predecessors from ten or more years ago—typically higher in nominal terms—thus inviting mobilization by the latter to extract retroactive remuneration.46 A long-time staff of the State Council confirmed my observation: “Yes, we have seen a multi-generational effect among the laid-off workers, who have run out of their severance compensations and feel that the current [higher] level of compensation is unfair. They are the ones leading the protests.”47 The following two stories of protests illustrate intergenerational grievances.

Story One: Sources of Everyday Protests Place and Time: Dongying, Shandong, home of China’s second largest oilfield, Shengli, April 2001.

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A band of about a hundred women in their late-forties to sixties mounted peaceful protests in front of the Shengli Oil Bureau, every morning until 11 a.m., slowing traffic and asking drivers to redirect their route—a Shandong equivalent of “Honk if you agree!” in America. The old ladies wore red headbands and ribbons pinned to their chests, “Give me back decades of blood and sweat money!” (Huan wo jishinian xuehan de qian), “Fighting for the Truth!” (Wei zhenli er fendou), or “Persistence is victory!” (Jianchi jiu shi shengli). The last slogan echoes the name of the oilfield, suggesting that the tradition or the spirit of the oilfield pioneers rests with the protestors, not the current management. The old women were generally in high spirits, and the police did not intervene. However, in the adjacent Shengli Square, a battalion of riot police or local state militia (no PLA insignia) conducted exercises at the same time . . . clearly a show of force by the authorities. The old women themselves fell under the “family member” (jiashu) category of unskilled workers, who had worked mainly in public works, construction, digging, and so on for decades. Shengli originally started with a few hundred soldiers, but eventually they brought in over thirty thousand family members. They’d been discharged without receiving anything. I asked them, “For whom are you protesting?” They said, “For ourselves!” But a bystander explained to me that they were also protesting on behalf of their men who feared being beaten up if they had shown up themselves. They wanted the Oil Bureau to make compensation to reflect the rise in living costs and better terms of severance packages of the past two years. Their men had received one-time severance fees in the early-to-mid1990s, which seemed plenty back then, but proved inadequate over time. They also lost coverage on medical and other benefits. The severance fee was calculated as follows: CNY53/month × 12 months/year = CNY636 per year employed. Someone who had worked at Shengli for thirty years would have received CNY19,080. Comparing these fees to rates of CNY3,000–4,000 per year employed given to recent xiagang or neitui workers, the older workers could make a strong case for unfair treatment even accounting for inflation. Oil Bureau personnel officials complained that while the one-time cash settlement was meant to last until the ex-workers reached retirement age, at which time the national pension system would hopefully be in place, many ex-workers squandered that sum on luxuries, speculative activities, or investing in small enterprises that went bust in two or three years. Evidently, they had expected the SOE to continue guaranteeing their survival—managers conceded that individually and privately they might have not discouraged, if

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not actually instilled, this expectation to expedite the workers’ acceptance of xiagang.48 This anticipation of continuing post-contract bargaining does not appear to respect any fixed time lag; the fact that a worker might have signed the termination contract only months ago doesn’t prevent him from comparing the deal offered to him to that offered to the next group of workers on the way out and mobilizing to demand parity.

Story Two: When Workers Successfully Make Demands Place and Time: Luoyang, Henan, home of one of China’s largest refineries, Luoyang Petrochemicals, June 2002. At Luoyang refinery, compulsory implementation of workforce reduction measures including maiduan gongling and neitui have forced over one thousand workers out of their jobs. Last year, maiduan gongling workers protested when wages rose subsequent to their contract termination. The refinery caved in and provided a partial settlement. A company official predicted gleefully, “They will be back . . . with the next policy adjustment in layoff compensation.” Meanwhile, massive layoffs threatened to break the financial back of the ancient imperial capital of Luoyang. Henan is not a wealthy province. The local government had withheld payment of the full amount of unemployment compensation, which was barely CNY200–300 per month per discharged worker. In comparison, Luoyang refinery had been paying CNY800–1,000 per month to its retirees. If the pension responsibility were transferred to the local government under new State Council and Ministry of Labor and Social Security regulations, then it would clearly be impossible to sustain that high level of compensation for retirees of the Luoyang refinery. Consequently, the current beneficiaries have expressed opposition to and lobbied behind the scenes against anticipated changes in the welfare regime. This has become a lose–lose situation for the central state and the refinery. If the social security burden were effectively transferred to the local jurisdiction, then the retirees’ dissatisfaction would become a ticking timebomb for social unrest, but if the SOE continues to pay these pensions, then its labor cost reduction objective would be effectively undermined. These stories underscore the materialistic envy and relative deprivation that drove collective actions by laid-off and retired workers. However, there is a deeper implication: workers don’t believe for a second the official ideology of “economism.”49 Their rhetoric of “golden days of socialism”— much like the Mao-nostalgia of the late 1980s and 1990s that did not intend so much to bring about a backtracking to Maoist politics as to signal popular discontent with present-day corrupt politicians—attacked that top–down ideology, even as their practical strategies and demands aimed

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to solicit limited concessions. While Anita Chan, Ching Kwan Lee, Hung and Chiu, and Guang (chapters in this volume) and others have focused on the ideal image of socialism as the reference point for claims made by workers against the enterprise and the government, my earlier analysis urges caution in taking the evocations of socialist norms at their face value.50 In short, workers neither bought into the new norms advocated by Beijing and its local propaganda and trade union representatives, nor adhered to the past utopian ideal. In actuality, workers made overwhelmingly practical demands based on what they perceived as the likely parameters of the firm’s resources. At the same time, the language and presentation of their demands drew on past symbolic framing resources to appeal to potential allies among managers or workers.

Explicit Contracts versus Implicit Assurances The riots in Daqing Oilfield and Liaoyang Petrochemicals in March 2002— involving thirty thousand–fifty thousand protesters over a period of over a month—may have constituted the biggest and longest sustained autonomous labor movement in post-1949 China. What appeared to be at stake were implicit supports that the enterprise might or might not have offered the ex-workers, but which they certainly expected. Retired workers accused the Daqing Oil Bureau of reneging on an earlier promise to pay their heating bills, and of demanding that they make new, large annual payments to remain covered by the company’s medical and old-age insurance schemes.51 Most significantly, some employed Daqing workers joined the protest demonstration two weeks later after their mandatory contribution to their pension plans was tripled. Eric Eckholm of The New York Times reported that workers felt “cheated and misled” by managers who warned them of imminent corporate bankruptcy and the likelihood of massive layoffs with little or no compensation. Facing such prospects, more than fifty thousand workers took severance offers of up to CNY4,000 each per year of service in December 2000.52 Since then, these ex-workers did not find new employment, and the buyout sums began to look precarious in the face of poor job prospects. The workers’ view (given later), followed by a public statement from the management, showed a discrepancy unaccountable by the formal, explicit terms of the contract: “We’ve discovered that there’s a big difference between what we were promised and what we’ve been given,” said Ms. Liu, who spoke nervously after receiving a phone call from a reporter. “The managers were very persuasive and convinced us this was the best deal we could get.”

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Two dynamics of mobilization deserve highlighting: First, ex-workers framed protests around violated socialist norms at least partly in order to appeal to those workers precariously holding on to their jobs. This framing blurred the line between the current employees and ex-employees, by drawing the latter’s attention to the managers’ lack of credibility and the violation of the basic social contractual principle guaranteeing their future employment. By placing anxieties and pressures on managers and excolleagues in the firm, protestors aimed to contend and blur the new organizational boundary of the firm and the battle line between privileged insiders or fence-sitters and outsiders. Second, the concrete claims made by workers were grounded in both explicit and implicit contractual terms. The labor termination contracts that were shown to me did not contain guarantees for continual provision of utilities, and they did contain clauses denying further medical coverage. If we do not take the implicit claims seriously, then one can hardly understand why workers could have any leverage at all given that they did voluntarily sign a legally binding document, did collect the full amount of their severance payment, and do not legally deserve to have free heating or job offers for themselves, much less for their children. Even more importantly, and unlike peasants defending moral economic values that the community as a whole acknowledged, ex-workers have no specific and collectively determined alternative yardstick as to what the “best offer” by enterprises should have been. The earlier stories reveal considerable complexities in the politicization of class relations in response to SOE reform.53 We observe cleavages among workers of different status under the former socialist employment regime, and of different time and conditions of exit from the “iron rice bowl”; in short, the composition and motivations of the activist “working class” are far from homogenous.54 Applying Charles Tilly’s55 typology of collective claims—competitive, reactive, and proactive—the patterns of mobilization mentioned earlier would seem to overlap these types. For example, while framed in the language of their former rights and privileges under socialism (reactive), the workers advanced claims in direct response to new institutions that made the use of state-owned resources competitive between the last and present generations of laid-off workers, and between

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the core and noncore parts. One can even argue that the workers’ claims are proactive since their job losses represent direct outcomes of the central state’s new demand on profits.56 This interpretation is contrary to the conventional view of workers’ protests as essentially reactive.

Fragmentation of the Managerial Class and Cross-Class Alliances One would have expected workforce reduction measures to generate discontent among the laid-off workers, yet I found a much broader scope of dissatisfaction. The central reality is that the managerial class is as divided as the workers. Managers of several oilfields and refineries, as well as Beijing bureaucrats, have voiced a common concern that the resistance to the new formal institutions would not fall along any neat “class lines,” such as the division between manager and workers. Instead, SOE employees will identify their fate and take common actions in response to structural tensions between the core and noncore part. Typically, both the managers and workers of the noncore part felt that they had been assigned to a dismal future, and that their counterparts in the core part were at fault for exploiting their weaker position. For instance, the following event took place in Chongqing in 2001: Two managers, who had shared the same work unit and rank for many years, were assigned separate fates with restructuring. During a heated quarrel over the thorny issues of restructuring, the manager of the corelisted company haughtily said to his counterpart at the noncore-unlisted Oil & Gas Bureau: “You are truly impotent (meiyong)! Why do you continue to have so many problems?” The latter lost his cool, retorting that his “problems” were no more than the historical legacy of socialism—for which both managers must share the blame—compounded by the new contractual relations that institutionalized the core part’s exploitation of the noncore. A fistfight ensued during which the defender of the Bureau’s reputation scratched “to a bloody mess” the face of his privileged ex-colleague. At the same time, outside their office building, out in the famed fertile gas fields of Sichuan, noncore workers mounted malicious attacks on the personnel and equipment of the core company, waging an ongoing campaign of silent non-cooperation and outright sabotage.57

Managers secure in their positions often expressed criticisms of the corporate headquarters’ specific instructions for layoffs, and even cynicism toward the efficiency of these measures. Managers of both core and noncore parts harbored mixed feelings toward the central state’s action to strip

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them of the autonomy and incentives they had enjoyed under the era of decentralization in the 1980s and 1990s. A reversal of managerial autonomy has lead to within-firm passive compliance and a lack of motivation for innovation, and polarization of the managerial class within firm and across similarly situated firms in the industry. Furthermore, increasing brain-drain among mid-level technocratic managers may lead to rising conservatism and politicization of the remaining, arguably less capable or less mobile managers as they seek to consolidate their tenure within the new firm. Regional and inter-firm variations in the degree of fragmentation and resulting managerial attitudes and strategic orientation reflect differences in the level of “can-do” spirit in the past era of greater managerial autonomy, such as success in independently pursuing enterprise reform and taking advantage of local market opportunities. Generally speaking, in oilfields with a history of autonomy but which made little headway in local institutional innovation, managers were characterized by a passive resentment toward obeying central orders and ready acceptance of financial control from the corporate headquarters in Beijing. For them, there is very little difference between centralized governance under the socialist plan and under the Western corporate form. For example, powerful constraints have kept the Xinjiang Oil Bureau (XJOB) in Karamay from experimenting with enterprise reform. The Oil Bureau is expected to maintain social stability in a hinterland region scarred by ethnic tensions between the Han settlers and the Uyghurs, while extracting oil and gas in a vast territory that nurtures few other industries.58 XJOB had implemented a “clean restructuring” in faithfully observing the guidelines in assigning assets to core and noncore parts.59 Specifically, it created a core part that guaranteed an efficiency standard of “one person producing 1,000 tons of oil.” Since the managers had put all their chips on the table, they found themselves with little margin for independent maneuver against the financial department of the corporate headquarters. Consequently, they exhibited passive compliance. A top financial officer of the listed company curtly explained his reduced motivation since restructuring: “Look, I am just a henchman for PetroChina. I do what I am asked to do, no more, no less. I have no reason to be creative, to take entrepreneurial risks, to be concerned about the implications of WTO, etc. As long as my oil can be sold domestically, I need not waste time thinking about a vision or plan. Since our profitability is unrelated to the enterprise’s future [the headquarters take all the profit], and since those [expletive] have promised but not given me a real wage increase, I have to say that I am highly

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unmotivated. Compared to the old contract responsibility system, under which the oilfield was operated as a profit center, the current system benefits Beijing at our expense. The oil bureau and the local economy are screwed, but what do I care? I am in the listed part . . .”

In SOEs with some early successes in local institutional experimentation, managers saw the 1998–2000 top–down restructuring as an “ambush” or “preemptive strike” on their equally valid initiatives. They tended to feel strong resentment toward Beijing’s low opinion of their efficacy as revealed by the top–down approach to restructuring. Consequently, they acquired a fatalistic sense of the futility of individual actions that tainted their future willingness to take risks and local initiatives. Zhongyuan Oilfield had served as a role model of institutional innovation when it belonged to the upstream administrative company CNPC. In the mid-1990s, managers of Zhongyuan had experimented with an original reform framework of “internal marketization” (neibu shichanghua) that aimed to promote efficiency gains by allowing for some degree of competition among similar units within the company.60 For these local innovators, the 1999–2000 restructuring has eradicated any efficiency and competitive gains from this earlier system of internal markets. They called Beijing’s reform a “regression” (houtui). Similarly, in the late 1990s, top managers in Daqing had unsuccessfully spearheaded an alternative proposal for restructuring and listing some of its prized assets in domestic and international stock markets, based on the oilfield’s clear superiority among all Chinese oilfields in efficiency and economy of scale. Having been thwarted in its ambitions by cautious politicians and bureaucrats in Beijing, a high-level official of Daqing expressed the feeling of subordination: “It’s true that the factory manager feels like a floor supervisor or foreman, lacking in autonomy or room for initiatives . . . [this situation has created] visible inefficiency, but there’s nothing we can do under the centralized system.” In contrast, a handful of oil and petrochemical enterprises have been spared from the complex and contentious relations emerging from restructuring, due largely to the presence of one or more of the following beneficial conditions: (1) recent establishment (within the past ten years); (2) location in a dynamic metropolitan area that provides a market for its goods and exit opportunities for its workers; (3) a recent history of profitability and a fat reserve of retained profit; (4) and/or early restructuring and introduction of effective corporate governance. In the Sinopec system, such fortunate enterprises include the new refineries in Fujian and Ningbo, rejuvenated petrochemical plants in Nanjing, and above all, Shanghai Petrochemicals, an entity that meets all of the last three criteria.61 Managers from these financially and organizationally superior subsidiaries tend to

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show less ambivalence toward restructuring and a haughty attitude toward their counterparts in struggling oilfields and refineries. A senior manager of Shanghai Petrochemicals stopped just short of characterizing discontented managers elsewhere in the Sinopec system as crybabies, excoriating their history of failing to innovate and proposing that “autonomy should be earned, not given administratively.”62 At a time when the central state policy calls for close collaboration among subsidiaries in the NOCs, one can easily imagine how the actual intra-corporate culture of discrimination among the managerial class could be quite inflammatory in the minds of less fortunate managers.

Conclusion This chapter has taken the premise that pro-market or efficiency-driven enterprise reform is a state-building project, and success or failure in legitimating this project produces variations in workers’ activism. Workers’ attitudes and actions are not deducible from the material circumstances of the enterprise and individual abilities, but reflect the history of the enterprise’s expansion and recruitment strategies, as well as more proximate reform legacies, such as variations in the terms of termination contracts. Workers also draw on neo-traditional ties and other personal resources such as networks for coping with change, suggesting that while a worker’s record of political performance might have lost some of its utility as a buffer against policy shocks or as an informal redistributive mechanism within the work unit, it may have taken on new importance as a selection mechanism for discharging workers and endowing some with the initial exit capital. Affirming findings by Cai Yongshun, Eva Hung and Stephen Chiu, William Hurst, Li Peilin and Zhang Yi in this volume, I would suggest that neo-traditional ties have translated into short-term bargaining chips in different ways for workers kept by the factory and those released by it. For those remaining, paradoxically, social capital and patron–client ties from the danwei might matter even more as they continued to bargain with sympathetic managers to secure a relatively better exit path. The deals they struck, in turns, shape the demands and mobilization strategies of laid-off workers. In short, the classic exit, loyalty, and voice options63 should be examined systematically for various subsets of SOE workers. As Dorothy Solinger proposes in her chapter, further research should focus on the complex modes of cooperation and resistance within and outside of the firm, encompassing exchange relations between managers, workers, and local industrial bureaus. The older laid-off workers might first send

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out their wives to protest on their behalf, but then they might go to the streets themselves when their ex-colleagues in the factory decide to join in. Inactions and actions both need to be considered, not as compartmentalized and exclusive behavioral patterns but in relation to one another as strategic options. Just as the central and local state exhibit heightened capabilities to put up different strategies in reducing the frequency and impact of workers’ resistance—as Cai Yongshun illustrates in his chapter—workers too deploy a variety of measures in response to the broader context of somewhat disjointed shifts in the ideological, legal and policy frameworks identified by Mary Gallagher and Lei Guang in this volume. I have argued for keeping in view at all times the managers’ divided allegiances, which has been largely absent from conventional studies. Managers respond both to firm-specific legacy factors as well as to the new financial principles of control that tend to snuff out their fledgling sense of self-efficacy and entrepreneurialism nurtured by the previous contract responsibility system. The cross-class analysis adds to our understanding of mobilization within and outside the bounded entity of the SOE. In light of Beijing’s interest in creating profitable firms out of the dysfunctional socialist work units, our analysis needs to be sensitive to the strategies and counterstrategies through which the small minority could be co-opted to help the state hold at bay the large majority that faced a dismal future and has serious potential for disruption. Consequently, workplace politics show a range of strategic interactive outcomes involving both managers and workers against the state, state and workers against managers, factionalism within the managerial class or among state agencies, and even workers oppressing other workers. Comparative perspective might suggest that the mobilization of Chinese xiagang workers would likely lead to nowhere. Piven and Cloward64 argue that poor people organize and disrupt mainly when they see a possibility for mass-organization that could compel elected officials to react to their grievances. Chinese workers cannot expect the same, particularly since managers and local cadres who traditionally played the surrogate role of elected officials have precious little resource and policy autonomy to provide an alternative to the restructuring schemes demanded by Beijing. Furthermore, if working-class identity takes form only after the bouts of defiance have subsided and institutionalized political opposition has risen in their place, what chances do Chinese workers have for securing a foothold in future policy debates? In the case of the PRC, where marketization has not been accompanied by regime change, the party-state continues to serve simultaneously as the exclusive advocate of workers, the super-ego of managers, and the regulator and owner of productive assets nominally under its name. The monopolization of formal institutions by the party-state results in informal

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dynamics that take on complex functions of collective representation, conflict mediation, and resistance. Considered along explicit–implicit and formal–informal dimensions, authoritarian institutional reform is costly, as workers’ inactions and actions have created losses in revenue, social cohesion, and political control. Mindful of these losses, the state might eventually move toward giving managers and workers more autonomy and control over the terms of their work and of exit from their firms. In this sense, it would be analogous to Beijing’s urgent advocacy of expanding village elections as a release-valve for pent-up peasant discontent.

Notes 1. I wish to thank Daniel Buck, Glenn Dudbridge, Rachel Murphy, Rana Mitter, Vivienne Shue, Eddy U, and other participants of the China Research Seminar of the Institute for Chinese Studies at the University of Oxford, February 5, 2004, who gave me helpful feedback on the definitive formulation of ideas in this chapter. An earlier version of this chapter has benefited from comments and encouragement from Richard Baum, Kenneth Foster, Thomas Gold, William Hurst, Xin Liu, and Jaeyoun Won among others at the 2003 Annual Symposium in Chinese Studies, “The Question of Violence,” March 7–8, 2003, Berkeley, CA. Dorothy Solinger graciously offered me corrections and comments during the workshop on “Globalization and the Workplace” held at St. Antony’s College, University of Oxford, October 27–28, 2006. 2. See Marc J. Blecher for the hegemony of the market as interpreted through the state. Blecher, “Hegemony and Workers’ Politics in China,” The China Quarterly, no. 170 (June 2002), pp. 283–303; also see Cai Yongshun, “The Resistance of Chinese Laid-off Workers in the Reform Period,” The China Quarterly, no. 170 (June 2002), pp. 327–344. 3. Ching Kwan Lee, “The Labor Politics of Market Socialism: Collective Inaction and Class Experiences among State Workers in Guangzhou,” Modern China 24: 1 (1998), pp. 3–33 and 15; and “From Organized Dependence to Disorganized Despotism: Changing Labour Regimes in Chinese Factories,” The China Quarterly, no. 157 (March 1999), pp. 44–71. 4. Neil Fligstein captures this structural opportunity for social contention with the term “markets as politics” in “Markets as Politics: A Political–Cultural Approach to Market Institutions,” American Sociological Review, 61: 4 (August 1996), pp. 656–673. 5. See “Symposium: Poor People’s Movement,” Perspectives on Politics 1: 4 (December 2003). 6. Dorothy Solinger, “Path Dependency in the Transition to Unemployment and the Formation of Safety Nets in China,” paper presented to the ninety-ninth Annual Meeting of the American Political Science Association, Philadelphia, PA, August 28–31, 2003, 4.

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7. Ibid., 19. Against the grain of over-generalization, Solinger carefully delineates various streams of laid-off workers so as to portray a disaggregated picture. See “Why We Cannot Count the ‘Unemployed’ ” The China Quarterly, no. 167 (August 2001), pp. 671–688. 8. Lee’s explanation of the ascendancy of the despotic regime is functionalist, correlating to the increased demand on managerial capacity to enforce wage differentiation, punitive work rules, massive layoffs, and related property rights redistribution, such as housing reform. Lee, “The Labor Politics of Market Socialism.” 9. Mary Gallagher, “Reform and Openness: Why China’s Reforms Have Delayed Democracy,” World Politics 54 (April 2002), pp. 357–359. 10. For further examples, see Anita Chan, China’s Workers under Assault: the Exploitation of Labor in a Globalization Economy (New York: Routledge, 2001); and “Revolution or Corporatism? Workers and Trade Unions in PostMao China,” The Australian Journal of Chinese Affairs, no. 29 (January 1993), pp. 31–61; Dorothy Solinger, “The New Crowd of the Dispossessed: The Shift of the Urban Proletariat from Master to Mendicant,” in Peter Gries and Stanley Rosen (ed.), State and Society in 21st Century China: Contention, Change and Legitimation (New York: Routledge, 2004), pp. 50–66. 11. Zhou Xueguang, “Unorganized Interests and Collective Action in Communist China,” American Sociological Review, 58: 1 (February 1993), pp. 54–73. 12. Yang sees managers as more inclined to promote top–down statist social policies than the bottom–up corporate interests of workers. For example, the bonus system has become a point of contention—the state acts to bind managers whom they suspect as prone to chronically overpaying workers, while workers don’t appreciate the tight budget under which the managers operate and feel that the sideline activities contributing to their bonuses were hardly worth the managers’ diverted attention from the core issues of firm survival. Yang also notes that dependency relations, as long as they were confined to the cellular structures of the SOE, produced weak impetus for civil society formation. However, she leaves open the possibility that successful implementation of external shareholding and internal wage differentiation might undermine working class solidarity. Mayfair Mei-hui Yang, “Between State and Society: The Construction of Corporateness in a Chinese Socialist Factory,” The Australian Journal of Chinese Affairs, no. 22 (July 1989), pp. 31–60 and 9. 13. Mary Gallagher and Junlu Jiang, “China’s National Labor Law: Introduction and Analysis,” Chinese Law and Government, 35: 6 (November–December 2002), pp. 3–15. 14. The chapter by Eva Hung and Stephen Chiu in this volume represents an example. 15. Andrew Walder, “Workers, Managers and the State,” The China Quarterly, no. 127 (September 1991), pp. 467–492. 16. Ruan’s analysis of large N survey data from Tianjin shows that a high level of social provision by an enterprise tended to enrich the interpersonal relations of its employees, and contribute to their status in the “discussion networks” that related them to superiors and Party members. Danching Ruan, “Interpersonal

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17.

18.

19.

20.

21.

22

23.

24.

25.

26.

Kun-Chin Lin Networks and Workplace Controls in Urban China,” The Australian Journal of Chinese Affairs, no. 29 (January 1993), pp. 89–105 and 102. Kevin O’Brien, “Neither Transgressive Nor Contained: Boundary Spanning Contentions in China,” Mobilization: An International Journal, 8: 1 (2004), pp. 51–64. Also see Jeanne Wilson, “Labor Policy in China: Reform and Retrogression,” Problems of Communism (September–October 1990) on trade unions’ role in labor movements in the 1980s. Elizabeth J. Perry, “Shanghai’s Strike Wave of 1957,” The China Quarterly no. 137 (March 1994), pp. 1–27 and 14; and Elizabeth Perry and Li Xun, Proletarian Power: Shanghai in the Cultural Revolution (Boulder, CO: Westview Press, 1997). She states that “due to their different material circumstances, the new inequalities among workers in the reform era have brought about divergence experiences and different degrees of consent.” Lee, “The Labor Politics of Market Socialism,” p. 25. Andrew Walder, “Property Rights and Stratification in Socialist Redistributive Economies,” American Sociological Review, 57: 4 (August 1992), pp. 524–539. Adopting a path-dependent perspective, Solinger identifies a “proclivity to favour the better endowed” enterprises in unemployment insurance programs. Solinger, “Path Dependency in the Transition,” p. 19. I am grateful to an anonymous reviewer of this chapter, whose suggestions on the importance of hukou have been incorporated here. For a classic analysis of resource dependency, see J. Pfeffer and G. Salancik, The External Control of Organizations (New York: Harper and Row, 1982). Tiejun Cheng and Mark Selden, “The Origins and Social Consequences of China’s Hukou System,” China Quarterly, no.139 (September 1994), pp. 644– 668. Looking at the entire period of strict CCP urban controls from the late 1950s to the 1980s, Davis observes that the periodic loosening of hukou and danwei restrictions by officials keen to meet economic objectives had the effect of altering career trajectories for middle-level managers. See Deborah Davis, “Social Class Transformation: Training, Hiring and Promoting Urban Professionals and Managers after 1949,” Modern China 26: 3 (July 2000), pp. 251–275. Dorothy J. Solinger, “The Floating Population in the Cities: Chances for Assimilation?” in Deborah Davis, et al. (eds), Urban Spaces in Contemporary China (New York: Cambridge University Press, 1995), pp. 113–139; the chapter by Li Peilin and Zhang Yi in this volume points out the divergent fate of laid-off workers and urban-bound migrants in recent years, with the incomes of the former following a downward trend, while those of the latter are rising. Dorothy J. Solinger, “China’s Urban Transients in the Transition from Socialism and the Collapse of the Communist ‘Urban Public Goods Regime,’ ” Comparative Politics, 27: 2 (January 1995), pp. 127–146. Yang also finds a mix of political status and socioeconomic markers in dividing workers in her printing factories, particularly along the lines of “young and old . . . leaders and led . . . [and] skilled and unskilled . . .” Yang, “Between

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State and Society,” p. 57. Unlike Perry and me, she sees these divisions as weakening worker solidarity. 27. Lee, “The Labor Politics of Market Socialism,” and Zhou Xueguang, “Unorganized Interests and Collective Action.” Examples of inactions include work stoppage, egalitarian wage redistribution, absenteeism and diversion of labor to sideline activities, and abuse of housing privileges, which may be analogous to the “weapons of the weak” deployed by peasants. James Scott, Weapons of the Weak: Everyday Forms of Peasant Resistance (New Haven: Yale University Press, 1985). 28. Fieldwork conducted in 2000–2002 covered twelve oilfields and refineries in seven provinces. For most cases I interviewed subjects in at least seven of the following corporate offices: (1) CEO/president, (2) finance, (3) labor and human resources, (4) planning, (5) asset management, (6) enterprise reform, (7) exploration and development teams (duiwu), (8) refinery and petrochemical units (chechang), (9) marketing and distribution, (10) geology, and (11) neighborhood governance and social services, and so on. Also in the majority of cases, I interviewed counterparts at the core- and noncore-unlisted parts. The fieldwork was supported by the Fulbright-IIE Scholarship and the David Boren NSEP Graduate International Fellowship. 29. Neil Fligstein, The Transformation of Corporate Control (Cambridge: Harvard University Press, 1990). 30. See table 3A.2 in appendix for details on the highly unequal distribution of assets and personnel for core and noncore parts. 31. For example, units responsible for the extraction of crude oil, transport units, and retail stations were annexed by the core part, whereas exploration teams, geology institutes, and social services lacked obvious profit potentials and were placed in the noncore part. 32. For an interpretation of industrial reorganization in the late-1990s as a “disembedding” project of the central state, see Kun-Chin Lin, “Disembedding Socialist Firms as a Statist Project: Restructuring the Chinese Oil Industry 1997–2002,” Enterprise & Society: The International Journal of Business History, 7: 1 (March 2006), pp. 59–97; and “Corporatizing China: Reinventing State Control for the Market,” PhD dissertation, University of California at Berkeley, 2003. 33. The Labor Law of 1997 delivered the legal go-ahead for the broader statist agenda to shed its social responsibilities toward workers. See Gallagher and Jiang, “China’s National Labor Law.” 34. From my field observations, this ratio of ten Chinese workers to every worker in a similarly scaled but efficient foreign production unit is fairly uniform across Sinopec and CNPC operations—keeping in mind, and this is far from a trivial consideration, that labor cost in China is significantly lower. Their monthly wage is only about CNY1,000 or about USD125. In fact, many managers expressed their skepticism at Beijing’s and foreign investors’ preoccupation with layoffs as the most expedient way to cut costs, arguing that labor expenditure constitutes only a minor part of the overall cost structure.

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35. All numbers concerning layoffs and costs of compensation cited in the chapter are estimates or rounded-off figures provided by the interviewees. Given its lean workforce, the core part has faced less pressure in labor reduction for cost control. Anticipating this unequal outcome between the core and noncore, the president of Daqing Oilfield, Mr. Su Shulin, tried to get as many workers into the listed part as possible; in the end one-third or around 90,000 out of 270,000 employees were placed in the core-listed company, or about 10,000 more than PetroChina initially desired. 36. The entire Sinopec corporation retained 319 teams. 37. For example, for its second largest oilfield, Zhongyuan, Sinopec had established a target for the workforce of the noncore part of twenty-eight thousand workers by the year 2005, down from forty-seven thousand at the end of 2001. 38. For a fine study of various layoff policies in the late-1990s, see Hong Yung Lee, “Xiagang, the Chinese Style of Laying Off Workers,” Asian Survey, 40: 6 (June 2000), pp. 914–937. 39. If the number of xiagang workers were counted toward the national unemployment rate in China, it would up the rate by another 5 percent or so. Interview with a State Development Planning Council staff, Beijing, May 2002. 40. The terms for this deal were slightly more generous than the industrial average—Luoyang Petrochemicals paid a rate of two-and-half months of current salary, or around CNY3,080, per year employed. 41. Specifically, Zhongyuan had subjected 9,744 labor contracts to maiduan and 6,733 workers to neitui. In my estimation, the total expenditure might actually be higher for political reasons. The provincial government of Henan had been keen to cushion the socially disruptive effects of layoffs, compelling the oilfield to ensure that over nine thousand ex-workers continued to get pensions, medical care, living standard subsidies, and so on. Of these workers, three thousand had found new jobs as of mid-2002. 42. See table 3A.3 in the appendix for a summary of costs. 43. For some estimates of local and central contributions, see Solinger, “Path Dependency in the Transition,” p. 17. My interview with an officer of the Ministry of Labor and Social Security revealed that, after delegating to the provinces the task of amassing funds for a social security net for unemployed and retiring workers, the central state found itself with only 20–30 percent of the expected pension obligations in 2001. Interview in Beijing, June 2001. Local states were either unable or unwilling to collect contributions from SOEs under their jurisdiction, forcing the central state to devise an alternative plan of raising part of the funds by taking 10 percent of all new public offerings starting in 2002. Statements by Deputy Minister of Finance Lou Jiwei at the NBER-CCER Conference, Beijing, June 22, 2001. 44. I am unaware of any study that looks into this sociological layering of stateowned enterprises, and regrettably I am not able to contribute to addressing this lacuna as I did not gain access to comprehensive records of the workers’ initial terms of employment and subsequent revisions or updates.

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45. As of 2001, the noncore Shengli Oil Bureau had 234,000 workers, of which 195,000 were formal workers with formal labor contracts with the oil bureau and the rest were “collective” (jiti) workers who signed temporary contracts with local employment or labor agencies. The compensation for temporary workers was channeled through the Labor Affairs Fund (laowufei), by-passing the formal wage bill. Laowufei has no upper limit on expenditure, being a quasi-enterprise, quasi-governmental body—an example of X.L. Ding’s “institutional amphibiousness.” X.L. Ding, “Institutional Amphibiousness and the Transition from Communism: The Case of China,” British Journal of Political Science, no. 24 (1994), pp. 293–318. 46. It might seem surprising that the earlier, more voluntary generation of laid-off workers would feel relatively deprived; however, it makes sense when one considers the following differences between the earlier generation and the current one: (1) their exiting option was voluntary, (2) those who chose to exit were often the less or no longer able, (3) the scale of xiagang was far smaller, and (4) the SOE typically continued to provide non-pecuniary subsidies. I am inclined to believe that given the coercive, severe, and widespread nature of recent workforce reduction, national politicians and top managers of the oil corporations felt that a nominally higher compensation may be necessary to avoid overwhelming resistance. 47. Interview in Beijing, May 2002. 48. Interviews of managers at Daqing, Shengli, Xinjiang, Zhongyuan, 2001– 2002. 49. See Guang Lei in this volume. A good indicator of the ex-workers’ cynicism is the commonplace accusation of corruption directed at local cadres and SOE managers. See Feng Chen, “Subsistence Crises, Managerial Corruption and Labour Protests in China,” The China Journal, no. 44 (July 2000), pp. 41–63. During the Liaoyang protests, ex-workers accused cadres and managers of pocketing the money intended for their welfare fund. Eva Cheng for Green Left Weekly, April 24, 2002. 50. Lee identified three categories of variations in workers’ attitude—“socialism betrayed,” “socialism transformed,” and “socialism liberated”—with the invocation of socialist norms and angry insistence that managers and officials should adhere to them most prevalent among workers with little recourse against being laid-off. Lee, “The Labor Politics of Market Socialism,” p. 15. 51. Eva Cheng for Green Left Weekly, April 24, 2002. 52. Ex-workers admitted that these sums seemed large at the time and were higher than the national norm in such situations. Erik Eckholm, New York Times, March 19, 2002. 53. Local governments have grown accustomed to mild everyday protests. Interview in Beijing, May 2002. 54. This observation dovetails past findings of Elizabeth Perry, Shanghai on Strike: The Politics of Chinese Labor (Stanford: Stanford University Press, 1993), and Andrew Walder, Communist Neo-traditionalism (Berkeley: University of California Press, 1986).

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55. Charles Tilly, From Mobilization to Revolution, (Reading, MA: AddisonWesley, 1978). 56. For a review of recent treatment of this topic in the rural context, see Kevin O’Brien, “Collective Action in the Chinese Countryside,” The China Journal, no. 48 (July 2002), pp. 139–154. 57. Interview at the Xinjiang Oil Bureau, Karamay, Xinjiang. May 2001. 58. One manager disclosed the particular incentive structure to ensure that enterprise reform does not compromise social order. As recorded in his career dossier, the oil bureau chief loses “points” whenever a riot or protest or other social unrest involving ethnic issues occurred in his jurisdiction! 59. Other oilfield bureaus (i.e., Daqing, Zhongyuan) exploited the information asymmetry to hoard significant valuable assets, such as 500,000–1,000,000 tons of oil production in their noncore parts. A manager of XJOB regretted lacking the foresight or wile in devising this “insurance policy.” 60. The idea was to break down overly self-sufficient units (e.g., exploration teams owning a fleet of cars) by re-aggregating assets along functional lines (cars, technical services, purchasing, marketing, etc.). These functional companies gained equal status under the Oil Bureau, and were encouraged to compete against each other for internal contracts. Some of these functional units had undergone mergers and acquisitions, cutting the number of second-tier units by half! Each unit was compelled to conduct feasibility studies and independently lobby the oil bureau for contracts, which actually generated significant wastes of resources. 61. Interview in Shanghai, June 2002. 62. Ibid. 63. Albert Hirschmann, Exit, Voice, and Loyalty (Cambridge: Cambridge University Press, 1971). 64. Frances Fox Piven and Richard A. Cloward, Poor People’s Movements: Why They Succeed, Why They Fail (NY: Pantheon Books, 1979).

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Appendix Table 3A.1

Working class fragmentation and collective actions Action

Mass mobilization & campaigns during the Maoist era Political status

c.

Neo-traditional work units

Autonomously organized protests and riots

f.

Socioeconomic d.

b.

a.

e. “Despotic” shop floors

Inaction Y-axis = collective behavior, X-axis = types of cleavage Examples from the literature of dynamic strategic shifts of workers: a. Rebellions, sabotage, or work stoppage based on immiseration of subsistence crisis (Chan 1993, Chen 2000). b. Lineage and places of origin ties leading to political allegiances (Perry 1993, 1994). c. Regulated political mobilization through activist networks (Walder 1986, Yang 1989). d. Activists joining protests with the unspoken agenda of alerting their patrons of their shifting allegiance (Walder and Gong 1993). e. Ex-activists conforming to material incentives (Blecher 2002, Lee 1998). f. Protesters driven by economic concerns co-opted into political movements (Perry and Li 1997).

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Table 3A.2 Major organizational characteristics of subsidiaries of national oil corporations Organizational characteristic

Core-listed (“oil companies”)

Noncore-unlisted (“oil bureaus”)

Asset profile

Of total profitable assets

Of total profitable assets

Labor cost profile

Of total labor force

Of total labor force

Market orientation

National or international

Local

Organizational goal

Profitability and cost reduction

Stability and restructuring

Sources of revenue

Production and sales; dividends

Contractual earnings for services to the listed part; government transfers

Financial principles

Production units as cost centers; simplified, transparent, centralized accounting

Former administrative units as profit centers with legalperson status; independent accounting

Principal–agent relations

State-asset holding company as the dominant shareholder of the listed company; other shareholders, including foreign investors, do not control decisions

State-asset holding company as the sole shareholder of the noncore part; some cases of employee shareholding

Role of price signals

“Price-takers” of stateadministered prices

Set by contract with listed part

Organizational form

Highly centralized M-Form

Centralized M-Form

Source: Author’s summary from China Natural Gas and Petroleum Corporation (CNPC), Zhongguo shiyou gongye guanli tizhi gaige yanjiu (A Study of the Reform of the Governance Structure of the Chinese Oil Industry) (Beijing, CNPC, 1998).

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Table 3A.3 Approximate figures of financial outlays for workforce reduction 2000–2002 Workforce reduction as financial burdens on SOEs

Numerical reduction, as of 2002

Pecuniary terms of discharge

Net explicit cost, as of 2002

Daqing Oilfield, CNPC (core and noncore)

60,000, from 270,000

CNY4,500 per year employed for core layoffs; average of 100,000 RMB per ex-worker

CNY4 billion

Zhongyuan Oilfield, Sinopec (noncore)

16,000, from 50,000

CNY3000–4000 per year employed

CNY4 billion

Luoyang Petrochemicals (noncore), Sinopec

1800, from 5,000

CNY3080 per year employed, average of CNY240,000 per ex-worker

CNY432 million

SOE: State-owned enterprise.

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References Blecher, Marc, “Hegemony and Workers’ Politics in China,” The China Quarterly, no. 170 (June 2002), pp. 283–303. Chan, Anita, “Revolution or Corporatism? Workers and Trade Unions in PostMao China,” The Australian Journal of Chinese Affairs, no.29 (January 1993), pp. 31–61. Chen, Feng, “Subsustence Crises, Managerial Corruption and Labour Protests in China,” The China Journal, no. 44 (July 2000), pp. 41–63. Lee, Ching Kwan, “The Labor Politics of Market Socialism: Collective Inaction and Class Experiences among State Workers in Guangzhou,” Modern China, 24(1), 1998, pp. 3–33. Perry, Elizabeth, J., Shanghai on Strike: The Politics of Chinese Labor (Stanford: Stanford University Press, 1993). ———, “Shanghai’s Strike Wave of 1957,” The China Quarterly, no. 137 (March 1994), pp. 1–27. Perry, Elizabeth J. and Li Xun, Proletarian Power: Shanghai in the Cultural Revolution (Boulder, CO: Westview Press, 1997). Walder, Andrew G., Communist Neo-Traiditonalism: Work and Authority in Chinese Industry (Berkeley, CA: University of California Press, 1986). Walder, Andrew G. and Gong Xiaoxia, “Workers in the Tiananmen Protest: The Politics of the Beijing Workers' Autonomous Federation,” The Australian Journal of Chinese Affairs, no. 29 (January 1993), pp. 1–29. Yang, Mayfair Mei-hui, “Between State and Society: The Construction of Corporateness in a Chinese Socialist Factory,” The Australian Journal of Chinese Affairs, no. 22, (July 1989), pp. 31–60.

Part 2 Frames and Framing

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Chapter 4 Voices of Xiagang: Naming, Blaming, and Framing Eva P.W. Hung and Stephen W.K. Chiu

I was laid off in 1994. I had worked for this paper-making enterprise for more than twenty years. We made toilet paper. The enterprise was originally doing very well in the 80s. And then a new manager came in the late ‘80s. Once he landed here he immediately went into a joint operation with a small enterprise in Shunyi and paid 400,000 yuan to renovate the factory. At about the same time, he sent three trucks of toilet paper to a buyer in Shenzhen. That was worth some 540,000 yuan. But the buyer disappeared once he got the load. So our manager traveled to Shenzhen to find him. Of course the buyer was nowhere to be found. On his way back the manager went to Yunnan to visit his relatives. And from there he couldn’t buy a plane ticket back to Beijing, so he simply stayed in the hotel until he got one. He refused to travel even with a train sleeper! When he came back he simply said that the money was lost. “Well, the first load was the tuition fee; and the second load was to buy a lesson.” So there went the 540,000 yuan. Together with the 400,000 yuan investment to Shunyi that amounted to almost one million. And the operation in Shunyi was closed after a year. It was too expensive to maintain . . . Why did the enterprise collapse? We workers did nothing wrong. It’s all because of the leaders. What’s the fault with us workers? All we did was to do what we were told. I would say workers are always good workers. If nothing went wrong we could all get bonuses or the like. And what about the manager? He sent three trucks of papers and lost that 540,000 yuan. He didn’t bear any responsibility but merely said that that was a lesson to learn. And then he was simply transferred to somewhere else. So this is communism. The capitalists would not run things like this . . . Now I am getting old and I’m physically unfit. There are not many jobs I could do. So I am not earning any money.

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Eva Hung and Stephen Chiu And now the Communists say, here is 40,000 yuan and you are on your own. But for God’s sake, for all these years I was not working for the Nationalists or the Japanese. I was working for the Chinese Communist Party! And it’s been more than twenty years! How could they just throw us away like this and ask us to be on our own? I swear, when I am so frail and am about to die, I’ll crawl my way to Zhongnanhai and die right in front of it. Informant B-51, June 19991

“We workers did nothing wrong.” When asked how they understood their layoff experience and why the enterprise collapsed, this comment popped up most frequently from the xiagang workers that we talked to. In their view, workers are always good workers. They worked diligently for the enterprise and did what they were told to do. As they characterized themselves, they were always laolaoshishi, that is, honest and simple-minded. If the enterprise collapsed, the fault did not lie with workers because they merely worked according to orders from above. If there was overstaffing in the enterprise, that also had nothing to do with the workers. As they said, “a stone falling down from the sky could kill nine and a half managers” (tianshang diaoxia yike shitou, keyi zasi jiugeban jingli). It was the administrative ranks that were bloated, not the rank and file of workers. They therefore rejected vehemently the official discourse of jianyuan zengxiao, that is, to retrench staff and to enhance efficiency, in the restructuring of state enterprises. But it was indeed the workers who bore the brunt of this policy. A deep sense of unfairness resulted. Apparently, workers’ understanding of xiagang was and is vastly different from the state discourse. According to the sociologist C. Wright Mills, ordinary people often feel trapped in their private lives, but they are not always able to relate their “private troubles” to the “public issues” of the time: “They do not possess the quality of mind essential to grasp the interplay of man and society, of biography and history, of self and world.”2 The sociological imagination, on the other hand, is “a quality of mind that will help them to use information and to reason in order to achieve lucid summations of what is going on in the world and of what may be happening within themselves.” In this chapter, our purpose is exactly to find out how ordinary workers in contemporary China comprehend their private troubles. We are not, however, prepared to dismiss their reckonings as merely a result of being trapped in some taken-for-granted reality and, therefore, in some sense less authentic or valuable than sociological or social–scientific reasoning. Certainly we are going to find out that their visions are limited in one sense, but the way they present their points of view do offer an important way of understanding the dramatic social changes unleashed by market reforms.

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This chapter, therefore, seeks to shed light on how workers made sense of their own layoff experiences and the resulting predicaments in which they found themselves. Based on 129 in-depth interviews we did between June 1999 and November 2000 in three localities, namely, Beijing city, Mengtougou (a suburb of Beijing), and Wuhan (provincial capital of Hubei in central China), this chapter aims to interpret workers’ grievances within a larger framework of the moral and cultural repertoire that workers had built up through their changing experiences with the socialist state. State discourse on state enterprise reform pointed to labor retrenchment as the logical conclusion for enhancing efficiency and efficacy. Workers, however, thought otherwise. Xiagang workers believed that they were made redundant through no fault of their own and they invariably pointed fingers to organizational and managerial corruption as the sole cause of the enterprise’s eventual demise. We describe in this chapter how they named the culprit and blamed the enterprise or the political regime for all the misfortunes they encountered in the cultural and moral frames of the socialist project.

Naming The collapse of the enterprise has to do with Manager Wang. Before he arrived, he had an agreement with the Bureau that whether he was able to do a good job for the enterprise or not, the Bureau was to be his next destination. And of course he would want to be in the Bureau quick. So if he was unable to turn the enterprise around he would just fold it as quickly as possible so as to be transferred to the Bureau sooner. It was also the atmosphere at that time. There were many enterprises in the northeast collapsing. If the enterprise collapses without any workers protesting, that would mean something! . . . If someone could close down the enterprise in a smooth way, lay off the workers, dispatch the cadres, and transfer all others without causing any major disruption, of course he is a talented person! This is the art of leadership! And if he could do this, when he takes up office in the Bureau, what else couldn’t he manage? Don’t you find this logic amusing? So the enterprise collapsed, and Manager Wang was the perpetrator. But he became the deputy chief of the Bureau nonetheless . . . He is the scum of society. (Informant M-8, May 2000)

To most xiagang workers, being laid off is a devastating experience. Naming is the process by which xiagang workers pinpoint a specific person who inflicted this injury on them. In other words, they name a particular person whom they held responsible for the failure of their enterprise and their layoffs. In most cases, it was the manager of the enterprise who bore the

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brunt of the charges. Another worker also put the blame squarely on the managerial cadres: The style of our leadership team is also incorrect. Whoever assumed power formed a gang, whoever became the head got benefits, and could get new houses. Last year when our manager moved to another house, the furniture was all from the factory . . . This was improper. The manager didn’t even need to spend three hundred yuan, so many people going in and out of his new houses to offer him gifts. Our orders were subcontracted out to small [private] enterprises and these enterprises sent gifts to our leaders. All our works were being siphoned out, and of course all regular workers got no bonus. The factory was left idle and workers were laid off. (Informant B-9, July 1999)

Workers’ perception of xiagang is different from the perceptions of individual state enterprise workers that were dismissed in the past. In individual dismissal the affected workers tended to single out the immediate supervisor as the instigator and reasoned that their guanxi with the superior was poor. In xiagang, and in cases where the enterprise was not closed down completely, although workers were informed of their retrenchment mostly by their supervisors, they would still see the manager as the main culprit. Workers understood that who was made xiagang in a particular production line or division was largely at the discretion of the supervisor, and good guanxi here indeed played an important role. However, in the final analysis, they still tended to hold the manager as culpable. The manager in question could be the past or the present one, but it was always someone in the leadership that should bear responsibility. In their view, if the leaders were doing a good job for the enterprise, workers would not experience xiagang. If the enterprise was badly run, it was because the leaders were either incompetent or corrupt. In any case, workers had nothing to do with it. In cases such as the one quoted earlier where the enterprise was to close entirely, the blackhand was all the more clear—it must have been the manager or the few leaders at the top. Thus, workers tended to see themselves as the victim or scapegoat in this episode of xiagang. Their own ability or competence was beyond question in their own understanding about xiagang, “we merely worked according to what we were told.” This is a mockery of the official socialist discourse in which workers were portrayed as the master. This is an important issue in its own right and deserves further investigation. In passing we would only suggest that this image of passive, dutiful children following orders has to do with the particular nature of our subject group that is, in a sense, at the bottom of the transitional society, but more broadly should remind us how much the official rhetoric diverged from reality under state socialism.3

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Blaming State enterprises plan poorly. Big enterprises lack vision, and the leaders are not pioneering. They do not try to experiment with new products to support the workers. The management would not be like this in a shareholding enterprise. In state enterprises the managers feel no pressure. They will still be leaders wherever they are transferred to. It doesn’t make much difference to them. They therefore pay very little attention to workers’ actual livelihood. What they care about is their own reputation and status, or the superficial achievements of the enterprise. Money comes with status. In any case, the manager is economically guaranteed during his tenure. He need not consider the long-term benefits of the enterprise. You see, the poor results of the enterprise are largely related to this. All is short-term behavior. Just a few years and the manager is done. In 1987 we had a new manager with a background in finance, and he knew how to get tax exemptions. The enterprise was doing somewhat better then. But this manager switched to the city government when the opportunity arose. The next manager we got no longer did any good for the enterprise. (Informant B-1, July 1999)

When xiagang workers blamed others for their injurious experience, they had grievances, and a feeling of injustice developed. Blaming is the process by which workers laid the blame of their misfortunes on the more macro structural factors of the enterprise or the wider political regime. This is not to say that workers did not blame the manager or the leaders of their enterprise. Indeed, they were the targets in this exercise. In the view of the workers, managers were, almost without exception, corrupt. And official corruption has already been widely acknowledged and recognized as a fact of life in China: You tell me, which Communist Party (member) is not corrupt? As a common saying goes, “if you execute and shoot each and every one you found corrupt, there are still bound to be some who manage to escape.” (Informant B-40, August 1999)

Workers agreed that the managers were morally degenerate, but they also tended to interpret their corrupt behavior less from the perspective of their own individual decadence. Rather, in contrast to the limited vision that Mills portrays, they rarely failed to recognize that the corrupt behavior of cadres was in fact organizationally and institutionally grounded.4 One important strand of enterprise reform since the 1980s, as Groves et al. point out, was “to develop new mechanisms to reward managers and link managerial careers more effectively to firm performance.”5 Enterprise performance and profitability therefore became important means of

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determining the tenure of a manager. A related feature of the early enterprise reforms was to promote managerial mobility across enterprises in the same administrative jurisdiction (e.g., industrial bureau or local government). Even among the largest listed companies, the average annual CEO turnover rate was substantially higher than the average CEO turnover rate reported for the United States and Japan.6 As workers soon realized, this measure turned managers into transient journeymen in the enterprise, especially in contrast to their own “loyalty.” And it was this transient nature and the perceived lack of commitment to the enterprise that was the major cause of their corrupt behavior. Nowadays in every work unit the managers change very frequently. Normally the manager got transferred every two or three years regardless of his performance. This is a regular policy. Perhaps it is to avoid the manager developing a guanxi network. But because it is all short-term behavior, there is no reason why the manager would not reap as much as possible during his tenure. (Informant B-52, June 1999)

Workers therefore painted a very clear picture of how they understood cadre corruption within the enterprise that resulted in its eventual downfall. It is the institutional practice of the state that prompts the emergence of corruption. This belief is expressed in sayings such as “If you do not use the power when you have it, it will expire” (youquanbuyong, guoqizuofei) or “One full [i.e., satisfied] dog goes, and another [hungry] dog comes” (baogouzi zoule, ergouzi lai). But many workers also readily admitted that they did not have any substantive evidence for these accusations of official corruption. Many times they would simply say, “we workers do not know the details,” or, “this is what all others said.” Any misjudgment in business, like the one incident told by the informant quoted at the beginning of the chapter, was regarded as corrupt nonetheless. However unsubstantiated, workers believed that managers must be in one way or another corrupt. Otherwise the downfall of the enterprise could not be explained because, again, workers had no role in it. This kind of reasoning and then blaming is also indicative of the increasing chasm that has developed between managers and workers in the past two decades as a result of industrial reform. Regardless of whether the claims of corruption are real or not, the consequences are real. And it was the workers who largely bore the cost. A feeling of injustice thus developed. In addition to blaming managerial and organizational corruption as the main reason leading to their own xiagang, sometimes workers would go beyond this and point to broader policy failures in the era of reform as the cause for their predicaments. The intensification of competition from private enterprises and the relative inability of state enterprises to catch up

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are often cited as another cause for the downfall of their enterprises. As one worker observed, Our factory’s products are sluggish in technological innovation. We changed very slowly in production methods and were not as nimble and innovative as the southern [private] enterprises. Our materials were also not changing . . . Even our technical staff was no good, and they were all the same old guys as before. We also failed to attract any university graduates. (Informant B-22, August 1999)

The failure to compete is especially true among light consumer industries, as in the earlier case that describes a soap factory. In some cases, the flurry of restructuring actions in the early 1990s were actually counterproductive, as frequent changes in production and business strategies actually speeded up the downfall of the company. A few informants reported cases of merger and reorganization that failed and also cases in which frequent attempts to change the product mix only added to the losses. Another common complaint regarding private competition was that product forgery is rampant among private enterprises, as a worker of a beverage enterprise told us: Even in the early 1990s, our soda water was very popular and shops queued up for our products . . . We used good raw materials, genuine white sugar and fruit juice, and our price was also reasonable . . . Then some township and village enterprises, or even private workshops without production permits, started to produce underground soda waters and sold them as our brand. They used artificial sweetener and coloring and so their cost of production was much cheaper. Many shops ordered large quantities of forged soda water and sold them at the price of genuine ones . . . Our factories were hit hard and our sales plummeted. (Informant B-56, August 1999)

Certainly we do not expect most ordinary workers to be able to analyze their own plight in a cool political economy framework and they often attributed the causes of their troubles to immediate factors rather than lifting their critique into the broader structural level. Still we could not ignore their own reckoning of the contradictions of market reforms that are symptomatic of larger social ills.

Framing Socialism should not allow anyone to go hungry. In the West there is the minimum safety net. We, however, have not realized the superiority of socialism. (Informant B-36, July 1999)

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Framing is essentially an interpretive exercise. This is how individuals attach subjective meanings to their objective situations. The concept of frame refers to “an interpretive schemata that simplifies and condenses the ‘world out there’ by selectively punctuating and encoding objects, situations, events, experience, and sequences of actions within one’s present or past environment.” 7 In Goffman’s words, framing allows individuals “to locate, perceive, identify, and label” occurrences within their life space and the world at large.8 In our present context, the process of framing allows xiagang workers to make sense of their grievances and predicaments by situating their xiagang experience within the changing experiences that they had with the enterprise and the state over the past few decades. Workers’ charges against the enterprise and the state were first and foremost moral. And they attributed blame and responsibility through a cultural and moral frame of betrayal and hence injustice.

The Shattered Social Contract: “How Can Socialism Have Unemployment?” Now the central government has convened a meeting saying that from next year onwards there will be immediate unemployment . . . But how can socialism have unemployment? . . . The newspapers have written about all these good policies. But they are all empty words. I am still all by myself. No one cares to ask if I am doing ok . . . I still want to be a worker. I bet that all the Chinese people still want to work in state-owned enterprises. (Informant W-P1, August 2000)

What would be the dominant frame that offers workers an explanation of their private troubles in transitional China? We submit that the preexisting socialist social contract would still be very much relevant. Tang and Parish suggested that “China’s classical socialist contract with the urban population promised basic living standards and a long list of benefits in return for political quiescence.”9 Focusing on state-sector workers, Walder called the basis of authority in state enterprises “neo-traditional.”10 It is traditional because it is not built upon impersonal universalist bureaucratic rules but on a kind of principled particularism and clientelist networks. In the old system, the danwei also formed the nexus between the individual and the socialist state. The generosity and care of the state was exemplified by its paternalism and in return the enterprise constituted the basis for individual consent and granting of legitimacy toward socialist rule. While new market-based conceptions of employment relations and citizenship emerged

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during the reform era, the socialist social contract remained the dominant normative and cognitive frame for workers to understand and, more importantly, to critique the injustices they received. In the past, socialism fulfilled the promise of full employment for urban workers. The institutional arrangement of “organized dependence” or “danwei welfare socialism”11 meant that a range of entitlement programs including job security, housing, child care, and pensions were granted to urban workers through state enterprises. Under such a system workers were taken care of “from cradle to grave.” They enjoyed high levels of security in a low-wage system that provided extensive benefits. Most middle-aged xiagang workers indeed grew up being told that this system was their destiny. Although they gradually came to realize that their share of the entitlements was deteriorating, they still found it hard to come to terms with the imminent prospect of unemployment when they were made redundant. This is not to say that they still retained the false expectation of full employment. Rather, unemployment means more than just the loss of a job. Economic difficulty aside, unemployment also signifies a loss of identity, not the identity of being a state worker, but the identity of belonging to a unit. In fact, many xiagang workers expressed the feeling of loss, a loss of social membership (mei zuzhi) such that they were no longer being looked after (mei ren guan) by the work unit. When these xiagang workers first started work, they were told that their membership with the work unit was to be a lifelong one. To them, the long years they had spent in a state enterprise had already deprived them of the necessary independent personae to stand out in a competitive world. They did not know how to live as an independent being in society. As a worker admitted: All the time we worked in the enterprise without a second thought. Once we were xiagang and went out of the factory, we were in total darkness. We know so little about the outside world. (Informant B-29, July 1999)

The system of “organized dependence” is therefore not just economic and political in nature but also social and psychological. However decrepit the state enterprise had become, the workers always wanted to rely on it and to find shelter in it. But the managers took away their position and hence their lifelong membership. Unemployment, in this sense, induced not only economic deprivation, but, more importantly, also social deprivation, which xiagang workers found particularly unsettling. Also associated with unemployment was the violation of another aspect of the social contract. Xiagang workers would have thought that their long years of loyal service with the enterprise would be rewarded with at least a retirement pension and medical care. With massive layoffs, this aspect of

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the socialist ideal also vanished. Workers were particularly dismayed to find that not only was their loyalty not rewarded, but they were essentially punished for it. As one put it: In my mind now I have a constant feeling of being duped. In the past years, many people jumped into the sea of business (xiahai). They profiteered by buying and then selling. We, the workers, worked steadfastly in the factory. We knew only about doing good labor in the factory and performed our best. And what did we get? We were kicked out from the factory. Isn’t that exactly what xiagang means? It is to throw the workers out. (Informant M-3, May 2000)

Workers definitely feel that they have fulfilled their part of the social contract with the state in working diligently and obeying the state for so many years. They often highlighted the sacrifices they have made for socialism and for the state. Many xiagang workers that we interviewed were middle-aged and had gone through all the major events in socialist China’s history: the Great Leap Forward and the consequent famine in the late 1950s, the Cultural Revolution and the associated send-down (xiaxiang) policy between the mid-1960s and mid-1970s, the late-marriage campaign and the subsequent one-child policy in the 1970s and early 1980s, and finally the state enterprise reform and the ensuing massive layoffs in the 1990s. From the perspective of these xiagang workers, they had all the time complied with the call of the state and made contributions to the country. But their sacrifice was not duly rewarded by the Party as they were made xiagang. I was sent to Inner Mongolia at sixteen [1969]. I have contributed my whole life to the country—my youth, and the best years of my life. I thought I was lucky to return to Beijing [in 1976]. All along I worked hard and performed my job conscientiously. And I put my best efforts into making sure that both the quantity and quality of production were good. But when I reached this age I am asked to xiagang. (Informant B-38, July 1999) Our generation has deep feelings toward the Party. When the Party asked us to go up to the mountains and down to the villages, we went. When we are asked to delay our marriage, we did. I did my best at the army farm (bingtuan) and was always the first to take up the assigned task . . . At last I was able to land on my feet in Beijing [in the late 1980s] but then I was caught by the policy of xiagang. People like us, you know, really did give our complete allegiance to the Party. We worked hard because we were working for the Party. (Informant B-57, July 1999)

This group of xiagang workers found that at almost every critical transitional juncture of their life—education, work, marriage, parenthood,

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and now, retirement—the state introduced policies affected them significantly, very often negatively. Their whole life has been shaped by this series of changing state policies. They were thus the “lost generation.”12 To their dismay, they contributed their best years to socialist development, but were not to enjoy the fruits of it. The socialist logic now defines them as incompetent. But to these people, this incompetence was largely a result of the sacrifices they had made to the state. In the view of the workers, their very loyalty earns them the eventual result of xiagang. The sly and cunning would have left the enterprise long ago, or they would have profited, like the managers, by taking advantage of the enterprise. It was the workers, the honest and simple-minded, who thought of nothing but to offer their loyal service to the enterprise, who were met with the fate of xiagang. They moaned about their loyalty, but they moaned more about their loyalty not being recognized and recompensed by the enterprise and the state. It is this sense of injustice, of being left behind in the cold after consenting to and working under the implicit social contract with the danwei and the state, that formed workers’ interpretations of the xiagang process.

The Abuse of Trust: “I Always Believed in The Policies of The Party and The State . . .” At the time when the labor contract was decided, we didn’t think very carefully about it. Why so? You see, I believed in the government and the party. I relied on the enterprise for a living and the enterprise also needed me for further development. I didn’t have the slightest idea that the enterprise would take advantage of me. And I always believed in the policies of the party and the state. I thought they too wouldn’t cheat me. Well, what happened then negates my very naïve idea. (Informant M-15A, May 2000)

From the frame of the shattered social contract, workers often highlighted several aspects of the xiagang process that hurt them most. Their grievances over moral injustice were well-exemplified in their interpretation of the labor contract system, which was first introduced to state enterprises in 1986 and then made compulsory in 1995. The 1995 Labor Law stipulated that all workers must sign a labor contract with the enterprise regardless of their status, that is, whether they were originally fixed or contract workers. To ease the worry of older workers, a so-called double-ten policy (shuangshi zhengce) was adopted stipulating that workers who had served the enterprise for more than ten years or were less than ten years away from the

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official retirement age were entitled to an “open-ended contract” (wu gudingqi hetong). Implementation of the labor contract was said to be almost 90 percent complete by the end of May 1996. Looking back, many workers were now very bitter about this labor contract system. They felt that they were misled, or indeed deceived by the enterprise, into entering a contract that eventually resulted in their retrenchment, generating a sense of being betrayed by the enterprise. A group of mining workers in Mengtougou in rural Beijing recounted that they had very little knowledge about the labor contract system at the time of the implementation. In 1994 many of the workers were already retrenched and living on a monthly living allowance from the enterprise. In March 1996, they were asked to sign a three-year term contract or risk having their monthly allowance suspended. Some of these workers were in fact qualified under the double-ten policy for an open-ended contract. They inquired about this but were given assurances by the enterprise that it was merely a procedural formality and that the contract would be renewed. When the contract expired in March 1999, however, they were all dismissed with no compensation and became unemployed. The original promise of contract renewal simply evaporated. Workers now said that the labor contract was unlawful because they were “coerced” to sign. In their view, the enterprise had violated its moral promise and had abused the workers’ trust. From a conspiratorial perspective, workers now saw the enterprise, or even the state, as using the labor contract system as a pretext to get rid of them. They were, in their words, being cheated into believing that the contract system was merely another socialist formality. They trusted the enterprise that they were merely participating in a perfunctory show of socialist laws, but their trust was dashed when they realized that the contract was meant to be real and that it would be used against them. This frame of trust also reveals another twist in the labor contract system. Implementation of the system was indeed more regular in Beijing city than in Mengtougou or Wuhan. Workers who qualified under the doubleten policy in Beijing city were mostly offered an open-ended contract. Many of our informants there did indeed sign such a contract, but their feeling of betrayal was not alleviated. The workers’ initial understanding was that an open-ended contract was to be valid forever since there was no expiry date. They believed that the contract was real, that is, that it would be honored. They trusted that their status as fixed state workers would be maintained and upheld by the enterprise and the state and was exemplified in the contract. They were given assurances that the contract system would protect their rights. When it comes to xiagang, therefore, they found it hard to comprehend the apparent contradiction that an open-ended contract did not in fact offer them any protection. They were laid off regardless

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of the terms of the labor contract they held. In one extreme case, a worker was confronted with the harsh reality that the contract term could indeed be altered at will by the enterprise: I was laid off in the second round of xiagang at the enterprise . . . Years ago I signed an open-ended contract. But when I was told to xiagang the contract was also altered. The expiry date was changed to 31 July 1998. That was the date when I was laid off. Well, the division chief just crossed out the “openended” and rewrote it. It was no use to argue. It would have to be that way anyway. What the superior said was law, so he altered my contract. Afterwards we signed a new one. This time it was the xiagang agreement. (Informant B-15, July 1999)

The informant’s resigned attitude is clearly rooted in his loss of faith in the enterprise. In fact, after he was retrenched he was promised official retirement two years later. But the informant stated that he would no longer take the words of the enterprise seriously. This feeling of distrust is indeed rampant among workers. To xiagang workers the labor contract system has more to do with the issue of trust rather than with the spirit of law. From the workers’ perspective, they were either led to believe in the nonsignificance or the significance of the contract system; they either trusted that the contract was merely procedural or that it would indeed be upheld. In either case, however, the outcome was essentially the same. The spirit of the labor contract could either be upheld or violated and the workers could be made redundant. In this sense, the labor contract system served no other purpose than as a weapon for enterprise management to achieve its own ends. The pattern of organizational and personal relationships of mutual trust and dependence described by Walder appears to be distant history in our informants’ contemporary experiences, but it remained the common frame for them to make sense of their situations. They felt that they could no longer trust their enterprises.

Lost Prestige: “The Enterprise No Longer Believed in Us Workers” The closing down of the mine was such a big issue that it should be explained to the workers very clearly. We workers are all simple and straightforward. We could all empathize with the enterprise if we were told all the details . . . We, the working class, support socialism and the leadership of the party. We care about the enterprise, and we are understanding people. We should be consulted about these big issues. But the enterprise no longer

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believes in workers. Just a meeting by the committee of the workers’ representatives and then the decision was set. (Informant M-8, May 2000)

While workers felt that enterprises could no longer be trusted, they also lamented that the enterprises did not trust them. This perception of declining trust, we would argue, is embedded in the larger frame of worsening labor relations and the waning of the once prestigious working class. Socialist rhetoric and the reality of mobilization and rewards in the state sector contributed to a sense of efficacy and empowerment, however limited, among urban workers. They were, at least theoretically, the masters of society and they knew that the state depended on them to produce much needed materials, goods, and services for the cause of socialist construction. Now they feel that this once proud working class is being stripped of its aura and demoted to an irrelevant and insignificant position in the process of market and enterprise reform. Labor relations in state enterprises had been worsening ever since the implementation of the factory director responsibility system in the mid1980s. In the past, workers were regarded as the masters of the enterprise and they could articulate and defend their interests through various committee representations. With the increasing emphasis on efficiency and efficacy in enterprise reform, however, enterprise directors were empowered with more autonomy and flexibility in the running of state enterprises. Consequently, factory directors had come to monopolize much of the decision-making power; in the words of workers, “The manager had become the local tyrant (tuhuangdi); what he said was law.” Worker participation in those committee representations had been rapidly declining.13 The prestigious working class had become a thing of the past and workers increasingly found that they did not have a say even in matters concerning their own immediate welfare. They had lost the privilege of being treated as equals by the management. In fact, many xiagang workers did accept the inevitability of state enterprise reform and the consequent mass layoffs. As they said, “We are understanding people.” What was disconcerting to them was that all the time they were kept in the dark. Many xiagang workers had spent their entire careers in the enterprise and they worked diligently for it through its time of ups and downs. They considered themselves belonging to the larger family of the enterprise. But now their position in the enterprise had declined so much that they were not worthy to be consulted by the enterprise. They were, in their words, not trusted. Workers also came face to face with this lost prestige during their own experience in the actual process of xiagang. Indeed, procedural irregularity and lack of transparency in the xiagang process was commonplace.14 In almost all the cases that we came across, workers were laid off in a very

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autocratic and dogmatic manner. Not only were they not consulted, they learned of their own layoff on very short notice. The factory neither consulted the affected workers about their xiagang nor gave advanced notice. Usually they tell you by the end of the month that you don’t have to come back the next month. So that is xiagang, and you don’t have to come. (Informant B-76, July 1999)

Although official policy stipulated there should be a “consultation process” to enable workers to participate in the making of layoff decisions through the workers’ representative committee, in reality workers’ participation was at best window-dressing and in many cases nonexistent. In most cases, no workers’ congress or workers’ representative committee was held. In the relatively few cases when they were held, they were used by the company mainly to announce the layoff decision rather than to allow for any meaningful worker input. One worker from a sweater company told us: Before the layoff, around October 1997 our factory had a workers’ representative meeting. The meeting turned out to be entirely about those big principles, saying that xiagang was a national policy and could turn the factory around. All those big theories about reform, you know. When it came to who got laid off and who did not, not a word was said. (Informant B-29, July 1999)

The other agency that was supposed to protect workers’ interests, the trade union, was also found to be largely irrelevant to the process of employment reform. In most cases, the enterprise trade unions were essentially defunct by the time xiagang was enforced: The trade union had not been able to exert any substantial influence ever since 1994–5 when the enterprise began to go downhill. What the trade union did was mostly to organize recreational activities. They were no longer concerned with worker welfare. All they cared about was production. (Informant B-29, July 1999) Our country’s trade unions are not of the same heart with workers, and I never heard of unions speaking out on behalf of workers and ever since I started working trade unions have been like this. Unions obey the party branch and union leaders are appointed by party cadres. (Informant B-15, July 1999)

In many cases, the only venue for workers’ “participation” is the lodging of an individual or collective complaint. Informants called it “quarreling”

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(nao) with either the immediate management or the higher-level administrative echelon of the state enterprises that owned their units. Only in these cases would workers’ voices sometimes be listened to and concessions won from the management. An example is the light bulb company. The decision to lay off workers was originally enforced without a prior process of consultation. Workers refused to leave and staged a strike, eventually forcing management to negotiate with them. A belated workers’ representative committee meeting was then convened. Although the policy of retrenchment still went ahead, workers were at least able to gain better xiagang terms. Thus, to the workers’ dismay, their prestige as state workers had eroded to such an extent that they were not treated by the enterprise in a humane and dignified way. In the lead up to eventual dismissal, some workers were constantly being shuffled into and out of their positions; others were told to stand by for orders from the enterprise or they would lose their monthly living allowance, so that it was almost impossible for them to find another proper job. Even after they were laid off, the enterprise still made no attempt to divulge the details of the actual xiagang arrangements to workers, or in some cases the enterprise deliberately concealed the specifics. From the workers’ perspectives, they should at least be entitled to know the relevant government policies on xiagang and the actual arrangements made by the enterprise. But the gulf between the managerial level and the working class had become so great that workers were basically denied the right to know. This secrecy added to workers’ charges about the illicit activities going on in the enterprise, though in most cases these were unsubstantiated.

Fatalism and Nostalgia: “There is Nothing We Could Do About it” One thing C. Wright Mills is correct about when describing how ordinary people are trapped in private troubles is that they often “cannot cope with their personal trouble in such ways as to control the structural transformations that usually lie behind them.” Most workers retreated to individualist strategies of survival and their view of the future was fatalistic. Many laid-off workers were still staying at home, especially the older ones. Quite a few were frustrated at the process of looking for another job. Most saw no hope for themselves in the new era. “I feel that walking along the road pointed out by the state is only a dead end . . . State policies are just like a train; it will shake you off once it turns the corner” (Informant

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B-29, July 1999). Instead, they could only cherish their memories of the good old days. We were poor in Mao’s time but we didn’t have to worry about anything. Now it’s a different world. No one cares for a second even if you die . . . Back then times were better . . . we all felt safe and sound. (Informant B-5, July 1999) The best era was the Mao era in the seventies. Although it was planned economy and the wage level was low, interpersonal relationships were good, and our mental burden was not as heavy. Nowadays relationships among people are not as pure. In the eighties the income was ok. But later it became so unequal. (Informant W-P3, August 2000)

Workers also mourned the vanishing socialist ideal with their popular nostalgia of the Maoist past, and thus they were also mourning the loss of an era. Time and again xiagang workers invoked the socialist past to point up the shortcomings in their present situation. They shared a vision of Maoist history as egalitarian not only in economic but also in social terms; both managers and workers in the enterprises were dedicated and clean, mutual help and comradeship, manifested in the spirit of Lei Feng, was prevalent, and, most important of all, everything was well planned for them. However distorted and biased this picture of the Maoist past was, and, as Lee15 noted, there was a subtle distinction between experienced and imagined Maoism, these collective memories about the Maoist era provided a frame of reference for workers to make sense of their present predicaments and to lodge a critique of the enterprise. As the xiagang workers “remembered,” back then both managers and workers worked hand in hand for the good of the enterprise, and they triumphed through all those difficult years. Now the enterprise was again in difficulties, and workers still had the will to contribute: We are not afraid of hardship. If the enterprise had difficulties we too were not afraid. In the past, when I was an apprentice, I was just earning 16 yuan a month. For many years later, it was 38.61 yuan. Many times I volunteered to work on Sundays, and I had never said anything. I was designated a progressive worker in both the factory and the bureau. Difficult? Wasn’t 1960 a difficult year? We were not afraid. At that time that was difficult enough. Now it is simply not the same thing. (Informant M-3, May 2000)

The message was clear. Workers were still the good old workers, but were no longer treasured by the enterprise. It was the enterprise, and in fact the managers, that had abandoned the Maoist spirit. What is common in these narratives of the past is that they not only revere the past over the

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present, but they also glorify the moral superiority of workers over the enterprise.

Hope for the Future: “I Just Hope That Our Child Will Live Better Than We Do” On the future, I just hope that our child will live better than we do . . . If my child aspired to learn anything I will try my best to earn money to support him. I know that is what the society will be like in the future. People should have a sense of crisis and be mobile, and shouldn’t be like in the past to just look for one stable job . . . Now the only thing I care about is his study. (Informant B-29, July 1999)

If there is any hope for the workers, especially the older ones, it is in the future generation. While they have almost given up on themselves, they have not lost their hope for their children. Quite a number of them would speak proudly of their children who were at a university or aspiring to get into one. For them education would be the ticket for their children to escape their fate of getting stuck in the factories. A forty-six-year-old woman worker spoke of her twenty-year-old son engaged in undergraduate studies in this way: Our child could not be just like us. He needs to have knowledge and ability. I hope my child will not be constrained and limited [in his development] and he should be able to go to any school if he is good enough. I even wish he could enter graduate school . . . I don’t even need to buy clothes and will stick with my old ones, but I can’t deny my son any opportunities to study. (Informant B-39, July 1999)

Conclusion The xiagang experience is injurious to workers to the extent that they have developed a deep sense of injustice and blame. To xiagang workers, the official discourse of jianyuan zengxiao (to retrench staff and enhance efficiency) was not doing them justice as they did not consider themselves responsible for their enterprise’s demise. Their feeling of injustice was therefore twofold. On one hand they felt that they should not be made scapegoats for the failure of socialist enterprises; on the other hand they also felt that their contributions to socialist development were not duly

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rewarded. Lee’s metaphor sees workers’ present experience as a “revenge of history,” that is, “Those who used to benefit most from the warmth of state socialism suffered most under competition-driven market socialism.”16 Xiagang workers in our study emphasized on looking back at how deprived they were all along, although what provokes their wrath is not so much the deprivations but their betrayal by the state. From the workers’ perspective, they listened to the calls of the state and party and made sacrifices, and they believed in the enterprises and rendered their loyal service accordingly. But, in the end, promises of the socialist ideal simply vanished. This sense of injustice could leave deep imprints on the social fabric of the society. According to social movement theory, collective action, or indeed corrective action, is guided by an injustice frame through which participants define the actions of an authority system as unjust and thereby they legitimate their own noncompliance.17 In fact, labor protests of varying scales have already been erupting in different parts of China. In our study we also recorded cases of conflict and sabotage in some of the enterprises in Beijing city when news of xiagang was announced. In Mengtougou, because of the extremely dogmatic way workers were made redundant, they had been trying to seek redress through the courts and violence had also resulted. In Wuhan, workers also told of their effort to reveal the corrupt behavior of their enterprises and to seek redress for their plight through the official channel of petition (xinfang). In many of these cases workers were still trying to protest within the legalistic framework as defined by the state’s “rule of law” project, which in one sense also works to impose limits on how far workers can actually go in claiming their interests and rights. Although still containable by the state apparatus, these are nevertheless currents of instability within Chinese society.

Notes 1. Ethnographic details are based on interviews done in Beijing, Mengtougou, and Wuhan, represented here by B, M, and W respectively. B-51 therefore denotes the number 51 informant we interviewed in Beijing. 2. C.W. Mills, The Sociological Imagination (New York: Oxford University Press, 1959), pp. 4–5. 3. For a similar analysis of the gap between official rhetoric and socialist reality, see Mark Selden, The Political Economy of Chinese Development (Armonk, N.Y.: M.E. Sharpe, 1993). 4. Xiaobo Lu, Cadres and Corruption: The Organizational Involution of the Chinese Communist Party (Stanford, CA.: Stanford University Press, 2000).

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5. Theodore Groves, Yongmiao Hong, John McMillan, and Barry Naughton, “China’s Evolving Managerial Labor Market,” The Journal of Political Economy, 103: 4 (August 1995), pp. 873–892. 6. Takao Kato and Cheryl Long, “CEO Turnover, Firm Performance and Enterprise Reform in China: Evidence from New Micro Data,” IZA Discussion Papers 1914, Institute for the Study of Labor (IZA), 2006. 7. David A. Snow and Robert D. Benford, “Master Frames and Cycles of Protest,” In Aldon D. Moris and Carol McClurg Mueller (ed.), Frontiers in Social Movement Theory (New Haven: Yale University Press, 1992), pp. 133–155. 8. Erving Goffman, Frame Analysis: An Essay on the Organization of Experience (New York: Harper, 1974). 9. Wenfang Tang and William L. Parish, Chinese Urban Life under Reform: The Changing Social Contract (Cambridge: Cambridge University Press, 2000), p. 34. 10. Andrew G.. Walder, Communist Neo-Traditionalism: Work and Authority in Chinese Industry (Berkeley, CA.: University of California Press, 1986). 11. Edward X. Gu, “From Permanent Employment to Massive Lay-offs: The Political Economy of ‘Transitional Unemployment’ in Urban China (1993–8),” Economy and Society, 28: 2 (1999), pp. 281–299. 12. Eva P.W. Hung and Stephen W.K. Chiu, “The Lost Generation: Life Course Dynamics and Xiagang in China,” Modern China, 29: 2 (April 2003), pp. 204–236. 13. Wenfang Tang et al., “Chinese Labor Relations in a Changing Work Environment,” Journal of Contemporary China, 5: 13 (1996), pp. 367–389. 14. Stephen W.K. Chiu and Eva P.W. Hung, “Good Governance or Muddling Through? Layoffs and Employment Reform in Socialist China,” Communist and Post-Communist Studies, 37: 3 (2004), pp. 395–411. 15. Ching Kwan Lee, “ ‘The Revenge of History’: Collective Memories and Labor Protests in North-eastern China,” Ethnography, 1: 2 (2000), pp. 217–237; Anita Chan, China’s Workers under Assault: The Exploitation of Labor in a Globalizing Economy (Armonk, N.Y.: M.E. Sharpe, 2001). 16. Ching Kwan Lee, “From the Specter of Mao to the Spirit of the Law: Labor Insurgency in China,” Theory and Society, 31 (2002), pp. 189–228. 17. David A. Snow et al., “Frame Alignment Processes, Micromobilization, and Movement Participation,” American Sociological Review, 51 (1986), pp. 464– 481.

Chapter 5 The Power of the Past: Nostalgia and Popular Discontent in Contemporary China William J. Hurst

Introduction How do workers view the Maoist past? What effects do their views have on the frequency and forms of their collective mobilization? These questions are not as simple as they appear. They have beguiled the field for some time, as scholars disagree over whether or not workers are nostalgic for some perceived better era of the past, and what importance this may or may not have.1 Before answering these questions, it is worthwhile first to trace what definitions of nostalgia have been offered in the study of Chinese politics generally and the study of workers in particular. In fact, it is clear that there are multiple widely felt subtypes of nostalgia in contemporary China. After outlining these, I present data on laid-off workers across four regions of China. These show that there are three subtypes of workers’ nostalgia. Each of these has different effects on workers’ propensity to engage in collective action and plays a role in shaping the character of their contention. Finally, I offer some broader hypotheses about the role of nostalgia in collective action beyond the world of Chinese workers. But first, what is nostalgia and why does it matter? Over the more than twenty-five hundred years since Hesiod described a long-lapsed Golden Age when humans “lived like gods, with carefree

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heart, remote from toil and misery,”2 many scholars have been fascinated by the proposition that things may have been better in the past—or, alternatively, that people may look back on the past with rose-tinted goggles, perceiving bad circumstances during prior times in a kinder light. Many have recently observed such thinking among various segments of Chinese society, from intellectuals and artists, to laid-off state sector workers and rural villagers. A special issue of a journal was recently devoted to discussing nostalgia for the Cultural Revolution, and an entire edited book has been published on collective memories of the pre-reform era.3 So far, however, we have an insufficient framework to speak about nostalgia across social groups in China or to measure just what quantity or which sort of nostalgia any particular group feels and what political effects such sentiments might have, though Ching Kwan Lee and Guobin Yang have recently provided a useful starting point.4 I propose a basic system for categorizing the varieties of nostalgia observed in contemporary China and a series of hypotheses to explain which sorts of nostalgia ought to promote specific forms of collective action and contention.

Defining Nostalgia in Reform China First, there is a need for a benchmark definition of nostalgia. A minimal definition of the core concept of nostalgia in contemporary China is the perception among members of a clearly defined group that their lives were in some important respect better prior to the advent of reform in 1978 than they are today. Many observations can then be conceptually arrayed around this basic definition. For fifteen years,5 Western scholars of China have been concerned with the ways individuals, groups, and the state view the past and mobilize portions of it to serve particular purposes in the present. Though all of these scholars have spoken directly of nostalgia, they have not fully engaged one another’s arguments or data. This relative lack of interchange is largely due to the fact that not all of these authors have deployed the concept of nostalgia in the same way. Working from differing conceptual templates, they have constructed arguments and analyses that are thus necessarily somewhat idiosyncratic. Under such circumstances, it is difficult to develop a coherent literature or make plain the most salient debates or significant empirical findings. Whether a particular researcher sympathizes with or denigrates a given form of nostalgia is not important. Neither is the question of whether an author who first observed a given form of nostalgia conceptualized it as a

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possible cause explaining various aspects of mobilization. What is important for my purpose here is that, when looking back at what’s been observed, nostalgia is treated as a potentially important factor in the overall process of shaping grievances and perceptions, rather than merely a rhetorical form. Nostalgia as frame, rather than nostalgia as claim, is what I seek to unpack here.6 Some previous studies have treated nostalgia not as frame or phrasing, but as an outcome to be explained in its own right. Guobin Yang has attempted to tease out the causal mechanisms behind manifestations of nostalgia during the 1990s for the Cultural Revolution period. Yang’s scholarship, centered on content analysis of cultural products such as art exhibits, books, music albums, and so forth, looks at efforts by some of urban China’s most vulnerable people to recover and revisit the past in order to bolster a sense of identity in the present.7 Most other scholars, however, have viewed nostalgia as a force exerting some form of causal influence on aspects of various groups’ behavior in Chinese society. For example, Kevin O’Brien and Lianjiang Li examined the relationship between “campaign nostalgia” and villagers’ resistance to corrupt local authorities. Geremie Barmé cited the alleged nostalgia of many intellectuals and artists for their social and political position in the pre-reform era to explain their feelings of anomie and associated behaviors of social dislocation in the present. And Ching Kwan Lee pointed to nostalgia for at least some aspects of the Maoist past as a major factor behind laid-off workers’ mobilization.8 Building on my basic definition presented earlier, three dimensions of nostalgia can be observed in Chinese society today (which resemble the three forms of injury discussed earlier in the introduction to this volume). These could be called political, economic, and cultural. I prefer, however, to use more specific categories—relational, material, and ideational nostalgia. Relational nostalgia refers to the perception that power relations between a given person and other individuals or groups have changed to his or her disadvantage. This could take the form, for example, of a client being deserted by his patron, a patron losing her resources of patronage (and thus being deserted by clients), or the loss of leverage or powers of coercion that had previously been at one’s disposal. In the simplest terms, it means that someone feels he or she has lost power relative to someone else over time. Material nostalgia is quite simple: an individual or group perceives that their material situation has deteriorated when compared with some time in the past, often in absolute terms, but sometimes in relative terms versus some other person or group. This could entail falling wages, reduced job security, consumer price inflation, loss of welfare benefits, or seeing the great economic success of others while feeling that one has been left behind. People who feel poor often recall fondly a time when their now ostentatiously

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wealthy neighbors seemed just as poor as they were or when for other reasons they did not feel so deprived. Usually, though, those suffering material nostalgia genuinely believe that they have become poorer than they used to be in absolute terms—not just that their neighbors or peers have gotten rich faster than they have. Ideational nostalgia entails a perception—somewhat more difficult to observe or measure than material or relational nostalgia—that ideological, moral, ethical, or spiritual aspects of life were better in some earlier era. This could apply to an individual previously accustomed to great social approbation coming to be ignored or, worse, becoming the object of social disapproval or scorn after reform, to members of a previously lionized group now being marginalized or mocked in post-socialist society, or to individuals who simply miss the ethos of revolutionary or charismatic mobilization and struggle. Individuals may also sometimes miss the past for more personal reasons—many people all over the world feel better about their lives when they are young as compared to when they are older. Such a feeling is familiar to anyone who has ever waxed (or heard someone wax) about how life was simpler, nicer, better, or friendlier “back in the good old days.” Importantly, all these dimensions of nostalgia can be felt by people who did not themselves even experience the past events that ostensibly underpin them. Mythologies of bygone golden ages can inspire dissatisfaction with the present among those who choose to remember only certain aspects of the past as well as among those who merely choose to believe an idealized rendering of the past offered by others. Plenty of baseball fans today under age fifty bemoan ownership’s initial 1942 attempt to install lights at Wrigley Field or the Dodgers’ 1958 move from Brooklyn to Los Angeles. These phenomena are by no means unknown in China and, in fact, may be particularly common there and in other contexts where accurate histories of key events and periods are often suppressed. Most successful collective action frames, however, appear to draw on first-hand perceptions of genuine decline rather than simply selective and stylized recollections or purely “imagined memories.”9 Alone, no single dimension seems sufficient to inspire collective action or contention by those who experience it. Most people in most societies probably experience some degree of ideational nostalgia at some point in their lives, but this does not lead most people to take to the streets. Likewise, many people in many contexts experience material nostalgia everyday without being motivated to engage in collective action. Relational nostalgia, by its very nature, would seem to diminish the perceived capabilities (and increase the perceived risks) of contentious mobilization—and, in any case could form the basis of frames beyond the boundaries of acceptability in China. This does not mean, however, that in concert with other forces, nostalgia’s role (in any of its three dimensions) cannot be significant.

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Moreover, it is certainly possible, and in fact probable, that any given group experiencing nostalgia in post-Mao China would experience more than just one of the above dimensions. The key is to examine what combinations of dimensions might be relatively more likely to promote or discourage collective action or contribute to the formation of particular frames.

What Kinds of Nostalgia Have We Found in China? Before we can offer new hypotheses about how nostalgia influences collective action, we need to categorize the observations of nostalgia we already have. So far, only Guobin Yang has uncovered what looks like purely ideational nostalgia. The former sent-down youth (zhiqing) he studied expressed mostly only vague feelings of a superior ethos of life in the Maoist era. As he explains, at its center was a concern for meaning and identity . . . One way for the zhiqing generation to deal with this identity crisis is to reestablish connections with the past through nostalgia [which] . . . carries former educated youth back emotionally to a rural past to which they impute a beauty and joy of the most elevated kind.10

Nowhere in his account, though, does Yang emphasize feelings of powerlessness or material deprivation. On the contrary, it appears that at least some of the old zhiqing succeeded financially and otherwise since returning to the cities and now see their materially comfortable lives as devoid of meaning. Similarly, it is hard to imagine many people more disadvantaged in power relationships than educated urban youth forced to live, dependent on the kindness of others, in impoverished villages for indeterminate lengths of time. Nearly any type of life in the city today must surely be an improvement in relational terms, despite their sincere ideational nostalgia. The villagers studied by Kevin O’Brien and Lianjiang Li perceived a decreasing ability to hold the power of local cadres and officials in check through campaigns that had been common in the relatively recent past. On top of this, they expressed a longing for the atmosphere of the campaign itself. They wanted to reassert some control over abusive or rapacious local leaders, and they yearned to do so specifically through the vehicle of a mass campaign, reminiscent of the 1950s or 1960s. Finally, the villagers seemed to feel this way even though they saw their material situations improving over the past several decades—in other words, they experienced a

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combination of ideational and relational nostalgia without much in the way of material nostalgia. Geremie Barmé found that intellectuals and artists experienced a combination of ideational and material nostalgia. They felt ideational nostalgia because they missed the status, respect, and importance they once were given by the state and Party, as well as in society. They also appeared to miss the financial support and guaranteed livelihood they had received from the state in the pre-reform era. Rather than provoking or facilitating concerted resistance, however, this blend seems to have produced atomization, anomie, and despair. The workers Ching Kwan Lee examined in the Northeast clearly perceived that they had lost power or leverage they once enjoyed over managers or local officials. They complained of not being respected, of being pushed aside, essentially of losing what political clout they had previously enjoyed. These workers also pointed to dramatic declines in their material lives. They worried about affording food, housing, and basic health care. Despite this material and relational nostalgia, however, they were steadily embracing a new ideational worldview—one where law, citizenship, and procedural fairness were to take precedence over politics, class background, or biaoxian. Though it is unclear whether, in the last analysis, workers’ use of law and rights rhetoric indicates “a worldview in transformation,” even while the workers themselves “admit that these are pure rhetoric and are extremely cynical about the alleged existence of legality.”11 The ideational dimension seemed absent from these workers’ material and relational nostalgia. Later, in 2007, Lee painted a slightly different picture of Northeastern workers’ nostalgia, presenting an equivocal set of findings. Materially, she argued, workers missed job security and relative equality, but they also recalled shortages and recognized their generally improved living standards under reform. Relationally, Lee’s workers remembered both the power of ordinary workers over managers and cadre tyranny on the shop floor prior to reform. And ideationally, they fondly recollected a sense of collective purpose and an atmosphere of “psychological well-being” in the Maoist period, but also emphasized that a pervasive climate of fear and inter-personal distrust had prevailed.12 Though she does not unravel these paradoxical sets of findings, Lee does hint at the fact that different categories and generations of workers among her interviewees tended to cluster around particular frameworks of collective memory that I suspect are key to understanding her findings and explaining which subgroups of workers mobilized collectively and why.13 William Hurst and Kevin O’Brien discussed a form of three-dimensional nostalgia among retired state-owned enterprise (SOE) workers. Specifically, they discovered that many retirees viewed the denial of pensions as an

Nostalgia and Popular Discontent Table 5.1

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Dimensions of nostalgia observed in recent China scholarship

Group/Author(s)

Zhiqing/Yang Intellectuals and Artists/Barmé Villagers/O’Brien and Li Laid-off workers/Lee (pre-2007) Retired workers/Hurst and O’Brien Northeastern laid-off workers/Author Upper Changjiang and north–central laid-off workers/Author Central coast laid-off workers/Author

Dimensions present Material

Relational

Ideational

No Yes No Yes Yes Yes Yes

No No Yes Yes Yes Yes Yes

Yes Yes Yes No Yes Yes No

No

Yes

No

affront to their rightful political status and a failure of the state to deliver on a “sacred obligation.” At the same time, the severity of their material deprivation produced acute crises of subsistence compared with their earlier comfortable lifestyles. Finally, retirees often looked back—through material, ideational, and relational lenses—to a “brighter past” when, “activism was encouraged, autonomy was high, and workers briefly acquired some real power over managers on the shop floor . . . [and all were] . . . promised an early and comfortable retirement.”14 Table 5.1 outlines this series of divergent types of nostalgia uncovered in recent studies of contemporary China. It is tempting to see these either as being in conflict with each other or simply too distinct and self-contained to speak to one another. I hope to bring them together in a way that highlights their implicit similarities and the advantages of explicit comparison between them based on a common rubric. Additionally, looking at them this way shows how they do not necessarily conflict with or contradict each other, but rather that they usefully complement one another and could promote comparative analysis on several key dimensions across a variety of important social groups in China today.15

Different Forms of Nostalgia among Laid-off Workers across China Based on fieldwork conducted in Beijing, Benxi, Chongqing, Datong, Harbin, Luoyang, Shanghai, Shenyang, and Zhengzhou between 2000

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and 2002, including 140 interviews with laid-off workers of different ages across a range of sectors, I uncovered three distinct regionally based variants of nostalgia among the unemployed. Workers in the Northeast (Liaoning exclusive of Dalian, Jilin, and Heilongjiang provinces), having been “structurally proletarianized”16 through intensive state-led industrialization under Japanese colonial rule and Soviet tutelage, and having been socialized in environments of dense social networks concentrated within workplaces that were subjects of national acclaim, felt a blend of all three types of nostalgia by the turn of the twenty-first century. Central Coast (defined here as Shanghai, Jiangsu, Coastal Shandong,17 Dalian City, and Tianjin) workers, in a region where the working class was forged mostly in foreign-invested and smaller indigenous capitalist firms before 1949, and where worker radicalism thrived under socialism, even as living standards stagnated, typically felt only some measure of relational nostalgia without strong accompanying ideational or material elements. Finally, workers in the North-Central (Shanxi, Shaanxi, Inland Shandong, and Henan) and Upper Changjiang (Hubei, Hunan, Sichuan, and Chongqing) regions, which have always been relative backwaters, and where the working class came into being largely in state-owned textile mills, mines, and defense plants, mostly after 1949, were experiencing a combination of relational and material nostalgia by the early part of this decade without much, if any, ideational component (in fact, some of them openly mocked Maoist ideology and the social atmosphere of the 1960s and 1970s). Like the subjects of Lee’s earlier work on Liaoning (but unlike what she seemed to find in 2007), many of the laid-off workers I interviewed in Northeastern China explicitly claimed that they had lived under better material conditions in absolute (as well as relative) terms during the 1960s or 1970s than they do today. They also frequently blamed the reform project as a whole for destroying a healthy socialist order that had existed in the Maoist era, and many expressed a desire to return to the egalitarian or revolutionary world of the past. Finally, as Lee also observed, these interviewees felt they had been ousted from positions of relative power within the enterprise, the local political arena, and the national polity. As one retiree in Benxi (a city of roughly one million people in Liaoning Province) phrased it, Reform has brought nothing but problems. Political reforms have taken away rights from the people and undermined the revolution’s victories. Economic reforms have brought lay-offs and poverty and have made Benxi’s economy collapse. I have been “on vacation” since 1988 and have protested many times because I often do not have enough to eat.18

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A miner in Benxi said that “reform and opening started around 1985. Since that time, everything has consistently gotten worse and worse . . . During the planned economy we were all poor. But we were poor together. We were all proletarians.”19 Whether or not most Northeastern workers felt three-dimensional nostalgia raises an empirical question, especially vis-a-vis Lee’s findings: is ideational nostalgia present or are these workers more progressive or accepting of new worldviews, such as the legalistic mindset Lee often suggests. Perhaps Lee’s interview subjects in Liaoning Province’s capital city of Shenyang (whose views illuminate her article on the “revenge of history”) perceived things differently than did many of the workers I interviewed seventy-five kilometers away in Benxi, but not unlike some of the workers she later described in Liaoyang and Tieling. Quite possibly, this is an artifact of a more micro-level dynamic of regional variation in types of nostalgia—with workers in the privileged and relatively cosmopolitan setting of provincial capitals eager to embrace new legal norms and attitudes, while those in truly neglected cities clung to relics of the age in which they felt their lives mattered. As Lee also hinted, perhaps cohort effects are at work, with younger workers less inclined to view Mao era social life or ideas favorably. Finally, it is possible that some workers had begun to deploy the rhetoric of a new set of values and perspectives strategically, even though they may still on some level long for a return to their glorious status of the past (highlighting the importance of distinguishing nostalgia as frame from nostalgia as claim). Unlike their counterparts in the Northeast, most workers I interviewed in the Upper Changjiang city of Chongqing and the North–Central cities of Datong and Luoyang expressed a combination of relational and material nostalgia, lamenting their poverty and lack of clout but with little if any longing to return to a Maoist “cultural milieu.” One former miner, now working as a gypsy cab driver, in Chongqing expressed concern with inequality and a lack of government assistance for the disadvantaged, at the early stage of reform, Deng Xiaoping said “some people will get rich first.” Well, some people are now rich, but more and more people are getting poorer. The government found a way to allow party members and some other lucky people to get rich, but I don’t think they care much about the rest of the people who are still poor.20

Others also claimed that what they really desired was economic opportunity and political equality and that, while they missed having these protections in the past, they had little desire for the return of other social and cultural aspects of the pre-reform era.21

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Finally, most workers in the Central Coast city of Shanghai exhibited only aspects of relational nostalgia, complaining about their lack of power and about being victimized by various abuses, but recognizing their material progress over the past twenty years and seeing the pre-reform ideational universe as unworthy of anything but derision and scorn. One laid-off government worker, for example, harshly criticized the pre-reform era, speaking of the many ways in which “old Mao himself managed the economy badly and disrupted society,” and extolled the virtues of reform, even while worrying about possible future instability, every generation always regrets that they were not instead members of their children’s generation. Everything always is better for the next generation compared to the last. Now I am not so sure. I know that my children have so far had a better life than I did at their age, but their future is not secure. I worry about them and my grandchildren.22

Laid-off workers in different parts of China express different subtypes of nostalgia in large part because they experienced divergent pasts and distinct present realities. Though beyond the scope of my argument here, the structural roots of nostalgia and frames ought not to be overlooked.23 Even more importantly, however, laid-off workers across these four regions engaged in discrete patterns of mobilization and contention, based in part on which nostalgic subtype they experienced.24 It is thus possible to formulate some preliminary hypotheses to explain what subtypes of nostalgia facilitate what types of collective action.

Some Preliminary Hypotheses about Nostalgia It is possible to formulate some hypotheses about what subtypes of nostalgia in what sort of situations are more likely to induce collective action or contentious resistance. First, it seems that in order to facilitate widespread collective action, relational nostalgia must be present.25 But relational nostalgia alone is not sufficient as a collective action frame, since in the two cases of “pure” relational nostalgia—laid-off workers on the Central Coast and artists and intellectuals—we observe mostly quiescence. It must be blended with some additional nostalgic dimension, as Lee and Yang also imply.26 This suggests, in contrast to claims of some social movement theorists who have maintained that material deprivation is a necessary

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component of any successful collective action frame, that there must be something of the political in the sorts of nostalgia that precipitate collective action. Such a principle lends apparent support to the idea that “injustice frames” are a necessary component of nostalgic mobilization. In more general terms, injustice frames often appear to be necessary but not sufficient components of successful collective action frames. The idea that injustice framings are an integral factor explaining many forms of social protest has been well developed in other contexts. Scholars who have emphasized this particular type of framing have argued that successful collective action often requires participants to view the actions of authorities as unjust and themselves as victims seeking redress. 27 Though my evidence cannot confirm the claim that injustice frames are necessary for any and all forms of collective mobilization,28 it does appear that all nostalgiabased mobilization in contemporary China does contain an injustice frame component. Furthermore, conceptualizing the various sorts of nostalgia called upon by contentious Chinese citizens as subtypes of injustice frames allows us to begin to compare the hypotheses offered here with findings from other contexts. Second, based on this general finding, there appear to be three distinct subtypes of nostalgia that help to facilitate contention in China and perhaps beyond. The first of these could be called “political–ethos” nostalgia and consists of the blend of relational and ideational nostalgia described by O’Brien and Li. The second could be termed “political–economic” nostalgia and is represented in Ching Kwan Lee’s work on Northeastern workers and in my own findings about North–Central and Upper Changjiang workers. Finally, there is the sort of “three-dimensional” or “generalized” nostalgia that I uncovered among a number of my Northeastern interviewees and that Hurst and O’Brien observed among retirees. Each of these three subtypes appears to give rise to different forms of injustice frames and manifestations of contention. Political–ethos nostalgia could be expected to facilitate contention that is generally unfocused in its claims—beyond the basic claim of restoration of equitable political relations or of some measure of control over the powerful by the less powerful—but distinctive in its use of self-consciously old-fashioned rhetoric and symbolism in its claim-making, meant to hark back to popular ideas of a brighter past. Political–economic nostalgia should likely give rise to contention focused on economic grievances and claims that make use of more contemporary or “forward-looking” language and symbols. Finally, generalized nostalgia ought to enable contention centered around both economic and political grievances that also draws on “backward-looking” rhetoric and cultural imagery.

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All this raises two additional questions: (i) what is the relative potential of each subtype of nostalgia for actually serving as a successful collective action frame; and (ii) how might this translate beyond the China case. In answer to the first question, political–ethos nostalgia should have less mobilizing potential than the other two subtypes. This is because it does not provide a ready set of claims challengers can present to authorities (beyond broad demands for political inclusion or reform that all actors in China know are out-of-bounds). Political–economic nostalgia and generalized nostalgia, on the other hand, facilitate the lodging of narrowly economic or material claims that are much more likely to produce positive outcomes from contention. Additionally, the public process of frame construction and dissemination is much less risky when such often legally protected demands and claims are the focus from the outset. Though relatively little work has been done on which types of injustice frames best facilitate collective action, based on a large survey, William Carroll and Robert Ratner found that social movement organizations on the West Coast of Canada most frequently deployed what they referred to as “political-economy” and “identity politics” frames either alone or in combination. The basic tenets of these are surprisingly similar to the political–economic and political–ethos subtypes of nostalgia just described. What is also striking is that political–economic injustice frames seem to be just as centrally important for social movement organizers in British Columbia as in China, and political–ethos or identity frames usually acted as at most add-ons in both the Chinese and Canadian contexts. 29 This suggests that ideas of relational victimization or deprivation may be necessary elements of successful mobilization built on injustice frames. Future research on contentious politics and nostalgia in China and elsewhere would do well to better systematize from the start the concept of nostalgia and specify just what effects widely held nostalgic worldviews of different sorts can have. The typology and hypotheses laid out here should provide a useful first step in this direction, but this by no means ought to be the last word.

Nostalgia as Frame versus Nostalgia as Claim Up to this point, I have spoken of nostalgia as a component of worldviews or frames, by which I mean patterns of interpretation through which individuals or organizations perceive the circumstances that influence their behavior or that of groups with regard to collective action. Such a usage posits nostalgia as at least one component of a causal or background

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variable. But what about nostalgia as part of the outcome—as some element of the contentious behavior in which groups sometimes engage? One can find significant use of nostalgia in the articulation of contentious claims in China. Just from my own research, I have observed the widespread use of such slogans as: quanxin quanyi yikao gongren jieji (wholeheartedly and with a full conscience depend on the working class); wuchan jieji bixü lingdao yiqie (the proletariat must take leadership of everything); shehui zhuyi hao (socialism is good); fandui zouzipai (oppose the capitalist roaders)—all hallmarks of the 1960s and 1970s in particular and of the Maoist period in general. Perhaps most pointed in implicit criticism of current leaders, some retired workers were said to have paraded through Benxi’s main square carrying a large portrait of Mao Zedong with the old Cultural Revolution slogans, du Mao zhuxi de shu, ting Mao zhuxi de hua (read Chairman Mao’s books, listen to Chairman Mao’s words), above the picture, and then in large bold red characters beneath it: anzhao Mao zhuxi de zuofa ban shi! (Conduct business according to Chairman Mao’s method!).30 Feng Chen also has highlighted how the use of such slogans by laid-off workers can help legitimate both their protests and perhaps also their thinly veiled attacks on present-day leaders (like the “capitalist roaders” who failed to act “according to Chairman Mao’s method”).31 Finally, Ching Kwan Lee has analyzed how workers alternatively deploy Maoist nostalgia and rule of law rhetoric in strategic efforts to legitimate their claims in the eyes of the state.32 Elizabeth Perry has been able to distinguish at least three distinct forms of nostalgia as claim. She contrasted the only superficially reactive claimmaking of villagers with an articulation and tactical repertoire of laid-off SOE workers that blended traditional acts of moral–economic symbolism with claims of (mainly material) socialist nostalgia. Perry then went on to imply that workers’ and peasants’ divergent structural positions under socialism and post-socialism explain much of this difference.33 If workers employed nostalgia as tactic as well as nostalgia as claim, sectarian movements and criminal gangs appeared to use it almost as a mobilizing structure, granting musty pre-revolutionary organizations a new lease on life as networks of challengers to the communist state apparatus.34 Such deployment of nostalgia as rhetoric or metaphor seems to result from a strategic decision to use a given tool, and does not appear to be an expression of ingrained worldviews that structure contention. Ultimately, how groups or individuals deploy nostalgia as part of the spectacle of their protests or the leitmotif of their claim-making is less important than explaining how nostalgia structures the thinking of key actors. Accomplishing the latter task allows us to discern and predict forms of contention tied to particular patterns of nostalgia.

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Nostalgia and Relative Deprivation Some may infer a link between my arguments and “relative deprivation” theories, first prominently deployed in sociology and political science by Ted Gurr in the late 1960s. As he put it, “the necessary precondition for violent civil conflict is relative deprivation, defined as actors’ perception of discrepancy between their value expectations and their environment’s apparent value capabilities.”35 Gurr went on to demonstrate the role of relative deprivation through analysis of a large cross-national survey.36 James Davies systematized Gurr’s arguments in his famous “J-curve” description of how an “intolerable gap” between what people expect and what they can get (e.g., between rapidly rising expectations and more slowly rising capabilities) drives them to revolution.37 These theories were quickly discredited in political science by scholars using data from the United States and other key cases that had been central to the early analyses of Gurr, Davies, and others.38 Sociologists, by and large, have been even more hostile right from the start.39 Even Gurr himself stepped back from his earlier arguments. Looking at nostalgia as a causal variable, however, is not quite the same thing as studying relative deprivation as it has been attacked and derided. Gurr did note that “the sense of deprivation can arise either from interference with goal-seeking behavior or from interference with continued enjoyment of an attained condition,”40 but analysts of relative deprivation have mostly emphasized the perceived gap between expectations and achievements, rather than between present and past conditions. Scholars of contentious politics should pay greater attention to the role of perceptions of declining conditions over time and the worldviews they foster in facilitating the development of specific collective action frames. This is particularly true when there is evidence (as there is from China) that individuals’ expectations have not markedly changed, while for some their circumstances genuinely have deteriorated.41 While certain forms of nostalgia may help promote certain forms of contention, neither nostalgia nor even the frames of which it forms a part can act singularly or as the only important factor in any reasonable model of contention in China or elsewhere. That said, if we tar all theories of “reactive,” “restorative,” or “moral economy” protest with the brush of out-of-favor ideas of relative deprivation, we ignore much fertile territory in the study of contentious politics and discount possible fruitful perspectives for the social psychological analysis of resisters. Finally, to the extent that perceptions of actually declining conditions (rather than just a failure of improving conditions to keep pace with expectations over time) constitute a form of relative

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deprivation, there is perhaps yet hope for rehabilitating at least one facet of that set of theories.

Conclusion Though much has been written about nostalgia in contemporary China, this literature is as yet inchoate and unsystematic. Building on the consolidation of perspectives and the hypotheses advanced here, future research ought usefully to concentrate on searching for relational nostalgia paired with additional subtypes and on further elaborating the mechanisms through which nostalgia shapes worldviews in contemporary China. Also, nostalgia as rhetoric or metaphor for the articulation of contentious claims remains understudied. A better understanding of this use of nostalgia will enable us to get an improved handle on an important dimension of contentious outcomes. So long as conceptual distinctions are maintained, work on nostalgia at all points along the causal chain can contribute to this agenda. Specifically, laid-off Chinese workers tend toward different nostalgic visions, based on the regions in which they live. Northeastern workers, inspired by a three-dimensional nostalgia for the Maoist order, are much more prone to mobilize collectively than their counterparts elsewhere. Central Coast workers, nostalgic only for their relative political status and power under the old order, generally confine any mobilization to attempts to bend the rules of the post-socialist order to their goal of restoring their lost status vis-a-vis enterprise managers. Finally, workers in the Upper Changjiang and North–Central regions frequently seek to influence state actors to restore their status and power, but also more importantly to protect their currently precarious livelihoods. These subtypes of nostalgia are just some of those observed in contemporary China. Retired workers, villagers, former zhiqing youth, as well as artists and intellectuals have all expressed different subtypes of nostalgic feelings for the pre-reform past. These, in turn, have also helped shape the frequency and style of contention by each of these groups. Beyond the study of China, testing and refining of the hypotheses presented here represents a new avenue of research on social movements and contentious politics—one that perhaps rehabilitates select portions of older paradigms and that restores particular kinds of grievances and perceptions to the center of analysis. China and other countries in the midst of drastic and dramatic economic change and social upheaval provide nearly ideal settings for pinning down how different types of backward-looking frames contribute to specific forms of contention.

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Notes 1. On how scholars have disagreed about nostalgia’s influence on workers’ contention, see William Hurst, “Understanding Contentious Collective Action by Chinese Laid-off Workers: the Importance of Regional Political Economy,” Studies in Comparative International Development, 39: 2 (Summer 2004), pp. 102–103. 2. Hesiod, Theogony & Works and Days, translated with introduction and notes by M.L. West (Oxford: Oxford University Press, 1988), p. 40. 3. The China Review, 5: 2 (Fall 2005), guest edited by Guobin Yang and MingBao Yue, with articles by these two editors as well as: Lei Ouyang Bryant, Jennifer Hubbert, David J. Davies, and Xiaomei Chen; Ching Kwan Lee and Guobin Yang (ed.), Re-envisioning the Chinese Revolution: The Politics and Poetics of Collective Memories in the Reform Era (Washington & Stanford: The Woodrow Wilson Center & Stanford University Press, 2007). 4. Ching Kwan Lee and Guobin Yang, “Introduction: Memory, Power, and Culture,” in Lee and Yang, Re-envisioning the Chinese Revolution, p. 3. 5. See Jonathan Unger (ed.), Using the Past to Serve the Present: Historiography and Politics in Contemporary China (Armonk: M.E. Sharpe, 1993). 6. Elizabeth Perry has already made great headway in differentiating subtypes of nostalgic claims. See Elizabeth J. Perry, “Crime, Corruption, and Contention,” in Merle Goldman and Roderick MacFarquhar (ed.), The Paradox of China’s Post-Mao Reforms (Cambridge: Harvard University Press, 1999), pp. 317–325. 7. Guobin Yang, “China’s Zhiqing Generation: Nostalgia, Identity, and Cultural Resistance in the 1990’s,” Modern China, 29: 3 (July 2003), pp. 267–296. 8. See Kevin J. O’Brien and Lianjiang Li, “Campaign Nostalgia in the Chinese Countryside,” Asian Survey, 39: 3 (May–June 1999), pp. 375–393; Lianjiang Li, “Support for Anti-Corruption Campaigns in Rural China,” Journal of Contemporary China, 29 (November 2001), pp. 573–586; Geremie R. Barmé, In the Red (New York: Columbia University Press, 1999); Shades of Mao (Armonk: M.E. Sharpe, 1996); Ching Kwan Lee, “The ‘Revenge of History’: Collective Memories and Labor Protests in Northeast China,” Ethnography, 1: 2 (December 2000), pp. 217–237; “The Labor Politics of Market Socialism: Collective Inaction and Class Experiences among State Workers in Guangzhou,” Modern China, 24: 1 (January 1998), pp. 3–33; “Pathways of Labor Insurgency” in Elizabeth Perry and Mark Selden (eds.), Chinese Society: Change, Conflict, and Resistance (London: Routledge, 2000), pp. 41–61; and “From the Specter of Mao to the Spirit of the Law: Labor Insurgency in China,” Theory and Society, 31: 2 (April 2002), pp. 189–228. 9. On nostalgic mythologies, see Lee, “Revenge of History,” pp. 227–228; O’Brien and Li “Campaign Nostalgia,” p. 391; William Hurst and Kevin J. O’Brien “China’s Contentious Pensioners,” The China Quarterly, no. 170 (June 2002), p. 356. On “imagined memories,” see Ching Kwan Lee, Against the Law: Labor Protests in China’s Rustbelt and Sunbelt (Berkeley: University of California Press, 2007), p. 151; and “What Was Socialism to Chinese Workers? Collective

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10. 11. 12. 13. 14. 15.

16.

17. 18. 19.

20. 21. 22. 23.

24. 25.

26. 27.

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Memories and Labor Politics in an Age of Reform,” in Lee and Yang, Re-envisioning the Chinese Revolution, p. 158. Yang, “China’s Zhiqing Generation,” pp. 269, 276, and 286. Lee, “What Was Socialism to Chinese Workers?” pp. 161, 162. Lee, Against the Law, pp. 140–141, 147. Ibid., p. 151. Hurst and O’Brien, “China’s Contentious Pensioners,” p. 356. For more on the utility of comparing across such social groups, see Lowell Dittmer and William Hurst, “Analysis in Limbo: Contemporary Chinese Politics amid the Maturation of Reform,” Issues and Studies, 38: 4/39: 1 (December 2002/March 2003), pp. 33–35. On a four-dimensional definition of working-class formation, incorporating “structural proletarianization,” “shared ways of life,” “shared dispositions,” and “class-based mobilization,” see Ira Katznelson, “Working-Class Formation: Constructing Cases and Comparisons,” in Ira Katznelson and Aristide R. Zolberg (eds), Working-Class Formation: Nineteenth-Century Patterns in Western Europe and the United States (Princeton: Princeton University Press, 1986), pp. 14–21. I define Coastal Shandong as Weihai, Yantai, and Qingdao cities. The rest of the province I define as Inland Shandong. Interview, fifty-eight years old, female, retired coal miner, Benxi, November 2001. Interview, forty-three-year-old laid-off coal miner, Benxi, November 2000. A similar phrasing was used to make a similar point in an internal journal article entitled “Zhongguo Jingji de Tedian jiu shi Wenti Tebie Duo” (The Special Point of China’s Economy is that its Problems are Especially Numerous) Lingdao Juece Xinxi, no. 38 (2002), p. 22. Interview, thirty-nine years old, male, laid-off coal miner, Chongqing, March 2002. Numerous interviews in Chongqing, Datong, Luoyang; for example, several laid-off workers protesting at the Datong city government, July 8, 2002. Interview, forty-eight years old, female, laid-off government worker, Shanghai, May 2002. William Hurst, “Mass Frames and Worker Protest,” in Kevin J. O’Brien (ed.), Popular Protest in China (Cambridge MA: Harvard University Press, 2008), pp. 71–87. Hurst, “Understanding Contentious Collective Action by Chinese Laid-off Workers.” This generally conforms with Lee’s characterization of worker memories as “hierarchical”: Ching Kwan Lee, “What Was Socialism to Chinese Workers? Collective Memories and Labor Politics in an Age of Reform,” in Lee and Yang, Re-envisioning the Chinese Revolution, pp. 156–158. Lee and Yang, “Introduction,” p. 7. See, e.g., William A. Gamson, Bruce Fireman, and Steven Rytina, Encounters with Unjust Authority (Homewood: Dorsey, 1982); Robert D. Benford and

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28.

29.

30. 31. 32. 33. 34. 35 36.

37.

38.

39.

40. 41.

William J. Hurst David A. Snow, “Framing Processes and Social Movements: An Overview and Assessment,” Annual Review of Sociology, 26 (2000), pp. 611–639. Benford and Snow, “Framing Processes and Social Movements,” p. 615; William A. Gamson, Talking Politics (Cambridge: Cambridge University Press, 1992). William K. Carroll and Robert S. Ratner, “Master Frames and CounterHegemony: Political Sensibilities in Contemporary Social Movements,” Canadian Review of Sociology and Anthropology, 33: 4 (November 1996), pp. 407–435. Interview, Benxi city official, November 2000. For more detail on the use of nostalgia in claim-making, see Hurst, “Mass Frames and Workers’ Protest.” Feng Chen, “Worker Leaders and Framing Factory-Based Resistance “in O’Brien, Popular Contention in China, pp. 88–107. See, e.g., Lee, “What Was Socialism to Chinese Workers,” pp. 158–162. Perry, “Crime, Corruption, and Contention,” pp. 317–321. Ibid., pp. 321–325. Ted Gurr, “Psychological Factors in Civil Violence” World Politics 20: 2 (January 1968), p.253 (italics original). Ted Gurr, “A Causal Model of Civil Strife: A Comparative Analysis Using New Indices,” The American Political Science Review 62: 4 (December 1968), pp. 1104–1124; and Why Men Rebel (Princeton: Princeton University Press, 1970). James C. Davies, “Toward a Theory of Revolution,” in Barry McLaughlin (ed.) Studies in Social Movements (New York: The Free Press, 1969), pp. 85–109. For example, Edward N. Muller, “A Test of a Partial Theory of Potential for Political Violence,” The American Political Science Review 66: 3 (September 1972), pp. 928–959; and Abraham H. Miller, Louis H. Bolce, and Mark Halligan, “The J-Curve Theory and the Black Urban Riots: An Empirical Test of Progressive Relative Deprivation Theory,” The American Political Science Review 71: 3 (September 1977), pp. 964–982. Stephen G. Brush, “Dynamics of Theory Change in the Social Sciences: Relative Deprivation and Collective Violence,” The Journal of Conflict Resolution 40: 4 (December 1996), pp. 523–545. Gurr, “Psychological Factors in Civil Violence,” p. 256. On the maintenance of a stable moral economic order in a profitable SOE in a prosperous Chinese city, see Jonathan Unger and Anita Chan, “Memories and the Moral Economy of a State-Owned Enterprise,” in Lee and Yang, Re-envisioning the Chinese Revolution, pp. 119–140.

Part 3 Workers’ Welfare and Reemployment

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Chapter 6 China’s Older Workers: Between Law and Policy, Between Laid-Off and Unemployed Mary E. Gallagher

Substantial layoffs in China’s state and urban collective sectors began in the early 1990s.1 Important government regulations and edicts on xiagang followed in the late 1990s after the fifteenth Party Congress, which announced a new intensification of the state-owned enterprise (SOE) reform process, including top leadership support for massive layoffs and privatization of small and medium SOEs. The policy of allowing SOEs to lay off large numbers of workers by designating these workers “xiagang” is a temporary policy that targets a certain class of workers for a limited period of time.2 While in English the term “laid-off” has a mostly economic connotation (something done by a company to a worker or group of workers), the term xiagang in Chinese is also a political term and a classification that is closely linked to government and Party policy toward SOE restructuring. This term is also linked to the phasing out of the previous employment system, which was characterized by lifetime employment, cradle-to-grave benefits, and very limited labor mobility. As a political designation, the category of xiagang is limited to whom it applies. Workers who entered their workplaces as permanent workers (guding zhigong) may be laid off using this designation.3 Only employees in state or urban collective firms qualify for the benefits that kick in following the layoff. Foreign and private companies may not trim their workforces by invoking the policy of xiagang.4 As workers in all enterprises are

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now hired on labor contracts, the number of previously permanent workers falls every year. By 1996 the labor contract system was nearly universal. Indeed the government has noted from its first official policies on xiagang that this was a temporary policy to be phased out in the near future. Granting redundant SOE workers a special designation was both a political and economic necessity. Economically the pressure to reform SOEs had been building since the 1980s but had quickened with the steep rise in FDI and the expansion of the non-state sector that began in 1992. A key problem facing SOEs in their attempts to achieve a turnaround was the large redundant workforces that burdened these companies as well as large welfare bills and heavy retirement burdens. The SOE burden was seen in contrast to the situation in the non-state sectors, which tended to employ younger workers, often migrants from the countryside, often evading many of the social welfare requirements mandated by the state. Due to political considerations, however, SOE workers could not be thrown out to face “society” and the likelihood of long-term unemployment. As SOE workers they enjoyed a relationship with the state and the Party that went beyond simple labor relations. First and foremost, former permanent workers did not enter the SOE workforce freely but were given their jobs through the state’s system of labor allocation. Second, they worked for wages that were not set through a market mechanism or even through the arbitrary decision of their enterprise managers, but rather that were decided by government decree. Older workers in this system went through many years of wage stagnation. Therefore, these workers’ contribution went beyond the labor–wage nexus but rather made up a larger, collective contribution to the nation’s building and economic development. For these reasons, formerly permanent SOE workers have been laid off in ways that differ from the common conception of the term “layoff.” The xiagang mode of layoffs also differs from how most Chinese workers are let go in the contract system—through the expiration of the labor contract—which is now becoming the standard method of employment termination. This chapter examines the relationship between the xiagang policy and the other major change in Chinese labor relations, which is a new emphasis on law and market forces to regulate labor markets as opposed to the previous system, which relied heavily on state allocation and administration of labor with limited labor mobility. This reliance on law and markets has enhanced the power of capital at the expense of workers’ interests not only because of the legal emphasis on labor contracts, which are usually shortterm, but also because many of the protective clauses of Chinese labor law have been undermined by a lack of implementation and lax government regulation of business.

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I argue that there is an important separation between xiagang policy and labor law—both in government thinking and policy development and in real implementation and manifestation in society. This separation has two important consequences: first, the emphasis on policy as opposed to law for the implementation of xiagang reduces the legal avenues and channels open to xiagang workers who resist or oppose certain elements of the policy or the way in which it has been implemented in their locality and by their firm leaders. Second, as a government policy the practice of xiagang has granted a large, but ultimately finite, number of workers special preferential treatment with regards to social welfare and employment security. Older workers who are coming of age after the peak of the xiagang period will not be entitled to the same preferential policies meant for the laid-off. In fact older workers in China will face increasing employment insecurity and discrimination possibly leading to long-term unemployment of a large number of middle-aged and older workers. Because these older workers will come of age in the period of contract relations, they will also have fewer expectations regarding the employment relationship; they are not likely to expect employment to be stable from one year to the next, much less for life. There is logic to these differences between xiagang and China’s next generation of older workers. First, preferential policies that apply to former permanent workers in the state system are intended to compensate for their weaker ability to compete in China’s labor markets. Middle-aged contract workers on the other hand have grown up mostly during reform and have been able to enjoy educational and work opportunities unavailable to the “lost generation” of the Cultural Revolution, the generation hit hardest by the xiagang policy.5 Policies that give xiagang workers increased security and social welfare guarantees and treat “older workers the old way” and “new workers the new way” have been designed to dull the pain of adjustment to market forces for those least able to adjust. Second, the greater emphasis on law and market for China’s new contract labor workforce contains a greater degree of autonomy and room for legal mobilization. If one’s grievance is with an employer, then some legal options and avenues for redress now exist. If, on the other hand, one’s grievance is with the state and its xiagang policy, legal options are much more limited. This narrowing of legal options has affected the manner in which SOE workers protest their loss of social status and economic security, leading many to resort to the traditional methods of looking for patrons at higher levels.6 The underlying logic of these differences between labor law and xiagang policy is not merely economic but also contains a strong political component. While intended to compensate for disparities in ability and economic

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market worth of older and less old workers, the differences also encourage legal mobilization when it is against employers and discourage it when it is against the state. In the words of one experienced legal aid litigator for workers, “xiagang is a policy; you can’t do very much against a policy.”7 The development of labor law and new channels for dispute resolution are intended for China’s new contract workforce, for those who enter the employment relationship freely but at a disadvantage vis-à-vis more powerful management and business owners. These new developments are not designed to challenge or delay the government’s own intentions to reduce the SOE workforce and permanently remove expectations of lifetime employment and cradle-to-grave benefits.

Policies of Xiagang: “Support Some, Insure Others, and Push the Rest to the Market” Since the 1990s it is estimated that over thirty million SOE workers in China have been laid off.8 However, rather than being limited to just one type of layoff policy, SOE managers and local officials have designed numerous subtypes of xiagang.9 All of these policies are designed to reach four policy goals: (1) reduce redundant workers; (2) reduce SOE welfare and social welfare insurance burdens; (3) change forever the relationship between the firm and its employees by gradually phasing in contract labor relations and reduced enterprise contributions to employee welfare. Finally, China’s xiagang policy was intended to (4) reduce social instability and worker unrest by gradually introducing SOE workers to the shock of labor markets and contract labor relations through the provision of welfare benefits and reemployment training. As this section will show, these variations on xiagang are often informal and flexible; they tend to grant management a large degree of arbitrary power and control over the fate of individual employees. Many of these policies are built on the long-term continuation of some form of labor relations. These characteristics make legal channels more difficult to pursue for reasons that will be explained later. As with many other aspects of China’s economic reforms, the policies of laying off SOE workers developed first as spontaneous innovations by enterprise managers and local officials, and were only incorporated into official national policy after several years of local experimentation. Once the xiagang policy was formalized and legitimized by the central government’s support, it was then implemented as a nationwide policy of SOE restructuring and adjustment. What began as localized experiments became national policy and in its implementation as national policy,

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xiagang was once again subject to the vagaries of local capabilities and situations. In this stage of implementation, local adjustments and countermeasures once again came into play and created important regional and sectoral differences in the way that workers were laid off. Much of the research for this chapter was done in Shanghai where government officials consider the xiagang policy to be relatively successful, achieving layoffs without considerable social instability. In interviews, some Shanghai officials credited their success with Shanghai’s adoption of policies and measures that were different from many central edicts of the Ministry of Labor.10 Therefore even though the Shanghai experience has been emulated by many other provinces and cities, it is hardly the norm. In addition to these policy differences, Shanghai’s rapidly developing economy afforded the local government much space in which to formulate policies that relied heavily on the assumption that non-state employment opportunities would dull the pain of layoffs and reduced social welfare support from SOEs and the state.11 Many other regions hit hard by layoffs, especially China’s northeast and central regions, have not been able to rely on the market to pick up when state allocation of employment ended. The official xiagang policy as designated by the State Council covers public sector workers who fulfill three basic conditions: (1) they entered the enterprise as permanent workers under the old system, before the implementation of the labor contract system in 199612; (2) they do not have any job at their workplace but they have yet to sever labor relations with their employer; and (3) they have not found new employment elsewhere. Workers who qualify for xiagang then sign a “layoff agreement” with their employers and enter their enterprise’s “reemployment center” for a three-year period. During this period while labor relations with the original employer are not cut, the reemployment center (usually attached to the same enterprise) is responsible for the monthly payment of a living stipend and the social insurance fees, generally pension and medical. These monthly payments are generally much lower than the worker’s former salary and, depending on the health of the enterprise itself, can be as low as CNY100 per month. The reemployment “center” is often just an administrative office within the existing firm; therefore its importance as an independent entity actually competent in reemployment should not be exaggerated.13 In reality the creation of these reemployment centers was more as window dressing—as a psychological division from the original workplace, and as a way station between the old system of permanent employment and the new system of labor markets. Because the reemployment center was the responsibility of the enterprise, the presence of the center did not significantly change the sense of dependency on the former employer.

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During this three-year period the goal is to find workers new positions in other firms. These employment opportunities could come from the worker himself, from the reemployment center, or from some special government program that targets workers who are difficult to reemploy, such as the “40–50 Program” created to help older workers. After three years if the worker has still not found new employment, he should still cut labor relations with his original employer and qualify for unemployment insurance, which will supply unemployment benefits for up to two more years. After these two additional years if the worker still has not found stable employment, he can then apply to receive the “dibao,” a social welfare program that supplies the most basic assistance to the urban poor. In 2004 Shanghai, this payment amounted to about RMB 290 per month. Dibao recipients in Shanghai have increased rapidly in concert with the rise in unemployment and laid-off workers. In 2002, 431,600 people were dibao recipients, up from 187,000 in 1999, an increase of 130 percent. Of the people receiving dibao in 2002, 170,000 were unemployed, 240,000 were “adults of working families” (zhigong jiating chengyuan), and 90,700 were workers laid off using the “xiebao” designation, which is described later. Clearly a great number of workers, including most likely many formerly laid-off SOE workers, continue to need state assistance even as they enter the realm of the reemployed. This official framework is notable for its reliance on reemployment as the main source of settlement for laid-off workers and for its emphasis on a rather short time frame in which to achieve a complete turn around. This turnaround includes the severing of labor relations with the old work unit and the establishment of new legal labor relations with a new employer through the new system, including a labor contract and various types of mandated employer-provided social insurance including pension insurance and medical insurance. In practice this framework was unrealistic and has led to many variations both on the xiagang policy and on how new employment opportunities would actually be realized. There were at least three major problems. First, reemployment opportunities were not substantial; this was particularly the case for workers most affected by xiagang—middle-aged and older workers whose skills and education did not match the new demands of the market or who were deemed too expensive by employers who preferred younger, more pliant employees.14 The lack of reemployment opportunities varied of course by region, with areas on the central and southern coasts most able to provide labor market opportunities to workers let go by state firms. However, even in Shanghai, reemployment of xiagang workers remained difficult and required special programs developed by the government both to create jobs for laid-off workers and to entice non-state firms

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to hire laid-off workers. These policies included tax breaks for xiagang workers who became self-employed, monetary compensation and tax breaks for firms that hired xiagang workers, special government reemployment programs that retrained xiagang workers in needed skills and even established businesses for their employment (especially the “40–50 Program” in Shanghai, which targets workers between 40 and 50 years of age),15 and the xiebao method of layoffs explained in greater detail later. Laid-off workers did not fare well in China’s new urban labor markets where youth, education, and skill remained paramount for well-paying, stable jobs while rural migrants remained the most attractive to fill posts that entailed hard manual labor, long hours, and substandard working conditions. Laid-off workers weren’t good enough for the first type of opportunities and they were too good for the second, or so both they and employers believed. For example, a survey of 2,300 laid-off workers in Wuhan and Jingzhou, Hubei Province, found that only 43 percent had found new work.16 Male workers were more likely to find new work than female workers and workers under thirty were six times more likely to find work than workers over fifty.17 Moreover, the work that xiagang workers found was often temporary, informal, low waged, and was generally in firms that offered a wage and nothing else—certainly not social insurance provisions. As in Shanghai, it is likely that most of these new jobs did not include the legally mandated protections of written labor contracts and employer contribution into social insurance. A survey of xiagang workers in Hebei found that 94.1 percent of reemployed workers surveyed were in temporary jobs.18 A xiagang policy whose success depended so critically on reemployment, especially reemployment that was formal and somewhat long-term, was not going to be successful. There were too few of these types of jobs to go around as mainly older laid-off workers competed with urban youth and increasingly with migrants from China’s inland and rural areas. A second problem was that workers resisted ferociously any attempts on the part of the enterprise to sever labor relations with them.19 As one labor lawyer in Shanghai put it, “the workers simply refused to go and you couldn’t force them to leave without making a really big mess.”20 This reluctance to sever ties includes workers in enterprises that pay very little in monthly subsistence and workers who have already found employment through other channels and have little real contact with their original employers. The attachment to the enterprise is not necessarily related to the current material benefits or lack thereof, but rather to the long-term importance of belonging to a work-unit (especially if state-owned), of belonging to an organization to which a claim can be made in the event of medical catastrophe, long-term illness, sudden change in fortune, or most likely the loss of the newly found employment. Even with new employment,

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workers’ attachment to their old danwei persisted as a rational “fallback.” Although the official media often portrayed xiagang workers as overly dependent and lazy, their behavior was directly related to the lack of security that new employment offered and to the very real possibility that there were no new reemployment opportunities for them. This reluctance to sever labor relations on the part of employees resulted in many variations on xiagang, half-way programs that reduced the labor costs of firms and trimmed the workforce that appeared for work everyday, but allowed employees to maintain labor relations with their original employer. These arrangements included “long term vacation” (changqi fangjia), “stop salary keep post” (tingxin liuzhi), “internal retirement” (neibu tuixiu), “early retirement” (qianti tuixiu), and “the social welfare agreement” (baoliu shehui baoxian xieyi). These policies alleviated the symptoms of redundancy but they did not solve the problem. In fact the maintenance of labor relations guaranteed that the original SOE employers would maintain their role as the main provider of social welfare, particularly in the event of a crisis such as illness or job loss. A third problem that also contributed to this rise in variations on xiagang was the reluctance of employers to implement the xiagang policy to the full, demonstrated by the setting up of reemployment centers and further support of xiagang workers for three years.21 Employers, too, often preferred the earlier-mentioned informal agreements to the standard xiagang policy. The xiagang policy itself was expensive to implement, required new skills that the employer did not have, and was itself built on the shaky premise that within three years these workers would be reemployed somewhere else and would no longer be the responsibility of the enterprise. SOE managers fully recognized that their long-term relationship with xiagang workers would not be easily erased simply by government fiat, in particular when new employment opportunities were exceedingly scarce. Therefore, enterprise managers did not always implement the xiagang policy but settled for something in between that would lower their costs and workforce numbers while paying out smaller subsidies that could be negotiated with workers individually based on their own circumstances. In many cases involving bankrupt enterprises or corrupt management, enterprise managers found ways, some illegal and some taking advantage of legal loopholes, to avoid payment of xiagang obligations, leaving workers to fend for themselves.22 These halfway xiagang policies were also more palatable politically as they could be implemented gradually and with wide managerial discretion. Many enterprises implemented these policies in such a way as to fragment and divide the workforce, thus reducing the likelihood of collective resistance. All of these problems point to a contradiction between policy and the reality of employment relations in SOEs and other public firms. The

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xiagang policy envisioned a cutting of ties that was built on legalistic language and artificial boundaries between the enterprise, the reemployment center, and the worker. In reality the ties within SOEs were exceedingly difficult to sever and both employer and employee looked for half-way measures that would achieve some of the goals of xiagang without the more unrealistic expectations of the original policy. Shanghai pioneered a policy in 1998 that attempted to formalize these half-way measures, encourage reemployment in the non-state sector, and reduce the costs of layoffs to SOEs.23 “Agreement to keep social insurance relations” (baoliu shehui baoxian xieyi or “xiebao”) is an agreement negotiated between an employer and employee and approved by the Labor Bureau and is intended for older workers who are within ten years of retirement age. In this agreement the employee agrees to look for other employment and to accept termination of his salary from his original danwei. In return, his work unit continues to make the minimum payments for the employee’s pension and medical insurance. These agreements could be reached at anytime and were intended as substitutes for the standard xiagang policy outlined earlier. Xiebao agreements remain in effect until the employee’s retirement at which point he can begin to receive his pension benefits. If the firm goes bankrupt, is acquired, or is privatized in the interim, the xiebao agreement should still stand; firm assets should be used to pay in one lump-sum any outstanding social insurance payments to xiebao recipients.24 Perhaps due to employment opportunities in the non-state sectors in Shanghai, xiebao agreements are quite popular in Shanghai. Some laidoff workers who did not qualify for xiebao or were not offered it by their management expressed dissatisfaction that they were not xiebao recipients and therefore found it harder to find reemployment since firms preferred to hire xiebao workers who did not need social insurance.25 By 2000 it was estimated that over 140,000 laid-off workers had taken xiebao instead of the standard layoff agreement.26 In 2004 a leading labor lawyer and policy advisor to the Shanghai Bureau of Labor reported that over 500,000 workers in Shanghai have been laid off from SOEs using the xiebao method.27 Xiebao has been adopted by other cities and provinces and was heralded by a researcher at the Ministry of Labor as a model worth national study and emulation.28 A search of websites of local labor bureaus around the country reveal quite a few with policies on xiebao, including those of Suzhou, Wuxi, Beijing, Urumqi, Qingdao, and many other cities. As one researcher remarked “Shanghai’s invention has spread to other places.”29 The xiebao method has helped Shanghai restructure its SOEs faster than other regions that also had large SOE sectors. However, the xiebao method is also dependent on the existence of reemployment opportunities in the non-state sector. Shanghai’s dynamic economy and large inflows of

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foreign direct investment (FDI) have helped create an environment conducive to this practice. Xiebao is successful because SOEs continue to subsidize the welfare costs of workers while firms in the non-state sector are then able to hire workers who are less expensive and who do not come with any social insurance burdens. Xiebao grants older SOE workers the basic guarantees of retirement pension and medical insurance, while still achieving the state’s goal of pushing SOE workers to the market. For SOEs this policy is discriminatory because they must continue to pay the costs of social welfare (albeit at much lower rates), while non-state firms are permitted to hire workers without responsibility for social welfare. However, for viable SOEs this policy is more desirable than the alternative, which includes continued difficulty in forcing workers to leave the firm and the security of the firm’s social welfare benefits. The statistics quoted earlier on dibao recipients also indicates that many laid-off workers who took xiebao continued to live in poverty, with nearly 20 percent of xiebao workers in Shanghai living below the poverty line. Xiebao, by allowing laid-off workers to maintain social insurance relations with their former danwei, implicitly recognizes that the real problem of reemployment of laid-off workers is not their laziness, dependency, or inability to accept new ways of thinking. Workers facing layoffs or unemployment, especially older workers, are worried about their ability to survive, including their most basic needs of food, shelter, and ability to support their children, whose education and future development is extremely important to their own long-term situation. Their ability to survive in China’s reform economy was threatened by the government’s one-sided decision to break the “social compact,” which had granted them basic social welfare with very low salaries. Now they face a loss of their social benefits and due to their years of low compensation, few have sizeable personal savings to rely on in the event of long-term unemployment, chronic illness, or some other catastrophe. Xiebao agreements recognize the importance of a safety net for older workers who already face considerable difficulties in China’s labor markets. Therefore, in a place like Shanghai where reemployment in the non-state sector is an option (albeit a low-paid, insecure option), workers are willing to accept this reduced social safety net.30 Some enterprises experimented with even more drastic measures to achieve the goals of the xiagang policy without the drawn out and expensive processes of reemployment and continued labor relations through a practice commonly known as the “buying out” of work years (maiduan gongling, or MDGL), also discussed by Kun-chin Lin in this volume. MDGL was the employer’s attempt to sever labor relations with an employee by paying severance for every year worked in a one-time lump-sum payment, ending

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labor relations permanently with the employee. Evidence from interviews and other sources seems to suggest that two kinds of employers preferred this method: enterprises with enough capital to pay out large severance packages, and enterprises in dire straits that were unlikely to survive. In both cases it may be that the workers in these firms were also more likely to agree to these buyouts. In the former firms workers accepted MDGL because the payouts were large; in the latter workers accepted MDGL because the payouts were likely to be all that would be forthcoming from the enterprise. This also accords with sources that say that MDGL first surfaced in China’s southeast, where SOEs were few and were also more likely to be doing well, and in China’s northeast where SOEs are quite numerous and where most are failing.31 However, many other firms in other regions have now experimented with MDGL, particularly as it became more accepted as a method of restructuring. A large multicity survey of seventy-four enterprises by the All-China Federation of Trade Unions (ACFTU) in 2001 revealed that 65 percent of the laid-off workers in these enterprises were laid off using some form of MDGL. A manager at a large SOE group in Tangshan, Hebei, reported in late 2003 that they expected to begin MDGL practices the following year after many years of using “internal redistribution” (neibu fenliu32) as the main strategy to solve redundancy. He believed that MDGL was now politically acceptable and therefore even in a more conservative province such as Hebei, a relatively well-off SOE could now implement the practice. A Shanghai labor official remarked in late 2002 that Shanghai allowed MDGL to occur “as long as we don’t call it that. The fact is, one shouldn’t have one’s work years bought and even if they could be bought, we (the government) wouldn’t be able to afford it!”33 His remark conveys some of the political sensitivity that surrounded this practice, which could be equated with buying out the long years of service under socialism. Because MDGL is often calculated as one month of pay for every year worked, the severance packages are not very large. (This is the same method used to calculate economic compensation for the early termination of labor contracts.) In enterprises without a lot of funds these packages were even smaller, often capped at twelve months of salary or given out in equal amounts of RMB10,000 regardless of years worked or salary. However, much research on MDGL seems to show that this process did not solve the problem of the labor relationship. Even after one’s labor relationship was bought out, workers were still inclined to search out their former employer, to complain that the payment was insufficient and very often to complain that their compensation was not as good as the compensation received by employees who waited the firm out and in the end got a better deal.34

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Xiagang and Labor Law: Barriers to Legal Mobilization Policies of xiagang, from xiebao to MDGL, all share some important characteristics that limited the ability of workers to use China’s developing legal framework for labor relations. First, xiagang policies were kept out of China’s new labor laws. The 1994 National Labor Law does not mention the word xiagang even though this category had already begun to exist in many SOEs. As a temporary policy of transition from a planned economy to a market-based one, it was not considered proper to include xiagang regulations in the basic law outlining the future of Chinese labor relations. Regulations were instead supplied mainly by the State Council and the Ministry of Labor. Local-level regulations and policies were also important and there continues to be some degree of variation between regions in policymaking and implementation. The somewhat unclear legal status of xiagang and its relationship to procedures in the National Labor Law regarding employment termination affected workers’ ability to get their grievances heard in administrative and legal procedures created to resolve labor disputes. Many Labor Arbitration Committees (LACs; under the jurisdiction of local labor bureaus) and local courts did not accept cases that dealt with issues related to xiagang on the grounds that this is not within their jurisdiction.35 Many LACs looked only for contractual issues in deciding whether or not to accept a case for hearing. Laid-off workers who are former permanent workers do not necessarily qualify. For example, if a permanent worker has signed a labor contract and has then been let go due to firm restructuring or privatization, the case will qualify as a labor dispute. But if the worker is old enough to have been exempted out of the contract system and then laid off, his case may be rejected. The legal options of opposing xiagang are limited if local labor bureaus and courts take a narrow, formalistic view of this issue, which many do in order to reduce their caseloads. Administrative attempts to reduce the legal channels for grievances related to xiagang reached higher levels, including an opinion released by the Guangdong High Court in 2002.36 According to a Sichuan labor law professor and part-time arbitrator for the Chengdu Labor Bureau, the Guangdong opinion was regarded as a signal of a more general policy: cases related to xiagang should not be resolved through the courts.37 In 1994, the Ministry of Labor also ruled that disputes involving work unit housing funds are not within the jurisdiction of labor disputes; this decision was reiterated by the Guangdong High Court in the same decision. In these policy decisions we see major issues of SOE worker grievance barred from judicial hearing.38

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Local governments have also taken additional measures to redirect workers’ grievances involving social welfare and social insurance claims. In Shanghai the Bureau of Labor has created special committees to hear disputes involving social welfare, which make up a large number of the annual disputes, about one-third of the total number in 2002. Chongqing Municipality took even more serious steps to limit the legal mobilization of workers when its Bureau of Labor and Social Security signed an agreement with the Chongqing Higher Court to no longer accept pension disputes. Following the release of this Labor Bureau document in 2001, neither the Chongqing Labor Arbitration Committees nor the courts accepts cases involving pension disputes; instead workers must go to the administrative offices of the local labor bureaucracy to “lodge a report” (jubao). The reasons given by the Labor Bureau were that these types of cases were increasing too quickly, involved too many issues, and had too large an impact.39 These attempts to limit access to administrative and legal institutions have been criticized heavily. Indeed, the fact that a major newspaper can publicly criticize the decision is indicative of the range of debate and disagreement not just over labor regulations but also over the parameters of citizens’ legal rights. The article goes on to quote a leading Chongqing lawyer’s opinion of this new practice: This document deprives citizens of their right to judicial relief. It leads to the violation of the legal rights of the vast majority of Chongqing workers. The problem is extremely serious . . . That China, having just entered the WTO, can still have in its fourth autonomous municipality a Bureau of Labor and Social Security that issues documents like this, is really unbelievable.40

In addition to these administrative and legal attempts to deflect and redirect grievances related to xiagang, the very nature of the xiagang relationship made it exceedingly difficult for a worker to lodge an arbitration suit or in the event that the arbitration committee refused to take the case, to sue in civil court. Taking the issue to the local government or local court is a last straw option, not one that workers take lightly, because it often permanently sours the relationship between the employee and his former danwei. Much of the xiagang relationship is decided through negotiations between managers and workers and much arbitrary power is in the hands of management. For example, managers decide which workers receive xiebao classification; they can just as easily deny this classification. Managers decide on the exact amount of social welfare payments that will be paid by the employer and what proportion by the employee. Although the rules and regulations on xiagang mention “negotiations on an equal

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level,” in reality the manager dictates the agreements. The informal and flexible nature of these variations on xiagang further increased the barriers to legal recourse by enhancing the arbitrary decision-making power of management. Despite these barriers xiagang workers have attempted to use China’s new and growing body of labor law to protect their rights and interests. According to a leading legal aid representative in Shanghai, their center receives many laid-off workers seeking to find some legal recourse to regain their original jobs or to receive more economic compensation or living subsidy.41 However, this representative, who has litigated over one hundred cases in Shanghai in the past three years, is generally pessimistic when it comes to xiagang cases. “If you are a xiagang worker, you have no choice. You can only hope to improve the monetary compensation.” Only in a few cases has she been able to turn around a xiagang designation when it was found that the enterprise did not qualify under the xiagang policy, most often because it was not a state or collective enterprise. In her cases, the main point of the lawsuits was to improve the economic compensation (based on years worked) or the living subsidy. The process of legal mobilization for a xiagang worker is, however, rife with dangers, delays, frustrations, and disappointments. While this is the case for many workers more generally, xiagang workers often have a particular weakness: many still have “labor relations” with their original firm. According to lawyers and researchers in many cities in China, in most cases workers opt for the legal option only after they have left their firm. Otherwise, xiagang workers risk alienating those who will continue to control their layoff package, even their long-term welfare, through control of payments for their pension and medical insurance. As a temporary and special classification specific to the period of transition between the planned economy and a market-based one, policies of xiagang have not been well-integrated with China’s growing body of labor and employment law. China’s administrative offices and courts have also made many attempts to restrict the issues that can be legitimately contested. The rise of many variations on xiagang that are reliant on informal and flexible arrangements between employed and employer have further reduced the space for xiagang workers to successfully lodge grievances through legal channels. When it comes to facing unemployment, xiagang workers have been granted some preferential treatment including gradual entrance into China’s unforgiving labor markets and the continuation of some limited social welfare support from original employers and local governments. Legal avenues are narrowed but informal and flexible policies have been created to offer some basic guarantee of subsistence and security. The final section examines the situation for the workers who, having

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missed the xiagang period of layoffs, now find themselves in the new world of labor markets and contract employment.

After Xiagang: Employment Termination in the Age of Contracts Since the early 1980s China has gradually developed a legal framework for employment that is based on labor contracts. The labor contract system was first implemented in the development zones that were opened to attract foreign direct investment and end China’s period of economic autarky. Contracts were then slowly implemented in other regions and other types of enterprises. For a long period of time between 1986 and 1995 older workers were grandfathered into the old system of permanent employment while newly hired workers signed labor contracts. In 1995, when China’s first National Labor Law went into effect, the labor contract system was made universal; all employees were to sign written contracts with their employers. Labor contracts are generally form documents prepared by the employer that specify the basic terms of employment including description of position, salary and benefits, conditions for contract termination, and the date of the contract’s expiration. Other clauses can be added as necessary. The labor contract system is an important part of the Chinese government’s attempts to adjust its labor system to the shocks of a market economy and much has been made of the contract’s ability to protect employees from the arbitrary behavior of management and the extreme employment insecurity that prevails in systems in which at-will employment is the norm. Much has also been made of the fact that the contracts replaced de facto lifetime employment and that in almost all instances they provide terms far less favorable than those previously enjoyed by workers. Labor contracts are intended to provide some basic guarantees of employment conditions and mitigate the hard edges of labor markets, while at the same time removing many of the protections and entitlements that urban workers enjoyed under socialism. As an example of the protection effect, employment termination in China, if done legally, is harder to accomplish if the labor contract is still in effect and the worker has done nothing to violate company rules or otherwise harmed the company. Companies cannot simply fire employees at will but need to show cause; even in the event of economic difficulties, companies need to provide specific proof that conditions are bad enough to warrant layoffs. The protection effects of labor contracts are, however, increasingly outweighed by the greater power and flexibility that contract labor awards to

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employers. Termination of employment is easily accomplished through nonrenewal of an existing labor contract. Once a contract has expired, the company does not need cause nor does it need to seek the permission of either the trade union or the local labor bureau. Moreover, the National Labor Law does not require that companies pay any economic compensation to employees upon the expiration of the labor contract. The labor relationship is severed with no continuing responsibilities on either side. Chinese labor officials have attempted various measures to enhance the protections offered by the labor contract system, including the encouragement of longer labor contracts and a special “open-ended contract” for workers with tenure exceeding ten years at one company. The latter designation in particular was intended to protect the employment security of older workers. Shanghai’s 1995 Regulations on Labor Contracts also instructed that workers with ten years of tenure and three or less years from retirement could not be terminated, which was an added local protection to older workers. Moreover many provincial governments, including Guangzhou and Fujian, drafted implementing regulations for the 1994 Labor Law that provided for economic compensation even in the case of contract expiration, thus granting employees severance pay in the event of dismissal through contract expiration. Since 1995 these protections have eroded considerably in Shanghai and other regions; with this erosion, workers in the new contract system find themselves with little protections as they age and become less marketable and more expensive. Erosion has taken place for a number of reasons including (1) legislative competition between regions to provide investors with the most hospitable investment environment, which generally includes more flexible labor legislation; (2) administrative and judicial decisions that have generally favored interests of companies over the interests of workers; and finally (3) hiring trends that favor short-term employment. These erosions are particularly important because they define what is legally sanctioned and in so doing define the best possible protections, protections that are nonetheless often unrealizable in reality given the weak oversight and enforcement of the Labor Law and many companies’ tendency to ignore the law completely when it comes to labor and personnel decisions. According to the Labor Law, the “open-ended labor contract” (wu gudingqi laodong hetong) is a special labor contract with no specific date of expiration. Employees holding open-ended labor contracts are harder to terminate because the company must show cause, either the employee’s behavior or the company’s economic conditions. However the open-ended contract is only open to workers if three conditions apply: (1) ten or more consecutive years of tenure at a single enterprise; (2) the agreement of both

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parties to extend the term of the contract; and (3) the extension must be at the request of the worker. The requirement of the agreement of both sides has emasculated the role that the open-ended contract can have as most employers are loath to sign labor contracts that can be continued indefinitely.42 One expert estimated that in Shanghai still over half of the employees in SOEs had open-ended contracts, but he noted that these contracts are increasingly not welcomed by management and their number would decline precipitously as time went by. Most courts and LACs have interpreted the Labor Law to require joint agreement and therefore even if a worker requests an open-ended contract, the employer has the right to refuse. However there is considerable debate and disagreement among labor arbitrators and judges about this. In a recent case in Shanghai, an older female worker upon the expiration of her fixed term labor contract requested that her next labor contract be open ended. The company refused, offering only a fixed term contract. The worker filed an arbitration lawsuit, which she lost. She then contested the arbitration decision in court and won, with the court instructing the company to sign an open-ended contract. While an apparent victory, what followed made the legal victory a Pyrrhic one. Immediately after she signed her open-ended labor contract the company transferred the woman from Shanghai, where she lived, to Suzhou in neighboring Jiangsu Province. When she refused to accept the new position, she was fired. Once again in arbitration, the woman won after proving that this job reassignment was unreasonable and would impact her family’s welfare, including her elderly parents’. The company contested the arbitration decision and the disputants went to court a second time. As this point, the woman, exhausted from the many proceedings and wasted time, told her representative who had taken the case pro bono, that she knew that her choices were limited. She could not return to this enterprise because to do so would only be preparing to “wear small shoes.”43 Her best option she believed was to negotiate severance pay. In the end the company rejected her offer of CNY40,000, which was based in part on her long tenure, and offered her a paltry CNY10,000. In this particular case the woman’s decision to pursue an open-ended contract, in defiance of her company’s decision, not only did not end with an open-ended contract but instead ended in unemployment and disillusionment with the protections supposedly offered by law. The weakness of the open-ended labor contract is part of a general but unmistakable trend toward shorter labor contracts and a tendency by firms to favor “labor service contracts” (laowu hetong) over standard labor contracts.44 While no statistical data exists on the average term of labor contracts, many researchers have found that one-year contracts seem to be the norm. Many companies that initially signed contracts of three or more

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years with workers now sign one-year contracts, using measures such as benefits and other perks to attract and retain skilled labor while maintaining flexibility over its entire workforce.45 Labor service contracts have become attractive substitutes for standard labor contracts because these contracts have limited, if any, social insurance requirements and can be signed for very short-term periods. Workers with labor service contracts are sometimes employed formally at labor service companies, which then supply labor to firms as needed under a subcontracting arrangement. However in recent years many enterprises have used labor service contracts simply as a way to hire workers from society without the added legal burdens of social insurance and to further enhance flexibility. Recent visits to large multinational employers in Shanghai and Tianjin reveal a tendency to resort to these labor service agreements for most new hires, creating a tier of “second-class” workers who differ from regular contractual workers in social insurance benefits, wages, and degree of employment insecurity.46 Finally, local regulations and implementation guidelines for the National Labor Law have responded to the competition between regions for investment capital by further removing protections for workers. Shanghai’s 2001 Regulations on Labor Contracts removed completely the 1995 protection against termination of employees with ten years of tenure and less than three years to go before retirement. Fujian amended its regulations on labor contracts and removed the requirement that firms pay economic compensation upon nonrenewal of a labor contract. This decision was taken after a large multinational that had invested in Fujian threatened to move production to another province that did not require such compensation.47 Guangzhou has also removed this provision and few provinces now require compensation upon nonrenewal. Although these lost protections will not only affect older workers, they will impact them more severely because workers with longer tenure would generally receive larger compensation packages in the event of a contract nonrenewal. The weakness of the open-ended labor contract provisions also means that older workers will not have any special legal protections as they age and become perhaps less valuable to and more expensive for their employers. A final problem that older workers face in China’s very competitive labor markets where supply outweighs demand is age discrimination, particularly for workers over thirty-five. Chinese labor laws and regulations do offer a few antidiscrimination clauses, however these clauses only cover five kinds of discrimination—nationality, race, gender, religion, and physical disability. However if a perusal of the want ads in Chinese newspapers and employment agencies are any guide, the most prevalent types of discrimination are age, gender, and discrimination based on household

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residency. Age discrimination is routine and widely accepted. If older workers find themselves terminated or their contracts not renewed, they have no legal recourse against age discrimination. Combined with the declining legal protections described earlier, the lack of anti-age discrimination regulations is likely to further contribute to the employment insecurity of China’s older workers.

Conclusion: A Bleak Future for China’s Older Workers? The period of xiagang is now coming to an end as most provinces and cities shift those still without reemployment to the realm of the unemployed. Workers who are laid off in the future will be laid off through the early termination of the labor contract with paid severance generally equal to one month salary for every year worked. (This is a best-case scenario, which assumes that the enterprise follows the legal requirements.) Others will be let go through contract nonrenewal and will not qualify for severance compensation. Those who cannot find new jobs will be able to claim unemployment insurance for up to two years. The difficulties of the xiagang period, in particular the difficulty in severing labor relations with the original firm, will no longer be such a problem. The ties between workers and firms in China are already attenuated and the increasing trend of short-term contracts will magnify this weakening of ties. Some labor officials and judges have estimated that the ending of this period of transition and the increasing role of labor contracts and labor law (as opposed to xiagang policy) in employment termination will lead to a decrease or leveling off in the numbers of workers filing claims against their employers. There is an assumption that the legal clarity offered by contracts, detailing the exact date of expiration and the relevant obligations of the employer, will reduce friction and conflict. However, in recent years there has been no decline in labor disputes, although the rate of increase is no longer as fast as it was in the late 1990s. Moreover, despite the many attempts by local bureaus to head off disputes through mediation processes, the rate of increase in labor disputes for 2003 was nearly 23 percent faster than the rate for 2002. The number of people involved in labor disputes also jumped by 32 percent to over eight hundred thousand people, double the rate of increase in 2001. There is also some evidence from research at a large legal aid center in Shanghai that older workers are more likely to pursue the protection of their rights and interests through the legal channels provided despite the

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many obstacles and frustrations. Older workers not only have memories of a different, more stable style of labor relations that may propel them toward protest against the current system, they also may have less to lose. While younger workers may simply “lump” their grievance and look for new employment elsewhere, older workers may be more inclined by necessity to struggle for their rights. If older workers are increasingly facing unemployment, with little real chance of stable reemployment given severe age discrimination, then the legal options not only become less risky (since they already lost their jobs) but absolutely necessary in order to attain some compensation for what is likely to be a long period of unemployment.

Notes 1. The first official case of using the designation “xiagang” was in 1986 in a bankrupt factory in Shenyang, Liaoning Province. 2. Liu, Jin, Xiagang laodong guanxi chutan (Early Explorations on the Labor Relations of Laid-off Workers), Shandong Law Science, June; Information Office of the State Council of the PRC (1999), China’s Employment Situation and Policies, April; Wang, Chunzhao (2003), Xiagang zhigong zaijiuye xianzhuang jiqi jiejue duice tanxi (Exploration of the Current Re-employment Situation of Laid-Off Workers and Countermeasures for its Resolution), Theoretical Monthly 3 (2002); Luo, Chuanyin, Xiagang zhigong laodong guanxi tiaozheng (Adjustment of the Labor Relations of Laid Off Workers), China Labor 6 (1999); Chen, Xiaohui, Jihua jiuye dao shichang jiuye (From Planned Employment to Market Employment) (Beijing: Finance and Economics Publishing House, 2003). 3. There is significant variation across firms in classifying permanent versus contract workers. Although 1986 marked the beginning of the labor contract system for all new workers, in practice many workers who entered enterprises after that were still treated as permanent workers and allowed to participate in xiagang policies. 4. Other firms may use the classification “daigang” (waiting for work). Workers with this designation are sent home and should receive at least the legal minimum salary. The difference with xiagang is that there is no time limit and no opportunity for the firm to sever the employment relationship unless the labor contract expires or is terminated. 5. Eva P.W. Hung and Stephen W.K. Chiu, “The Lost Generation: Life Course Dynamics and Xiagang in China,” Modern China 29: 2 (April 2003), pp. 204– 236; Feng Chen, “Industrial Restructuring and Workers’ Resistance in China,” Modern China 29: 2 (April 2003), pp. 237–262. 6. Mary E. Gallagher, “Use the Law as Your Weapon!: Labor Conflict and the Rule of Law in PRC,” in Neil. J. Diamant, Stanley Lubman, and Kevin J.

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7. 8.

9.

10. 11. 12.

13.

14.

15.

16.

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O’Brien (eds), Engaging the Law in China: State, Society, and Possibilities for Justice (Stanford, Calif.: Stanford University Press, 2005), pp. 54–83. Interview, 2003. William Hurst, “Understanding Contentious Collective Action by Chinese Laid-off Workers,” Studies in Comparative International Development 39: 2 (Summer 2004), pp. 94–120. Yu, Faming, Perspectives on the Problems of Labor Relations of Laid Off Workers: How to Solve the Problems of Laid-off Workers Leaving Re-employment Centers (Beijing: Economic Science Publishing House, 2000). Interview, 2004. Interview, 2004. There is some variation in the cut-off date between SOEs implementing the labor contract system at different times. Some large, well-run SOEs signed contracts in the early 1990s while others still had not signed contracts by the end of that decade. Interviews with laid-off workers involved in legal disputes with their Shanghai employers indicate that many employers did not sign contracts until the mid-1990s or after. Interview, 2003; also see Jaeyoun Won, “Withering Away of the Iron Rice Bowl?: The Re-employment Project of Post-Socialist China,” Studies in Comparative International Development, 39: 2 (Summer 2004), pp. 71–93. On competition between laid-off workers and migrant workers from the countryside, see Yi Jiyou (ed.), A Social Development Bluebook of Shanghai, 2004: The Well-off Society: From Goal to Pattern (Shanghai: Shanghai Academy of Social Sciences Publishing House, 2004), p. 96; Ru, Xin, Bluebook of China’s Society: Analysis and Forecast on China’s Social Development, 2004 (Beijing: Social Sciences Documentation Publishing House, 2004); Yi, Hanning, “Shanghai guoyou qiye gaige de jiben jingyan” (Shanghai’s Basic Experience in Reforming State-owned Enterprises) Lilun dongtai, no. 1588. January 30, 2003. In the winter of 2003 while I was living in Shanghai, an older man was contracted by the management office in my building to fix a leak in our bathroom. His business card advertised his participation in the “40–50 Program,” which had retrained him as a plumber and then hired him into this stateowned service company. He was extremely proud of his participation and also that he could guarantee the quality of his services because his company was not run by a private boss (siren laoban) but belonged to the nation (guojia). The survey on which this article is based surveyed laid-off workers, 2312 in number, in the cities of Wuhan and Jingzhou in Hubei Province. The author does not provide information about sampling design or the survey’s implementation. For more, see Wang, Yong, “Dui guoyou qiye zhigong xiagang youguan falüwenti de sikao” (Reflections on Some Legal Problems Regarding Layoffs of State-owned Enterprise Workers.) China Labor 4 (2000); Wang, Zhenqi, Jiangsu sheng laodong zhengyi chuli jigou caiqu youxiao cuoshi zuohao qiye lituixiu renyuan he xiagang zhigong laodong zhengyi chuli gongzuo (Jiangsu Province Organizations Handling Labor Disputes Take Effective

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17.

18.

19.

20. 21. 22.

23. 24.

25. 26. 27. 28.

Mary E. Gallagher Measures to Handle Labor Disputes involving Retirees and Laid-off Workers) China Labor 9 (2000). According to most xiagang policies, workers under thirty are too young to qualify for layoffs, but instead should be treated as contract workers who receive economic compensation upon early termination. But in many cases SOEs did not implement the labor contract system even for younger workers, thus resulting in a large number of younger “guding gong.” He, Wenxiang, “Guifan xiagang zhigong laodong guanxi xuyao chuangzao huanjing” (The Standardization of Laid-off Workers’ Labor Relations Requires the Creation of an Environment) China Labor, 8 (1999); Zheng, Dongliang et al, “Guanyu guoyou qiye xiagang fenliu zhigong laodong guanxi chuli wenti de yanjiu” (Research on Problems in the Handling of the Labor Relations of SOE Laid-off, Redistributed Workers) China Labor, 11 (1998); Cheng, Yanyuan, “Woguo laodong zhengyi de fazhan bianhua yu laodong guanxi de tiaozheng” (Changes in theDevelopment of China’s Labor Disputes and Adjustments in Labor Relations), Laodong jingji yu laodong guanxi (Labor Economics and Labor Relations) 3 (2003); Lu, Jianbiao and Wang Haiyun, “Pochan, jianbing qiye zhigong laodong guanxi shehui baozhang yanjiu” (Research on the Labor Relations and Social Welfare of Workers in Bankrupt and Merged Enterprises) Labor Economics and Labor Relations, 6 (2003); Qian, Lian, “Yingxiang laodong zhengyi zhongcai gongzuo de jige yinsu” (Several Factors that Influence the Work of Labor Arbitration) Laodong jingji yu laodong guanxi (Labor Economics and Labor Relations), 4 (2003). Yu, Faming, “Guoyou qiye xiagang zhigong laodong guanxi chuli tansuo” (An Exploration in the Handling of the Labor Relations of SOE Laid-off Workers), China Labor, 11 (1999); Kang, Guizhen, Dui guoyouqiye xiagang fenliu zhigong laodong guanxi tiaozheng wenti de jidian renshi (Several Points to Recognize Regarding Problems in Adjusting the Labor Relations of SOE Laid-off, Redistributed Workers). Interview, 2004. Yu et al., “Guoyou qiye xiagang zhigong laodong guanxi chuli tansuo.” Interview, 2004; also, Zhao, Ziyun, “Qiye gaizhizhong de laodong zhengyi chuli” (Handling of Labor Disputes during Enterprise Restructuring), Lüshi shijie (Lawyers World), 4 (2001); Wang, Ling, “Lishun xiagang zhigong laodong guanxi bixu qianghua laodong hetong guanli” (Labor Contract Management Must be Strengthened in order to Straighten Out the Labor Relations of Laidoff Workers), China Labor, 6 (1998). Zheng et al., “Guanyu guoyou qiye xiagang fenliu zhigong laodong guanxi chuli wenti de yanjiu.” Dong, Baohua, Laozhigong falü zhishi: liangbai wen (Legal Knowledge for Older Workers: 200 Questions) (Shanghai: Shanghai Jiaotong University Publishing House, 2003). Interview, 2004. Yu, Perspectives on the Problems of Labor Relations. Interview, 2004. Yu, Perspectives on the Problems of Labor Relations.

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29. Interview, 2004. 30. In interviews with workers who had sued their employers over layoffs and contract termination, they were most concerned with the question of social security. Older, unskilled workers in particular looked for any possible way to maintain some kind of relationship with their former danwei as a way to ensure assistance in retirement or in the event of illness. Younger or skilled workers often settled for money and then left in search of a new job. 31. Zheng et al., “Guanyu guoyou qiye xiagang fenliu zhigong laodong guanxi chuli wenti de yanjiu”; Chou, Yinwang and Chou Jianmin, “Gaizhi qiyezhong laodong zhengyi Chuli” (Handling of Labor Disputes during Enterprise Restructuring), China Labor, 2 (2002); Zhao, Ziyun, “Qiye gaizhizhong laodong zhengyi chuli” (Handling of Labor Disputes during Enterprise Restructuring), China Labor, 4 (2002). 32. Internal redistribution is the reassignment of redundant workers to new positions within the enterprise, enterprise group, or subsidiaries. It often entailed a demotion, loss of some benefits, and lower wages. 33. Interview, 2002. 34. Gao, Yuhou, “Shenyang jiaoxiechang shishi zhigong xiagang xiang shiye binggui gongzuo de Qishi” (A Notice on the Side-by-Side Implementation of Employee Layoffs into Unemployment in the Shenyang Rubber Shoe Factory), China Rubber, 5: 18. 35. On nonacceptance of cases involving xiagang, see, e.g., “Mr. Zhu vs. X Metal Processing Co,” in Selected Labor Dispute Cases, pp. 52–57. It was not accepted by the local arbitration commission on the grounds that xiagang-related disputes were not within its jurisdiction. The worker then brought the suit to court. The first court also rejected it on the same grounds. Finally, in the second court appeal, the court ruled that this company (a foreign-funded enterprise) was not permitted to lay off workers using the xiagang policy nor could it lay off workers who were currently holding union positions. 36. Zhu, Mingshan, ed., Laodong hetong jiufen (Labor Contract Disputes) (Beijing: Zhongguo fazhi chubanshe, 2003). 37. Interview, 2004. 38. “Ministry of Labor Announcement on whether Disputes between Employer and Employee Related to the Sale of Housing and Other Problems Should be Accepted,” no. 312 (September 27, 1994). Republished in Zhou Wanling, ed., Union Handbook for the Resolution of Labor Disputes (Beijing: Zhongguo Gongren Chubanshe, 1999). 39. “Document 79 and Its Two Opponents,” Southern Weekend, January 16, 2003. 40. The article quotes Zhou Litai. He is a Chongqing lawyer who earned a reputation as a labor lawyer in Shenzhen. After earning the ire of Shenzhen officials, he returned to Chongqing. Southern Weekend, January 16, 2003. 41. Interviews, 2003 and 2004. 42. Interview, 2004. 43. This is an expression to describe deliberate punishment of someone through abuse of position or power, in this case retribution by an employer.

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44. Labor service contracts are signed between an employer and a subcontracted employee from a labor service company or some other type of employment introduction agency. They significantly reduce social insurance costs, salary, and employment security. Also see Dong, Baohua, Laodong fa lun (Theory of Labor Law) (Shanghai: Shanghai World Library Publishing House, 1999). 45. Interviews, 2003, 2004; Mary E. Gallagher, “Time is Money, Efficiency is Life: The Transformation of Labor Relations in China,” Studies in Comparative International Development, 39: 2 (Summer 2004), pp. 11–44. 46. These firms had expanded their workforce between visits in 1999 and 2003 mainly by hiring labor service workers through a third company. Managers preferred these arrangements because they reduced labor costs and increased labor flexibility (Interviews, Tianjin, October 2003; Shanghai, November 2003). 47. Interview, 2003.

Chapter 7 The Professional Reintegration of the “Xiagang” Li Peilin and Zhang Yi

For the majority of forty- and fifty-year-olds, middle age is synonymous with socio-professional success and family stability. However, for some of them, this period is full of regrets and distress. In China, the generation encompassing forty- to fifty-five-year-olds is atypical because the journey they have taken to get to this age has been extremely turbulent, marked as it has been by significant historical events; in particular, it was this generation that was sent to the countryside during the Cultural Revolution. Today, some of them are experiencing unemployment. In the former industrial regions where labor problems are concentrated, the popular expression “the phenomenon of the forty- to fifty-year olds” (si-wushi xianxiang) betrays the fact that age is a determining factor in the difficulties encountered by these people in becoming professionally reintegrated, precisely at a time in their lives when the burden they have to bear is heavy: financing their retirement, medical care, the education of their children, or supporting their parents. Members of this generation ourselves, although belonging to a privileged group, we would like to make a contribution to the formulation of constructive solutions in the face of this challenge. For quite a long period and until the recent past, China adopted a policy of central planning in labor, which led to a situation where there was full employment. Eventually, almost incomprehensibly, the notion of unemployment fell into a kind of collective black hole. From 1978, the year in which China launched into reforms that partially introduced the market into the economy, state-owned enterprises (SOEs) experienced a

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decentralization of their management. At the beginning, all social grades drew concrete benefits from this, as everyone’s income increased, even though we were witnessing the start of a growth in inequality. This is the phenomenon known by economists under the term “Pareto improving reform.” However, the reform of SOEs based on a reinforcement of decentralization made hardly any progress, and the evolution of urban economic reforms was marked in particular by the rapid development of the private economy. From the middle of the 1990s China began moving toward a demand economy characterized by an increase in competition. The changes brought about by the market in consumption brought with them an inevitable and far-reaching reconfiguration of industrial structures. Under the combined pressure of the market and the reorganization of industrial structures, the reform of SOEs thus touched on the sensitive territory of job security. The excess workforce at the state enterprises was “laid off” (xiagang) very rapidly. Today, while the majority of the population continues to experience a rise in income, many xiagang workers face material difficulties. Between 1996 and 2000, twenty-five million people found themselves subjected to xiagang. In 2002, there were another fourteen million unemployed or xiagang workers, whose material difficulties had an impact on several million families in urban areas. The concept of xiagang can be defined in the following way: it represents a kind of temporary arrangement of a social security system borne by SOEs during the period in which a labor market is created. This definition differs from that of unemployment.1 Generally, the economic situation of xiagang workers is better than that of the unemployed.2 Although the management of xiagang populations has been integrated into reform of the labor market since 2000, it has encountered strong resistance particularly in the towns where SOEs are concentrated, where heavy industry is important, or even those where natural resources are on the way to being exhausted. From 2001 the central government significantly increased its subsidies in order to allow the management of xiagang workers to be integrated with that of the unemployed following the example of experimental social security reform implemented in the industrial province of Liaoning. In this province, 736,000 people without employment were recorded between July 2001 and July 2002. The redundancy settlement paid out amounted on average to CNY7,340. The implementation of this new policy means that employees who lose their jobs are registered directly as unemployed; this allowed the reemployment centers to be closed at the end of 2002 and ensures the disappearance of the term xiagang. However, the Chinese labor market will remain strained for many years because of economic growth, industrial restructuring, the increased density

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of capital and technology, as well as the conditions of supply and demand in the labor market. Moreover, in the event of an external shock to the economy, the groups less capable of becoming professionally reintegrated are the ones that are most severely affected. Thus, SARS (severe acute respiratory syndrome) recently resulted in a new loss of jobs among the unemployed who had succeeded in reintegrating into the private sector, as well as in the temporary return to the countryside of 8 million migrants.

The Theoretical Framework and the Hypotheses Among the works that analyze the link between major historical events and the lives of individuals, an important theoretical current reflects an interest in the consequences of social upheaval on individuals. The work by Glen Elder, Children of the Great Depression (1974), provides one reference.3 In their work entitled “Children of the Cultural Revolution,” Zhou Xueguang and Hou Liren took up Elder’s hypothesis and applied it to China. To do this, they used questionnaires to conduct surveys in an attempt to measure the effects of the Cultural Revolution–era policy of sending educated youths to the countryside (shangshan xiaxiang) on the private and professional lives of the generation in question.4 In our own research, we take the opposite route: starting from an analysis of the motivations and actions undertaken by individuals, we will attempt to measure the possible social consequences of those actions. The changes brought about by the reforms aiming to introduce a market economy, and strong economic growth, mark a new historical stage, in the course of which individuals and the social structure will exercise a reciprocal action on each other. Individuals have increased their chances of fighting to improve their fate by adapting their behavior and their individual choices.

The Impact of Human Capital on Income Human capital is often retained as one of the most significant factors explaining income. Sociological research into social change has also demonstrated that, in parallel with industrial development, societies evolve toward knowledge-based and information societies in which human capital becomes more and more important. Following on from the human capital theory of Nobel Prize economist Theodore W. Schultz, countless

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studies have confirmed that in a market economy where competition is practiced, there is a positive relationship between human capital and the income of an individual.5 Although the definitions of human capital used by the various researchers are not identical, the majority of them rely on three key statistical parameters: the qualifications obtained or the number of years of schooling received, length of professional experience, and health. Sociologists accord great importance to the level of education, classed within human capital, in order to analyze social structures and changes in the social status of individuals. The theoretical models developed in this field demonstrate empirically that education level exerts a primordial influence on income levels and the possibilities of climbing the social ladder.6 In China, as a recent study reveals, the role of human capital as a factor explaining the income of individuals has expanded in the course of economic reform.7 These results have been confirmed by another study focusing on education level and its impact on socioeconomic status.8 However, our survey of xiagang workers in former industrial cities reveals that the more educated among them do not necessarily find work more easily, and even that their new salaries are no higher than those of the less educated. We describe this phenomenon as the “non-valorization of human capital.” Its appearance can be explained by a variety of factors. It is probable that, in a period of transition toward the market economy, the structural changes that ensue from that create an upheaval in the norms usually applied to the field of know-how and technical skills, bringing with it a kind of fracture in human capital, which thus does not necessarily exercise a positive effect. The labor market that confronts new university graduates illustrates this well: the differences in the levels of know-how and technical skill acquired at university explain the differentials in remuneration. Moreover, Yakubovich and Kozima have shown in the Russian context that human capital acquired in the framework of a planned economy is rapidly devalued in a market economy.9 Zhao Yandong arrives at an identical conclusion in a study conducted in 2000 among xiagang workers of the city of Wuhan. Human capital measured by the standard of knowledge and the technological level attained by xiagang workers before they were laid off does not exert any influence on the parameters of their new employment (salary, social value of the profession, degree of satisfaction, etc.).10 From this, we can formulate a first hypothesis: In this period when reference standards based on know-how and technical skills undergo an upheaval, human capital and remuneration level are not, in certain cases, correlated. This is particularly true for the generation that had to interrupt its studies during the Cultural Revolution.

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Social Identification Social identification is a complex phenomenon encompassing a variety of elements such as remuneration level, profession, family situation, age, sex, and so on. The subjective evaluation made by an individual of his socioprofessional status can thus diverge widely from that produced objectively by his income level. Surveys have shown that individuals tend to place themselves in the mean when they evaluate their socio-professional status. At an identical income level, women have the tendency to position themselves at an inferior status to men.11 It is precisely the existence of these differences that gives particular importance to research into social identification or class awareness, as there is often a close causal relationship between the social identification of an individual and his or her behavior or motivation to act. Between the different social classes the degree of uniformity in social behavior is not identical. However, those subject to strong pressures tend to exhibit a higher degree of uniformity in their behavior. To adopt the terms used by Olson, social groups of a small size or suffering strong pressures have a tendency to combine their efforts in order to achieve the same objective.12 Empirical results tend to demonstrate that the relationship between human capital and social identification is positive. In traditional societies inherited elements such as family or social identity generally exert a predominant influence on the social identification of an individual. But in modern societies, acquired dimensions, such as education level or type of employment, play a more important role. Thus Blau and Duncan in “The American Occupational Structure” insist on the determining role of education in the social identification of individuals.13 Zhang Yinghua, Xue Chengtai, and Huang Yizhi underline that the higher the education level of a person, the higher his own social identification.14 Huang Yizhi arrives at the same conclusion with regard to Taiwanese society.15 The social transformations that have appeared since the launch of the reforms in China similarly show a progressive rise in the role of education in the social position of the individual. Nevertheless, when surveying the factors that determine the perception that xiagang workers have of their social position, it appears that within this social group “education level” exerts a diminishing or quasi-zero explanatory power. While being interviewed, xiagang workers manifested a perception of their social position that was fairly uniform and relatively high, but that was not linked to their education level. These results contrast sharply with our surveys among migrant workers in urban areas, which reveal that the more a migrant is educated, the greater is his perception of his social position.16 One probable reason for this is that the incomes of xiagang workers and of migrants have

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evolved differently: the incomes of the former follow a downward trend, while those of the latter are rising. Our second hypothesis follows on from that: For a group whose income is declining, human capital loses its explanatory power in the perception that the individuals have of their social position; furthermore, the more pronounced this downward trend in income, the more marked the nonvalorization of human capital.

Unemployment among Xiagang Workers and Social Stability Numerous studies have shown that an increase in the unemployment rate has an impact on social stability. Bo Yibo, in a study conducted shortly after the foundation of the People’s Republic of China when the unemployment rate hit unprecedented levels (1950–1952), asserts: The economic crisis of the spring and summer of 1950 made life difficult for private businesses and industries, and many were forced into bankruptcy. Thus it was recorded in the fourteen largest cities of the country that 2,945 factories closed down. At the same time, 9,345 businesses in the sixteen largest cities had to partially suspend operations. This put several million people out of work, and their rancor was perceptible; despair and discontent spread rapidly among a section of the workers as well as among the poverty-stricken population of the cities.17

A link is frequently established between the unemployed or people without work and criminality: “According to police statistics in Shanghai, Tianjin, and Nanjing in a period of barely one year, that is from July 1993 to June 1994, 56.4 percent of robberies, fights, rapes . . . in these cities were committed by young unemployed people or xiagang workers.”18 Some researchers have even gone so far as to assert that the group representing the greatest threat to social stability is not the least fortunate category, that is, the poor in the cities or in the countryside, but most certainly the unemployed and xiagang workers from SOEs. Their discontent is in fact the strongest as a result of the deterioration, in both absolute and relative terms, in their social condition.19 In his works on the political opinions of destitute workers, Lipset champions the same point of view: The more a person lacks the experience and the feeling of stability, the more he will be inclined to accept simplistic political opinions, not to comprehend divergent opinions, not to adhere to the fundamental principles of tolerance,

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and finally to support progressive ideas aiming at the reform the political system.20

According to our survey, despite a strong homogeneity of social attitudes, certain differences among xiagang workers are difficult to explain by their economic situation or whether they are employed or unemployed. In fact, other surveys conducted in different cities reveal that between 30 and 60 percent of xiagang workers engage in a paid activity. In the city of Fushun, statistics from the labor office and from the social security office establish that around 50 percent of xiagang workers have a new “stable” activity: 20 percent “do not have a stable activity but often find work”; 10 percent “do not have a stable activity and are frequently without work; only 20 percent “have found nothing to do.” Numerous works draw a link between an increase in human capital and a rational and moderate social attitude. Our survey shows, in contrast, that discontent toward society emerges more easily among xiagang workers who have enjoyed a longer education but who today have a low income level and low social recognition. The non-valorization of human capital that creates a fall in income and social status reinforces the discontent of this category of xiagang workers. Our third hypothesis is: For a social category whose income is diminishing, the greater the loss of the explanatory power of human capital in the development of income and social status, the more this category will be dissatisfied with their current social situation.

Relationship between Human Capital and Life Plan The social situation of an individual is conditioned by structural or political factors independent of his own will, but he possesses room to maneuver to develop his personal future by relying in particular on his intellectual abilities, his perseverance, or his skill in seizing opportunities. In a society undergoing rapid development and in transition toward a market economy, this freedom to maneuver expands in proportion to the ever more important place afforded to human capital. In such a context, to avoid a rupture or a lack of valorization of human capital, it is essential to renew one’s knowledge. That being the case, training could allow the unemployed or xiagang workers to respond better to the needs of the market by reorienting their know-how and their technical skills. Our fourth working hypothesis is that in a social group whose income is falling, individuals who changed jobs or practiced different occupations enjoy greater success in moving to a new type of employment.

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Statistical Data and Presentation of Variables Sources of the Statistical Data Our research was conducted between the end of August and the middle of September 2002 in four cities in Liaoning province that share similar characteristics: Fushun, Benxi, Chaoyang, and Fuxin. All four have a large xiagang population and all face problems involving industrial conversion and the depletion of their natural resources. The surveys were carried out by interviews and questionnaires. The interviews were conducted at meetings bringing together members of government research centers, social security offices, planning committees, statistical bureaus, unions, the women’s federation, and district committees. They were also conducted during visits to the homes of xiagang families whose situation appeared particularly difficult. Our sampling for the questionnaires was designed in the following way. First of all, we decided that each city constituted a distinct sample. Then, we wanted to avoid standardizing the responses through sampling based on a unit that would have been formed by the enterprise. To do this, we randomly selected some forty districts, on the basis of lists provided by the administration, in which we picked, again at random, 6–7 xiagang workers to reply to our questionnaires. In total, we interviewed 1,110 workers, and 995 questionnaires were validated (90 percent).21

The Variables As displayed in table 7.1, the principal independent or explanatory variables are: education level (measured by the number of years of study, the qualification obtained, or the level of technical skill), age, membership or not of the Communist Party, sex, and number of paid working hours. The dependent or explained variables are as follows: the income preceding redundancy, the income declared by the xiagang worker when he finds new employment, social identification (perception of his own social position), and degree of social instability. Variables such as “social identification” and “degree of social instability” are subjective and are derived from personal opinions. “Class identification” is measured by a scale incorporating six categories in relation to which the interviewee positions himself.22 The degree of “social stability” is a subjective appreciation on the part of the interviewee, it depends on elements such as “attitude with regard to the use of collective petitions,” “evaluation of the degree of social justice,”

Table 7.1

Statistics describing the xiagang interviewed (in %) Aged 40 or younger

Female Education level Primary school and below Secondary school (or equivalent) High school diploma, professional college Technical school University Political affiliation Member of the Communist Party Member of the Communist Youth League Member of the eight so-called democratic parties Not affiliated to a party Nature of work unit before lay-off State-owned enterprise Collective enterprise Other Industrial sector of work unit before lay-off Agriculture, forestry, cattle farming, fishing Mining Manufacturing Gas, electricity, water Construction Geological prospecting, hydraulic works Transport, warehousing, post Wholesale, retail sales and foodstuffs

Aged 40 and older

Xiagang before 1996

Xiagang in 1997 or after

Xiagang before 1996

Xiagang in 1997 or after

54.4

45.3

53.8

55.2

0.5 64.6

0.4 49.0

1.9 61.4

1.6 44.8

28.2

39.7

31.0

41.1

5.7 1.0

10.1 0.8

5.2 0.5

10.9 1.6

6.4

12.5

16.4

32.4

15.9

15.6

2.6

0.7

1.3

—

2.6

1.4

76.4

71.9

78.3

65.5

34.4 61.4 4.2

52.3 43.1 4.6

34.4 62.7 2.9

46.9 50.0 3.1

1.4

0.4

—

1.6

9.3 42.3 1.9 8.8 1.9

15.0 40.0 1.5 6.5 1.5

11.0 40.5 3.8 11.4 1.9

11.6 32.6 3.7 6.8 0.5

3.3

6.5

3.3

4.2

5.6

3.5

3.8

10.5 continued

168 Table 7.1

Li Peilin and Zhang Yi Continued Aged 40 or younger Xiagang before 1996

Finance, insurance Property Social services Health, sport, and social action Culture, education, broadcasting Scientific research and technology Administrations and Party or state organisation Other Profession before lay-off Management Specialised technician Worker Services Other

Xiagang in 1997 or after

Aged 40 and older Xiagang before 1996

Xiagang in 1997 or after

— — 4.2 0.9

— — 3.1 —

— 0.5 5.2 0.5

0.5 — 9.5 1.6

0.9

0.4

0.5

1.1

0.5

0.4

0.5

0.5

—

0.8

—

0.5

19.1

20.4

17.2

14.2

5.3 7.2 58.2 20.2 9.1

5.4 10.1 56.4 19.5 8.6

10.4 9.0 50.7 19.9 9.9

17.4 7.9 37.9 24.2 12.7

“evaluation of relations between managers and the masses,” “perception of the degree of local economic prosperity,” and “perception of the period for resolving the problem of unemployment.”

Research and Results Human Capital in the Determination of Income The income of an employee depends on a multiplicity of factors. At the collective level, it is the result, for example, of differences between enterprises and between business sectors. At the individual level, it is determined by the job, years of service, the amount of overtime worked, and so on. Our research focuses on the impact of human capital on the remuneration level. This comes down to asking the following question in the

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specific case of xiagang workers: What is the impact of the accumulated human capital on income before and after redundancy? Table 7.2 presents the influence exerted by human capital on the income of the interviewees. The independent variables “sex” and “membership or not of the Party” are highly significant both before and after the period of redundancy. Men earn more than women, and members of the Party earn more than non-members; these results have also been demonstrated in other surveys.23 Model 124 shows that the education variable has a significant influence on monthly salary before redundancy. The greater the importance attached to the number of years of education, the more significant the accumulated human capital and the higher the monthly salary before redundancy.25 In this first model, the age variable also exerts a significant influence: the older the individual, the higher the monthly salary before redundancy. In SOEs, age is equivalent to years of service, a determining factor in the importance of the subsidy and the level of social benefits provided by the enterprise.26 If the level of technical skill does not make an important contribution to increasing the income of employees at an intermediate or beginner level, it is, however, not without significance. Workers who possess technical skills benefit from a higher income than employees without any specific training. If the number of years of education received, age, and the level of technical skill are considered as elements that make up human capital, the income of an employee before redundancy is appropriate to his human capital: the higher total human capital is, the higher his remuneration will be. However, in model 2 of table 7.2, when the explained variable becomes the monthly salary after redundancy (the last salary of current employment), the results differ radically. First of all, the education variable ceases to have an influence on income. Furthermore, the age variable has a negative impact on income: the older an individual, the lower his new income. These results are thus different from those of the preceding model. With the aim of detailing in more depth the results of model 2, which seems to confirm the hypothesis that human capital and age have a negative effect on the new income following redundancy, we tested two other models (3 and 4), which focus on the twenty–forty and forty-one–fiftyfive age brackets. Model 3 allows the assertion that for xiagang workers aged between twenty and forty, variables such as education level, or professional skill, or age have lost their explanatory power as far as income following redundancy is concerned. It is exclusively for personnel who worked in management whose professional situation before redundancy continues to play a positive role. Overall, the human capital of xiagang workers loses its explanatory power in terms of income following redundancy.

Table 7.2

Income of xiagang Monthly salary before lay-off Model 1

Hours worked the previous week Gender Member or not of the Communist Party Years of education Education leve1 (1) Secondary school High school diploma and professional college Other professional college (after high school diploma) University Age Previous professional situation (2) Management Technician Worker Employee in the services Level of technical skills (3) Higher Intermediate Beginner

Monthly salary after lay-off or «last salary of current job» Model 2 All age brackets

Model 3 Aged 20–40

Model 4 Aged 41–55

0.383***

0.378***

0.608***

0.167***

0.146***

0.183***

0.086

0.142***

0.155***

0.213***

0.130

0.082*

0.025

0.089*

0.061 0.147*** 0.072*

−0.282 −0.252

0.015 −0.068

0.006

−0.129

0.010

−0.029

0.111* −0.005 0.086 0.006

−0.028 −0.029 −0.081 −0.106

−0.001 −0.002 −0.047

−0.213*** 0.027 −0.031

−0.073*

Notes: The asterisks indicate the degree of significance, with three asterisks corresponding to the maximum degree (***p < 0.001; *p < 0.05). The results were obtained using the Ordinary Least Square (OLS) model. 1. Reference group: primary school and beyond. 2. Reference group: other personnel. This group includes the personnel in administration and the public utility companies affiliated to the enterprise. 3. Reference group: no grade.

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For model 4, the two independent variables represented by sex and membership or nonmembership of the Party, highly significant in model 3, also lose their explanatory power for xiagang workers in the forty-one– fifty-five age bracket, who had to interrupt their studies as a result of the policy of “sending people down to the countryside” during the Cultural Revolution. There is no statistical correlation between income following redundancy and the gender of the individual or membership or nonmembership of the Party. Furthermore, the holding of a diploma of higher technical proficiency has a negative influence on the income level following redundancy, given that xiagang workers in the secondary sector possessing a technical diploma generally have an income in their new job that is lower than that they could obtain in the services sector. This fact reminds us of the words of a former model worker, aged fortynine, from Jilin province, who was interviewed in Changchun in 1999: For a very long time after I was made a xiagang [worker], I could not find any work. The first few days were particularly hard. I slept one week solid. My wife is almost handicapped and has no chance of finding a job. We were employed in a porcelain factory where the production lines are specialized, I had no experience of working in other enterprises, it is very hard to find a new job . . . It was only in the second week that I went into town to look for a job. Looking for a job, in reality, meant waiting for clients on the city’s sidewalks, as the only thing I could do was paint apartments. A friend who was also looking for work in this way told me to come with him and that is what I did. That day, no one offered us work, we waited in vain and we went home in the evening having spent money on food and transport. The next day we went to wait in another area, someone came along and offered us work for a day . . .27

The sociological scope of the non-valorization of human capital in the determination of the income of xiagang employees is important. The social belief in the ability to improve one’s income thanks to the accumulation of human capital and one’s personal efforts constitutes an important condition for social mobility. But in a situation where human capital is not valued, individuals have a tendency to look for societal or political causes, and not individual ones, to explain the difficulties they find themselves in.

The Impact on Social Identification In our survey, only 1.1 percent of xiagang workers perceive themselves as belonging to the higher or lower “upper” classes, 3.5 percent think they are

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part of the “upper middle” class, and 15.7 percent believe they are “lower middle” class. Finally, 35.2 percent consider themselves to be part of the higher fringes of the lowest rungs on the social ladder, while 44.5 percent think they belong to the most disadvantaged social groups. What are the factors that determine the social identification of xiagang workers? The factors that exert a significant influence on the class identification of xiagang workers are in particular “the monthly salary following redundancy” and “the monthly salary of the spouse” (see table 7.3). “Length of studies” has lost its explanatory power. Certainly, holders of higher diplomas more readily consider themselves part of a higher social class than people without training, but the importance of this group is minor among xiagang workers. Models 2 and 3 test the social identification of male xiagang workers. Setting aside the variable relating to the professional situation of their spouse, it is the monthly salary following redundancy that constitutes the independent variable with the greatest explanatory power. In the second case, where two new independent variables are introduced, that is, “years that the spouse has spent in education” and the “monthly salary of the spouse,” the impact of the former is imperceptible while that of the latter is highly significant from a statistical point of view. Models 4 and 5 analyze the social identification of female xiagang workers. Model 4 shows that the independent variables with the strongest explanatory power are the “monthly salary following redundancy” and the “number of years of study.” In model 5, we have introduced two new variables; these are the “education level” and the “monthly salary of the spouse,” which put into context the explanatory importance of the education level variable. The social identification of the wives is sharply determined by the income of their husbands. Models 6 and 7 allow a comparison of the determining factors in the social identification of the twenty–forty age bracket and that of the fortyone–fifty-five age bracket. Xiagang workers aged between forty-one and fifty-five who had to stop their studies as a result of being sent to the countryside during the Cultural Revolution have a weak evaluation of their social position in comparison with the “others” reference group or technicians. This phenomenon is not as pronounced in the twenty–forty age bracket. From these models, we can conclude that among xiagang workers, whether male or female, the primary factors that determine social identification are the monthly salary following redundancy and the monthly income of the spouse. A notable difference is found, however, for women, who identify themselves more through the income that their spouses earn. Human capital, in terms of education level, generally exerts only a minor influence. The loss of explanatory power held by human capital in social identification is,

0.174*** 0.034 0.014 0.008 0.003 0.007 0.072 0.269***

0.019 0.213*** 0.080 0.048 −0.030 0.050 −0.023 −0.031

0.106 0.336***

Model 2 Male

0.116* 0.020 −0.017 0.002 −0.058 0.023 0.040 0.162***

0.092 0.237***

Model 3 Male

0.140* 0.040 0.012 0.067 0.134* −0.047

0.027 0.241***

Model 4 Female

0.097 −0.223** −0.109 −0.216*

−0.010 0.241*** 0.128 0.306*** −0.065 −0.082 −0.042 −0.111**

0.165*** −0.020 0.005 −0.007 0.109

0.048 0.236***

Model 7 41–55

0.177*** 0.070 0.037 −0.005 −0.065

−0.025 0.224***

−0.021 0.201*** 0.216*** 0.035 0.001 0.037 0.059 −0.003 0.110 0.277***

Model 6 20–40

Model 5 Female

Notes: The asterisks indicate the degree of significance, with three asterisks corresponding to the maximum degree (***p < 0.001; **p < 0.01; *p < 0.05). The results were obtained using the Ordinary Least Square (OLS) model. 1 Reference group: no vocational training. 2 Reference group: other personnel. This group includes the personnel in administration and the public utility companies affiliated to the enterprise.

Previous professional situation (2) Management Technician Worker Employee in the services

Monthly salary before lay-off Monthly salary after lay-off Level of technical skills (1) Higher Intermediate Beginner Member or not of the Party Years of education Age Years of education of the spouse Monthly salary of the spouse

Model 1 All cases

Table 7.3 Class identification among the xiagang

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moreover, more marked among individuals whose income is on a downward curve, that is, for xiagang workers in the forty-one–fifty-five age bracket.

Impact on Social Behavior In general terms, it is observed that the higher the age and the education level of an individual, the more he will have a tendency to exercise a rational pattern of social behavior and to avoid violence. However, for xiagang workers, these factors are played out differently as a result of the downward income curve. We define “social behavior” as an independent variable expressed through a combination of sub-variables (recourse—or not—to collective petition; and opinions about local economic prosperity, or about social justice matters, mainly focused on the resolution of xiagang-related issues, but also involving relations between cadres and the population). We call this combination of variables the “coefficient of social instability.” In model 1 of table 7.4, sex and Party membership do not have a significant impact on the social instability coefficient. On the other hand, variables such as age, social identification, the monthly salary following redundancy, years of study, and weekly hours of work exert a major influence. In contrast to the common understanding, the older a xiagang worker is and the longer his vocational training, the higher is his social instability coefficient, that is, the stronger his discontent toward society is and the more he is inclined to exhibit violent patterns of behavior. Social identification is the most powerful explanatory factor. This result reinforces the

Table 7.4

Social instability coefficient

Gender Member or not of the Party Age Social identification Monthly salary after lay-off Years of study Weekly working hours

Model 1 All cases

Model 2 20–40

Model 3 41–55

0.026 −0.053 0.142*** −0.335*** −0.147** 0.122** 0.151**

−0.022 −0.056 0.137* −0.298*** −0.079 0.118* 0.085

0.113 −0.029 −0.076 −0.412*** −0.173* 0.120* 0.204**

Note: The asterisks indicate the degree of significance, with three asterisks corresponding to the maximum degree (***p < 0.001; **p < 0.01; *p < 0.05).

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relationship that we have established between non-valorization of human capital and social identification. Models 2 and 3 of table 7.4 underline differences in the social instability coefficient between the generations. For the forty-one–fifty-five age bracket who are experiencing a particularly significant lack of valorization of human capital, the social identification variable also has the greatest impact on the social instability coefficient. The number of years spent studying only serves to aggravate this coefficient. For a given income level, the longer the vocational training an individual has received and the older he is, the more sensitive he will be to inequality in income. And he will pay even more attention to this when his own path is on a downward slope; hence the greater probability that he will exhibit violent behavioral patterns and participate in collective actions. It is thus the relatively older xiagang workers who were sent to the countryside during the Cultural Revolution who are most in need of aid.

Vocational Training in Order to Change Work or Trade? The problem of the reintegration of xiagang workers is a consequence of the complete transformation of the structures of production, marked by a contraction of traditional industries and by a surging expansion of new ones. These developments bring with them a change in the evaluation of professional skills and experience on the labor market, which translates, for certain people, into a loss or lack of valorization of the human capital that they hold. For this reason, it is important that a xiagang worker can pursue vocational training courses so that he is able to change work or trade and thus link up again with the chain in which human capital is accumulated. Xiagang workers must be enabled to transform and renew their know-how and their technical skills so that they can better respond to market demand. Such a policy thus constitutes an effective solution that can help them overcome their difficulties. In this respect, our survey shows that xiagang workers who have undergone training with a view to furthering their professional rehabilitation have a greater chance of finding a new job with a decent income. The statistical results of our survey also demonstrate that workers who have pursued this kind of training have already experienced a certain improvement in their living conditions. Table 7.5 reports on two questions that clarify the differences between xiagang workers who have been pursuing a training course and those who have not. To the question “How has

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Table 7.5 Usefulness of vocational training courses aiming at the reintegration of the xiagang

Evolution of your Standard of living over the past five years Has improved Has slightly improved Virtually identical Has declined slightly Has declined Don’t know Comparison of your current income with that before lay-off Higher Virtually identical Lower

Having taken part in training courses (%)

Not having taken part in training courses (%)

4.1 13.8 20.0 26.9 34.5 0.7

1.6 7.8 22.5 27.7 37.5 2.8

5.4 30.8 63.8

5.6 20.0 74.4

your standard of living developed over the last five years?,” the responses indicating an improvement are relatively high and those indicating a deterioration are relatively low for those who have undergone training. Vocational training is thus a relatively positive factor in the life of a xiagang worker and his family. To the question “What differences are there between your current income compared with your income before you lost your job?,” the responses do not reveal any major difference between those workers who have followed vocational training courses and those who have not among those whose current income is higher than the one they received before the period of unemployment. In contrast, among those whose income is identical or lower, the differences are noteworthy. The income following redundancy is thus slightly higher among those who have followed vocational training courses. Vocational training courses are offered and demonstrated as examples of a means available to xiagang workers to promote and reinforce work skills, but they are not compulsory; it is up to xiagang workers themselves whether they choose to participate or not. Courses that aim to improve work skills are, however, perceived by local governments and xiagang workers themselves as less important than “social welfare” (shenghuo butie). Nevertheless, the results of our survey reveal that vocational training

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represents a more effective aid than the simple granting of social welfare. These social security benefits resolve immediate problems and help the recipients out of poverty, but the chances of recipients falling below the poverty line again are very high. The non-valorization of human capital equates with the social behavior and social identification of xiagang workers. Individuals whose human capital is no longer recognized or valued are inclined to believe that neither their income nor their social position are determined by their level of competence and the efforts they have made, but are, in contrast, determined by social factors. Thus, those who have relatively elevated human capital have a tendency to develop stronger discontent toward society (shehui bu man). In other words, these are not the poorest people, but they come from the disadvantaged groups whose non-valorization of human capital is the most marked. If the linkages in the accumulation of human capital were restored, this could again be exploited. In the opposite case, this accumulated capital represents, in contrast, a burden that can cripple the future of the individuals in question. Our survey suggests that a section of xiagang workers is in the process of radically changing their behavior with regard to society. They no longer look for support to the policies put in place for their benefit, but believe that they will succeed in changing their lives through their own efforts and personal choices. It is precisely these people whose professional prospects are developing positively. This also means that, thanks to countless individual actions, the mechanics of mobility and social climbing are in the process of a transformation that will allow the creation of new social structures in production and labor. The living standards and income level of xiagang workers is comparable with that of rural migrants in the cities, but, unlike xiagang workers, the latter benefit from tendential growth in their income marked through the positive effect of human capital. It follows from this that their perception of the future is positive. In contrast, xiagang workers, as a result of the downward trend in their income and the weakness of their human capital, experience their difficulties particularly sharply. However, the changes taking place may help them move from a vision of history determined by social factors to one that leaves more space for individual choice. Many xiagang workers belonging to the generation that was dispatched to the countryside have succeeded in transforming this traumatic experience into a positive value added to their human capital and have become important players in different professions or sectors. We would like to believe that many xiagang workers will be able to find a solution to their current problems. Because the organization of labor was implemented for a long time by the state, xiagang workers today often feel completely powerless in the face of the new modus operandi of the economy. Faced with possibilities of

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social mobility or new job opportunities, xiagang workers often only perceive their lack of competitiveness. The aid granted to xiagang workers within a judicial and regulatory framework in the form of compensation and subsidies is, of course, very important, for it allows the difficulties that they have to face every day to be alleviated. The vocational training courses that are organized for them should include the aim of helping them to improve their ability to choose and to link up again the chains in which human capital is accumulated. Unfortunately, in many of the training centers, this objective is only formal, and the assistance given in the search for reemployment takes the form of the old “central planning” (danwei anpai). We should realize, however, that, in a context of far reaching mutations in the relations between the state, the market, and society, the individual has greater choice and possibilities for adapting. Targeted vocational training courses allowing xiagang workers to enhance their human capital and to reinforce their abilities to choose, in order to permit them thus to adapt more suitably to the conditions in the labor market, represent the most effective means of assisting them. Indeed, the usefulness of these training courses and of professional reintegration has been proven on a very large scale in the framework of other experiences abroad, as has the importance of enhancing human capital in order to rapidly reduce poverty and to prevent a relapse. To achieve this goal it is necessary on the one hand to increase the proportion allotted to training expenses in overall aid budgets intended for xiagang workers, and on the other hand to improve training effectiveness by, for example, making public tenders and also encouraging the participation of intermediaries in civil society. The rate of professional reintegration should from now on be one of the criteria for evaluating the return on the investments in training. This kind of training policy as a priority means of aiding xiagang workers should also be based on accompanying measures that could include benefits granted to people setting up a business, such as tax relief, facilities for accessing small loans, simplification of administrative procedures, and so on. A few years ago we adopted several incentive policies to encourage the enrichment of a part of the population; today, it is even more legitimate to adopt policies to help people in difficulty.

Notes Translated from the French original by Nick Oates. 1. Every country has its own definition of “unemployment.” The one given by the International Labor Office in 1982 serves as a reference: An unemployed person

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3. 4.

5.

6.

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is a person of working age (fifteen years old or more) who fulfils three conditions at the same time: (1) being without employment, that is, not having worked, not even for one hour, during one reference week; (2) being available to take up a job within fifteen days; and (3) actively seeking work or having found work that will start at a later date. The reference period used here is one month. As far as the term xiagang is concerned, it means, first of all, the loss of the former work station but the maintenance of a contractual relationship with an SOE or collective enterprise; second, these are people who regularly receive benefits (shenghuofei) paid by the reemployment center of the SOE in question. In reality, there is another category of people who, while having left the SOE, retain a contractual relationship with it and who are not registered at a reemployment center. These people, very numerous, are defined as ligang zhigong (literally, employees who have left their work station). This flexibility in the forms adopted by the enterprises to reduce excess manpower led to the definition of two statistical categories during the census of the workforce: on the one hand there are “employees with a work station” (zaigong zhigong) and, on the other, “employees without a work station” (bu zaigong zhigong). Department of Population, Social Science, and Technology Statistics of the National Bureau of Statistics, “Xiagang ji xiagang tongji yanjiu” (Xiagang and Statistical Study of Xiagang), Tongji yanjiu (Statistical Study), no. 3 (1999). Li Chunling, “Wenhua shuiping ruhe yingxiang renmen de jingji shouru. Dui muqian jiaoyu de jingji shouyi shuai de kaocha” (Influence of Education Level on the Income of Individuals. Survey on the Economic Return on Current Education), Shehuixue yanjiu (Sociological Analysis), no. 3 (2003). Li Peilin, “Lao gongye jidi de shiye zhili: Hou gongyehua he shichanghua—Dongbei diqu jiu jia daxing guoyou qiye de diaocha” (The Management of Unemployment in Former Industrial Bases: Post-industrialization and Merchandising. Survey Conducted at Nine State-owned Enterprises in the Northeast), Shehuixue yanjiu (Sociological Analysis), no. 4 (1998). Zhang Yi, “Shou jiaoyu shuiping dui laonian tuixiu renyuan zaijiuye de yingxiang” (The Influence of Education Level on the Re-employment of Retirees), Zhongquo renkou kexue (Chinese Population Science), no. 4 (1999). Glen H. Elder, Children of the Great Depression (Chicago: University of Chicago Press, 1974). Zhou Xueguang and Hou Liren, “Children of the Cultural Revolution: The State and the Life Courses in the People’s Republic of China,” American Sociological Review, 64(1), February 1999, pp. 12–36. Theodore W. Schultz, Investment in Human Capital (New York: Free Press, 1971); G.S. Becker, Human Capital (Chicago: University of Chicago Press, 1994). Peter Blau and Otis Dudley Duncan, The American Occupational Structure (New York: Wiley, 1967); Donald J. Treiman and Kam-Bor Yip, “Educational and Occupational Attainment in 21 Countries,” in Melvin Kohn (ed.), Cross-National Research in Sociology (Newbury Park: Sage, 1989); Robert Erikson and John H. Coldthorpe, The Constant Flux: A Study of Class Mobility in Industrial Societies (Oxford: Clarendon Press, 1993); Rod Bond and Peter

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7.

8.

9.

10.

11. 12. 13. 14. 15. 16.

17. 18. 19.

20. 21.

22.

Li Peilin and Zhang Yi Saunters, “Routes of Success: Influences on the Occupational Attainment of Young British Males,” The British Journal of Sociology, 50: 2 (1999), pp. 217–249. Bian Yanjie and Zhang Kaixin, “Shichanghua yu shouru fenpei dui 1988 he 1995 nian chengshi zhuhu shouru diaocha de fenxi” (The Move to the Market Economy and the Distribution of Income [in China]: An Analysis of Urban Income between 1988 and 1995), Zhongguo shehuikexue (Social Sciences in China), no. 5 (2002), pp. 97–111. Zhang Yinghua, Xue Chengtai, and Huang Yizhi, “Jiaoyu fenliu yu shehui jingji diwei” (Education and Socio-professional Status), Taiwan, Jiaogai yuekan (Education Magazine), AB09 (1996). Valery Yakubovish and Irina Kozina, “The Changing Significance of Ties: An Exploration of Hiring Channels in the Russian Transitional Labor Market,” International Sociology, 15 (3), September 2000, pp. 475–500. Zhao Yandong, Xiagang zhigong de shehui ziben yu zaijiuye (The Social Capital of Xiagang Workers and Re-employment), doctoral thesis, Chinese Academy of Social Sciences (2001), p. 63. Leonard Beeghley, The Structure of Social Stratification in the United States (Boston: Allyn and Bacon, 1996). Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge, Mass: Harvard University Press, 1980). Blau and Duncan, The American Occupational Structure. Zhang Yinghua, Xue Chengtai, and Huang Yizhi, “Jiaoyu fenliu yu shehui jingji diwei,” pp. 97–99. Huang Yizhi, Shehui jieceng, shehui wangluo yu zhuguan yishi (Social Classes, Networks, and Subjective Consciousness) (Taiwan: Juliu, 2002), pp. 38–39. Li Peilin, Zhang Yi, and Zhao Yandong, Jiuye yu zhidu bianqian: liangge teshu qunti de qiushi guocheng (Employment and Reform: The Job Search Process of Two Social Groups) (Hangzhou: Zhejiang People’s Press, 2000), pp. 162–163. Bo Yibo, Ruogan zhongda juece yu shijian de huigu (Revision of Certain Major Policies and Events), Part One (Party School Press, 1991), pp. 94–95. Wang Dahai, Tiaozhan shiye de Zhongguo (Challenging the China of Unemployment) (Beijing: Jingji Ribao chubanshe, 1999), p. 69. Kang Xiaoguang, “Weilai san-si nian Zhongguo dalu zhengzhi jidingxing fenxi” (Analysis of Political Stability in China in the Next Three to Five years), Zhanlue yu guanli (Strategy and Management), no. 3 (2002). Seymour M. Lipset, Political Man: The Social Bases of Politics, tr. Zhang Shaozong (Shanghai: Shanghai People’s Press, 1997), p. 89. Because of the great mobility of xiagang workers, surveys conducted in the past were often based on a deliberate sampling choice. This research represents one of the first studies that observes the standards of sampling methodology, the statistical results of which are reliable. Although these data are regional, our insistence on reciprocal actions between the different variables can in principle be generalized. The possible choices are: upper, lower upper, upper middle, lower middle, upper lower, and lower. This classification was perfected by Richard Centers,

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25.

26. 27.

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The Psychology of Socia1 C1asses: A Study of Class Consciousness (Princeton: Princeton University Press, 1949), p. 233. Bian Yanjie and Zhang Kaixin, op. cit. The results were obtained by the Ordinary Least Square (OLS) model, which allows the impact of an explanatory variable to be isolated by controlling the other dimensions. The survey conducted by Xie Yu and Han Yimei on the differences in urban incomes during the period 1988–1995 shows that, despite the existence of a positive relation between education and income by virtue of a standardized distribution of benefits and subsidies, economic growth downplays education in terms of its rewards. Xie Yu and Han Yimei, “Gaige shiqi Zhongguo chengshi jumin shouru bu pingdeng yu diqu chaju” (Salary Inequality of the Urban Population and Regional Differences in the Reform Period in China), in Zhai Bianyan (ed.), Shichang zhuanxing yu shehui fenceng (Transformation of the Economy and Social Classification) (Sanlian, 2002), pp. 460–508. The research of Lai Desheng has shown that, from 1989 to 1995, the effectiveness ratio of education rose from 3.8 percent to 5.7 percent, and that the effectiveness of education is greater than that of years of service. Lai Desheng, “Jaoyu, laodongli shichang yu shouru fenpei” (Education, the Labor Market and Income Distribution), in Zhao Renwei, Li Shi, and Li Siqin (eds.), Zhongguo jumin shouru fenpei zaiyanjiu (Further Studies on Income Distribution among Chinese Residents) (Beijing: China Financial & Economic Publishing House, 1999), pp. 451–474. Zhang Yi, Guoyou qiye de jiazuhua (Paternalization of State-owned Enterprises) (Archive Editions of the Human Sciences, 2002), pp. 190–200. Li Peilin, Zhang Yi, and Zhao Yandong, Jiuye yu zhidu bianqian, pp. 323– 324.

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Part 4 Explaining the Lack of Contention

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Chapter 8 Farewell to Socialist Labor in China Jaeyoun Won

A society based on mass unemployment is coming into being before our eyes. It consists of a proletariat of temporary workers carrying out the least skilled and most unpleasant types of work. —Andre Gorz, Farewell to the Working Class

A Tale of Two Unemployed Workers: Mr. Han and Ms. Wu In his small, dark, dilapidated apartment that he received from his parents, Mr. Han looked weary and dejected. He smoked continuously during our interview.1 Mr. Han is a forty-seven-year-old worker from Changchun, Northeast China. After working at a local tractor factory for more than twenty years, he was laid off three years before our meeting; after losing his job he simply remained at home all the time (bu chumen). In spite of a government regulation preventing layoffs of both the husband and wife in a single family, his wife was also laid off. When he first lost his job, Mr. Han began selling fruit in his neighborhood to make a living. He did not like the work, however, because he had to start up conversations, argue, and haggle with strangers. It was not ideal for him, or even a suitable job (heshide gongzuo). Then, one day, he was struck by a car, paralyzing his legs, and he was not able to work afterward. Mr. Han could not ask the government or his former work-unit for help (bu neng zhao zhengfu, ye bu neng zhao danwei) because his injury took place outside the factory, as a nonworker. When he

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was laid off, Mr. Han lost his privileged position as a worker in a state enterprise, called the “Chinese labor aristocracy” by some. Now, he must rely on people outside the work-unit—in this case, on his family—to survive. His wife sells fruit at the market, but business is generally slow and unpredictable. Unlike the stable jobs at state enterprises, street market peddlers live a precarious life at the whims of the market economy. When fruits are out of season, Mrs. Han must find something else to sell. Furthermore, if the weather does not cooperate, if it rains or snows, she might not be able to sell anything at all. Everyday, competition is becoming more severe, as additional workers are laid off from nearby factories, joining the sellers in the street marketplace. The day I attempted to find Mrs. Han, she was not at her usual spot in the marketplace. Her neighbors told me that she had traveled further to avoid competing with other peddlers, in the hope of selling more fruit. On average, Mrs. Han makes less than one U.S. dollar (five Chinese kuai) a day, and she and her husband must try to survive on that meager income. Mr. Han tried not to sound too pessimistic: Well, it does not really matter whether I feel unemployment is fair or not. I feel that I am still in a better position than the poor peasants in the western provinces. We have to make a living no matter what, and somebody [my wife] has to work (gan huo) to take care of me. There are so many less fortunate, poor people in China, so we just have to find a way to survive.

For a couple of years, he was pessimistic and distraught (beiguan), but eventually he accepted the fact that, to survive in post-socialist China, he would have to live without substantive help from the state or his old workunit. His family has become his last resort. Ms. Wu, a forty-two-year-old female worker from Changchun, in contrast to Mr. Han and most of other unemployed workers I interviewed, looked obviously confident and positive. She had been laid off from the same factory as Mr. Han, but, through a family connection, she was able to secure a new job at a hospital within a month. She was rather indifferent to the seriousness of unemployment. She liked her new job, running errands for doctors and taking care of sundry administrative tasks, and she said her new job was preferable to her previous one because it gives her face (you mianzi). Unlike peddling on the street, this is the type of position she can explain to her relatives, friends, neighbors, and old classmates, without any shame. To her, losing her old job has actually provided her a new opportunity to explore other jobs. She makes almost seventy U.S. dollars per month (more than five hundred Chinese RMB), about three times more than the Han family. In addition, her husband is still working at the

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factory, so Ms. Wu is one of the luckier workers who secured a decent job in the market economy. Ms. Wu acknowledged the hardship that unemployed workers endure, but sees unemployment as a new opportunity, as she stated; I believe in myself. I have confidence, and capabilities to overcome any hardship. I do not want to depend on the state, and I do not need to. Yes, life is tough and hard, but there always is a way out. You have to be optimistic about your life. As a matter of fact, more pressure means more opportunities for us. I cannot say that unemployment is beneficial to us, but it can be positive. It was nice to work at the factory, but surely money was not good. People say you can be successful only with some connection or back door entry. This is not true at all. Unemployment gave us opportunities to make good money. It just depends on how each individual makes use of the opportunities. If I can do it, everybody can do it. There is nothing to be afraid of. It’s very simple. We live in a new world, a new environment. Competition is very fierce and survival is not easy. Thus, we have to be ready in our thought and our mind. If I work hard, there are opportunities and rewards. With unemployment, I found out that I can overcome hardship and obstacles.

As these stories reveal, Chinese socialist workers must now face the uncertain reality of the market economy after being laid off. Unemployment can be a double-edged sword: for a small number of workers, it can be a blessing, but for most workers, it is a curse. Once celebrated as the heroes of socialism, workers are now marginalized, many are becoming redundant, and too often they are laid off without adequate support from the state. This chapter examines transformations in state policies resulting in the laying off of urban Chinese workers, and the new ethics of welfare underlying these policies. In particular, I focus on shifts in ways of thinking, and on the changing ethics of welfare and unemployment in China. The problem of unemployment is a wrenching one in China’s transformation, and the relationship between labor and the state is reconstituted in this massive unemployment. This chapter is based upon thirteen months of ethnographic fieldwork in Changchun, Shenyang, and Beijing from fall 2000 to spring 2001, summer 2002, 2004, 2005, and 2006, including ninety-five in-depth interviews with unemployed workers, state officials, and managers as well as extensive examination of archival documents. Additional trips to China during summers 2002, 2004, 2005, 2006 were conducted to gain up-to-date knowledge and information about unemployment. Interviews (caifang) with workers, state officials, and managers were essential for grasping undocumented aspects of change, and were supplemented

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by both primary sources as well as previous studies in Chinese. In addition, I also consulted many internal (neibu) government documents. My interviews provided critical first-hand primary information about people’s actual, real-life experiences dealing with the problem of unemployment in the form of vivid, detailed ethnographic accounts of how unemployed workers and state officials talk and act about layoffs and reemployment.

Literature Review Prior to reform in China, these unemployed workers were politically active, socialist workers under the protection of paternalist state workfare: they did not have to face the forces and the tyranny of capital. Now, however, they have become mere employees,2 they were thrown out of the factory, and thus forced to sell their labor power in a temporary, part-time, or casual jobs. They have lost their privileged status as state workers, and they face the cruelty of the market alone, without the protection of the state. The Chinese working class has become devastated and degraded to a marginalized underclass after being unemployed or self-employed, working on a probationary, temporary, and part-time basis. Recent studies of labor politics in China3 report mixed findings about the post-socialist working class politics in China. For example, Ching Kwan Lee4 reveals that, contrary to Marxist conventional wisdom, unemployed workers have become the most vocal protesters against the state and the reform process. According to Lee, Chinese workers have become most radicalized when they are no longer workers, when they have been kicked out of the factories, and after experiencing life as an underclass outside the “safe haven” of the socialist work-unit. However, Blecher5 emphasizes workers’ passivity, arguing that workers’ hegemonic acceptance of values of the market and the state have led to a failure to challenge state domination. Blecher states that China’s workers are clearly subordinated to the state . . . The vast majority of Chinese workers, including the unemployed, remained politically passive . . . Workers have become subject to hegemony of the market and of the state . . . China’s workers have come to accept the core value of the market and of the state as legitimate. (287)

However, his own interview data suggest that we can draw a different conclusion from the one that he makes. For example, he observes that

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“workers blamed their managers . . . some blame local government officials . . .” Such observations are not clear instances of subordination to the state, and rather than prematurely assuming “the unmaking” of the Chinese workers, we should instead consider the “making” of something other than traditional socialist workers in post-socialist transformation. As I understand it, labor politics are relational and interactive between the state and workers. It is essential to discuss what the state does, and how the state does it, with particular regard to the question of governance, because a proper examination of the making or “unmaking” of workers must consider the commonly overlooked, disciplinary nature of the state policy.

Meaning, Statistics, and Location of Unemployment After the initiation of the reform, the Chinese state has taken steps to gradually introduce the market into their welfare and employment system. To facilitate the reform process, the party-state actively reformulated labor regulations in 1986, which officially introduced the labor contract system. It was titled “Regulations on Administration of Labor Contracts by State Enterprises.” This means that workers can be laid off or fired should the enterprise declare bankruptcy, and that new workers are recruited on a contract system rather than as permanent employees. It was called “a double track system,” in which new workers got labor contracts while old workers retained lifetime employment in order to promote more marketized labor relations. However, from the early 1990s, new types of unemployed workers emerged in China due to the implementation of the new bankruptcy law. In particular, the fifteenth Congress of the Chinese Communist Party in September 1997 provided an ideological justification for reforming the state enterprises. Now even the old workers under lifetime employment have been laid off in the name of buying off tenure (ma duan), a long vacation (fang changqijia), and early retirement (neitui), and workers under new contracts were also predisposed for cancellation and nonrenewal of their contracts. This is when the official term for “layoff” (xiagang) emerged in the Chinese context. The term of “xiagang” entails that China is still in transition between socialism and capitalism, between planned economy and market economy. Thus, the term for unemployment or waiting for first job under planned economy, daiye, is not appropriate, neither is the term for unemployment under market economy, shiye. Some state

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officials recognize xiagang as temporary phenomena, only including surplus or redundant workers at the state enterprises. Officially, the unemployment rate in China from 1997 to 2000 did not change: 3.1 percent, and estimated numbers of the xiagang (laid-off)6 workers now range as high as thirty millions or even more. According to the Green Paper on Population and Labor (Zhongguo renkou yu laodong wenti baogao), published by the Chinese Academy of Social Sciences in 2002, the officially registered unemployment rate is only 3.1 percent with six million unemployed, but if laid-off workers are included, it increases to 7.8 percent. In addition, the Development Research Center of the State Council (Guowuyuan fazhan zhongxin) assesses that the urban unemployment rate is over 10 percent.7 These numbers all exclude migrant workers, who do not have official urban residential permits (hukou) in the cities. If they were included, it is estimated by officials in the Ministry of Labor and Social Security that the unemployment rate would skyrocket to 28 percent. The problem of unemployment is most serious in the old rustbelt of Northeast China (Dongbei), where I conducted most of my fieldwork and interviews. The extant research8 reports that Northeast China, as the old rustbelt, has become the center of massive layoffs. In 2000, the three provinces in Northeastern China ranked first, second, and third in terms of numbers of unemployed workers. Liaoning had 600,000 unemployed workers, Heilongjiang had 528,000, while Jilin had 340,000. Although Northeastern China represents only 8 percent of the whole population in China, it has a quarter of the country’s unemployed workers. In addition, they are the top three provinces for the delay, and nonpayment of salaries and pensions. Nowadays, it is quite natural to say the “Northeastern unemployment problem” (Dongbei de xiagang wenti), as if the problem of unemployment is exclusively that of Northeast China. Recently, Northeast China has become the center for workers’ protest and political crackdown. In spring 2002, three cities in Northeast China (Liaoyang, Daqing, and Fushun) witnessed massive protests against corruption and the nonpayment of wages and pensions, and for the establishment of independent workers’ associations. In Liaoyang, the Chinese state arrested and detained four labor activists from the Ferroalloy Company. In Daqing, it was unemployed workers from the Daqing Oil Company, and in Fushun, it was unemployed miners from coal-mining enterprises. The problem of corruption is also critical in the Northeast; local leaders such as Peng Xiangdong and Mu Suixin were arrested for abuse of their power, mismanagement of public funds, bribery, and corruption. The Chinese media and political leaders emphasize the need to eliminate the leftist bias in the region, and Liaoning’s governor Yue Qifen once said, “The liberation of thought and the change in ideology are still the

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most important tasks for Liaoning.”9 This kind of revenge of history, the legacy or the burden of the past, is also easily recognizable in the rising unemployment in Northeast China. Northeast China was a bastion of the socialist planned economy and of Soviet-style nationalized heavy industry prior to the reform. After the socialist revolution, the Chinese state initiated 156 industrial projects; 59 of these were located in Northeast China. Northeast China was the center of the first economic plan. During this period, Northeast China enjoyed a remarkable economic growth based on the performance of the state enterprises, but it began to suffer from low productivity in the 1970s. In the reform process since 1978, the southern coastal areas, such as Shanghai and Guangdong, have outpaced Northeast China, which is still characterized as the heartland of socialism (or of inflexibility). Socialist legacy of heavy industry still prevails, and the socialist legacy and egalitarian ideas from the Maoist period persist here. This area was a center of the anti-rightist struggle during the Cultural Revolution. This is what the Chinese call the “Northeastern situation” (dongbei xianxiang), reflecting the unique characteristics of social development here. Northeast China has a very old economic structure and an outdated infrastructure. Many state enterprises in this area are directly controlled by the central ministries and were built before the socialist revolution in 1949, and thus often have a history of more than thirty years prior to that date. For example, Benxi blast furnace was founded in 1915, and Anshan Steel Mill in 1917. In addition, Northeast China’s economic base lies in the resource sector (oil, coal, mining, and forestry), not in the knowledge-based high-tech sector (technology, information, and finance). Northeast China has a quarter of the steel industry, half of the oil production, and a strong statemilitary sector presence. Northeast China is a center of heavy industry and of the old Soviet-oriented socialist economic experiments. Now the legacies of these past experiences have become obstacles for restructuring the economy, and reforming state enterprises. The service economy is underdeveloped, and Northeast China’s supply of jobs in the private sector (particularly the service sector) is not growing sufficiently to absorb the newly unemployed. It is one of the symbols of the long-gone past, a sluggish, old-fashioned place. An ex-official from the Civil Affairs Department pointed out that10 this region is notorious for a particular stereotype: close-minded and lazy people, with a relentless consumption of alcohol and drugs, steeped in old thought and bureaucratic corruption. From the center’s perspective, Northeast China is perceived as lacking in market-oriented progress and competition, and hindered by ideological restriction (jiusixiang, laoguannian). It has thus become a symbol of the bygone socialist period.

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Unemployed Workers: Beneath the Chinese Economic Miracle In March 1998, Chinese premier Zhu Rongji visited my field site, Changchun, the capital city of Jilin province, to examine the problem of unemployment. As part of the rustbelt of the former socialist heavy industrial sector, Changchun also suffered from a serious problem of unemployment. In this area, many workers have been driven out of their workplaces and have become victims of the new market-oriented slogan of Socialism with Chinese Characteristics. In a meeting with local party members, Zhu promised to resolve the problems of unemployment by reforming the old state-owned enterprises through the establishment of a reemployment project, providing jobs to ten million unemployed workers within three years. In May 2001, three years after Zhu’s visit to Changchun, when I arrived in Changchun for my fieldwork, Changchun was still full of unemployed workers in the street without much hope for their future. For instance, my friend Mr. Zhang was quite depressed in those days.11 Though smiling once in a while, his face clearly showed the worries and frustration he had suffered after his wife had been laid off. As a matter of fact, most of the income earners in his family, his wife, brother, and sister, had all been laid off, and he was the only one earning a stable income for the whole family. The tractor factory in his neighborhood laid off more than five thousand of its nine thousand workers, including his wife. His apartment is situated twenty minutes away by bus from downtown Changchun, and his neighborhood is typical of the old state-owned enterprises in Northeast China: an old factory, workers’ apartments, and some peddlers in the street-market—not many opportunities or places to get a new job. Most of his neighbors had been laid off too. The tractor factory had downsized more than half of its workers since 1998, the year that Premier Zhu had promised to resolve the problem of unemployment, and there seemed to be little hope of getting a stable new job in the near future. His wife was pregnant in 1998, and thus a very easy target to be laid off. After being laid off, his wife has received a monthly stipend of one hundred yuan (about twelve U.S. dollars) and has been looking for a job, but with no success. But she is not the only one: five thousand other unemployed workers are looking for jobs in his neighborhood. Any chances of getting a new job? Not really. However, their life has to go on with a new addition to their family—a baby, but still no job. The recent booming Chinese economy has not brought a better livelihood for his

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family or his neighbors; instead now they have to worry about how to get by every day. Mr. Zhang complained: There really is no way out (meiyou banfa). Only to economize our expenses. We have to eat less, spend less. It’s such a chaotic society now, and I do not see much hope in Changchun. We have so many corrupt officials here. Now everything is on my shoulders, and I have to take care of everybody. But can I do it? Sometimes, I just don’t know what to do. My income is not enough, but nobody has a job. Is it my wife’s fault? No. But, why do I have to be responsible? I was not as pessimistic about our life before, but lately, I just do not see any future for me, my child or China.

Unemployed workers desperately need any kind of help they can find, but it is not easy to receive any assistance because often most of their friends and relatives are also laid off. They all struggle daily to survive, and it is hard to find anyone who can provide substantive help in their neighborhoods: You know, every unemployed worker is busy with getting by each day. Most of our neighbors and friends are also laid off, and they are good friends of ours . . . but since we are so busy everyday, we rarely see each other. It is so hard to find somebody with substantial money or anything to help us. Anyhow, please let me know if you learn about any information in the future.

For most laid-off workers, it is the first time in their lives that they have been forced to face the labor market; they have never previously experienced the uncertain reality of the market. These unemployed workers are the very products of the government labor policy of the past, when they were accustomed to the practice of organizational dependence12 on the state or the work-unit. Rarely are they able to recapture their original status as workers enjoying job security and abundant fringe benefits. The Marxist– Leninist ideas of work and welfare have become an ideology relegated to the radiant past. Xiagang, the policy that has detached workers from their work-units, means that these ex-workers face the unstable, marketized world outside the factory. The problem of unemployment is most serious in this region, where unemployed workers have suffered extensively from seemingly unlimited unemployment time periods without many market opportunities. For example, the Anshan steel factory laid off three-fourths of its two hundred thousand workers.13 These workers were unable to afford heat in the severe winter. Some have to sell their blood to get by, and some of the women even had to resort to prostitution. Official statistics reveal that 80 percent of

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newly unemployed workers are from the manufacturing sector, but 90 percent of their new employment is found in the service economy (fuwu hangye)—peddling small goods in the market place, performing janitorial work, or working in massage parlors, beauty shops, restaurants, or hotels.14 Workers are now left outside their work-unit and become merchants, peasants, taxi drivers, or various types of service workers (repairing bikes, hotel workers, hairdressers, cooks, etc.). State enterprises have ceased to exist as caring welfare institutions (danwei) and have instead been transformed into profit-making enterprises (qiye). Most of the unemployed workers indirectly hear about institutional help from the state, notably free training and job allocation programs, but rarely do they find opportunities to claim these benefits after being laid off. This information is not really verifiable to unemployed workers. The rapid marketization and the demise of work-unit welfare have produced epochal change—millions of workers without jobs in a workers’ state. Most of the unemployed workers I interviewed expressed some sort of disappointment, worries, and even anger toward the state and political leaders. A lot of workers have felt betrayed by the state and its promise of socialism for workers. As one of my interviewees Mr. Min said, Is China socialist? Well, it is just a name whatever you call it. The state calls it “Socialist Market Economy” or “Socialism with Chinese Characteristics.” However, these are just other names for capitalism. I bet your country treats unemployed workers much better than us. It is surely not socialism if workers suffer this much whereas the state officials are making money through corrupt activities.15

Old Wine in New Bottles, or New Wine in Old Bottles: Persistence of Propaganda and Celebration of New Labor Heroes The Chinese socialist party-state has been propagating the ideas of selfreliance and individual responsibility in the market economy and celebrating the self-reliant, individualistic new Homo economicus. For the party-state, good, patriotic workers are those with a spirit of challenge (chiku), who are not afraid of hardship (bupa shoulei), and who exhibit selfreliance (kaoziji), thereby reducing the burden on the state. They argue that “waiting for a rice bowl” (deng fanwan) is not working, and it is time to “look for the rice bowl” (zhao fanwan) by oneself. For workers, the recent process of marketization means dismantling the paradigm of the permanent worker—including deprivation of their past entitlement to permanent

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employment and various welfare benefits. This new policy of unemployment makes them second- or third-class citizens (sandeng gongmin) compared to the policies of the past. The state continues, as it has in the past, to emphasize the significance of political education and propaganda, as often announced in the official media: “The Party’s ideological work plays the role of an ideological guarantee and opinion support in the great cause of building socialism with Chinese characteristics.” The “correct” way of thinking is institutionalized and monopolized by the state and through the official media propaganda in China. As the Western media have reported, the Chinese state does not “permit the workers to weep, refuses the workers’ demands, and even tramples upon the workers’ right to organize their own trade unions.”16 However, unlike previously, this emphasis now operates outside the work-units, with the new idea of individualism. Each worker should be responsible for his or her own destiny. By emphasizing the importance of self-reliance and celebrating successful stories of “stars of reemployment” (zaijiuye mingxing), the Chinese socialist party-state is trying to create the image of a future utopia, where unemployed workers can transform themselves into smallbusiness entrepreneurs, the petty-bourgeois. The state’s campaign to promote self-reliance sounds good, but it is another example of political propaganda that has been practiced in the past.17 Prior to the reform, the image of good workers did not really encompass those with risk-taking behavior or a spirit of capitalism, but rather workers who came from appropriate class backgrounds and who subscribed to a correct, selfless, communist ideology. In the past, workers, poor and lower middle peasants, and revolutionary military personnel belonged to the “good” class while landlords, rich peasants, capitalists, and rightists belonged to the “bad” class.18 A Socialist Education Movement was launched in 1963 to hunt down bourgeois tendencies among bureaucrats, reflecting the continuous effort by party leaders to lead people along the correct road to communism in China. Under the Socialist Education Campaign, class struggle was re-emphasized, and once you had been branded a rightist, you were then sent to a labor camp or to jail, or to the countryside. This campaign had its peak during the Cultural Revolution, when the Red Guards attacked intellectuals, so-called capitalist roaders, and those who manifested the four olds—old ideas, old culture, old customs, and old habits— through mobilization and mass campaigns. They had to transform their elitist attitudes, material incentives, and other privileges, and to eliminate spiritual pollution. The Maoist idea stressed the voluntary, heroic efforts of the human will and the power of the masses. In addition, political purity rather than technical competence, and revolutionary goals rather than economic efficiency were emphasized exclusively.

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In the past, political supervision attempted to mobilize workers’ loyalties and discipline by labeling them “good model workers” (laodong mofan). According to the official 1999 statistics from the Chinese trade union, almost half of current unemployed workers received various kinds of awards calling them “model workers” prior to the reform and marketization. However, today these workers are criticized for their lack of skills and education, and are reeducated to be self-reliant, to become normal survivors in the marketized labor system in urban China. Now anyone who obeys and is loyal to the new marketized practice of the state can be considered to be a good, model worker. A clear example of this transformation can be found in the radical change in Labor Hero awards distributed by the Chinese trade union.19 Each year, the Chinese trade union gives awards to ten outstanding workers with exemplary behaviors across the whole country. However, beginning in 1999, they changed the name of the awards, rejecting the designation of “workers” (gongren), and replacing it with “employees” (zhigong). The awards were then granted to people in new occupations of nonworkers, such as managers, engineers, directors, school principals, and airplane pilots, not necessarily to the manual workers who exclusively received the award until 1998 (tables 8.1 and 8.2). As these two tables indicate, there has been tremendous change in the kinds of people who were awarded the title of “Outstanding Workers” in 1998 and “Outstanding Employees” in 1999. In 1998, every outstanding

Table 8.1 1998

Outstanding workers (quanguo shida jiechu gongren) for the year

Name

Party membership

Age

Occupation

Education level

Wang Tao Zhang Yansheng Ai Aiguo Lin Jufeng (F) Zhong Shen Yang Xiaohu Liu Tie’er Cao Luosheng

Y Y Y Y Y Y Y Y

43 35 47 42 34 47 57 50

Worker Coal miner Worker Worker Train worker Team leader Team leader Postal worker

High school Middle school Middle school Middle school Middle school

Zhang Weidong Diji Zhuoga (F)

Y Y

52 56

Worker Worker

None Elementary school High school Elementary school

Farewell to Socialist Labor in China Table 8.2 1999

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Outstanding employees (quanguo shida jiechu zhigong) for the year

Name

Party Membership

Age

Occupation

Education level

Fan Yuru

Y

48

4-year college

Zhang Wei Liu Jinping Lin Shiquan Zhou Huimin (F) Wang Xinquan Gong Liming Liu Zhiyang Ran Shucang

Y Y Y N Y N Y Y

46 54 44 35 48 34 48

Construction manager Team leader Chief pilot Chief designer Research director Team leader Technician Team leader School principal

Rao Caifu

Y

62

Bank manager

4-year college 2-year college Master’s degree 4-year college 2-year college 2-year college Middle school Teacher’s college High school

Source: The Yearbook of Chinese People 1999 and 2000 (Zhongguo renwu nianjian) pp. 153–156 and 171–174.

worker possessed a party membership, and none of them had been to college. They were traditional socialist workers with little education, but who were revolutionary, hard-working individuals in the industrial sector. This is a vision of Maoist China, workers with radical, red consciousness in an egalitarian society. In contrast to this, all but two of the award recipients had some kind of college education in 1999, and two of them do not even hold Party memberships. Party membership is still critical, but non-party members also are becoming crucial members of the new China, if they possess expert knowledge. They are engineers, pilots, bank mangers, school principals, designers, and managers outside the traditional state factories, but who can contribute to the economic growth and profits of the new, marketized China. This is another reflection that the state ceases to represent only the interests of workers, peasants, and intellectuals, and instead should represent the whole population, as the idea of Three Represents has opened the doors for capitalists to become Communist Party members. In 2001, the Chinese Communist Party (CCP) decided to invite capitalists and private managers into the party and even to name them “model workers.” In 2002, four businessmen were given May Day medals and another seventeen in Shaanxi province were named model workers, for others to emulate. The CCP announced that people in the private sector can be good, model citizens of China by obeying the law and contributing to the economic

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growth of society. The base for the CCP must be extended to welcome capitalists, the enemy from the past, since they are also contributors to a socialism with Chinese characteristics. In 1989, after the Tiananmen Massacre, the political leaders did not allow capitalists to become members of the Communist Party. Now, the old idea of politically motivated, revolutionary Socialist Man has become obsolete; an object to be corrected, educated, and transformed. Socialist Man is characterized by organizational dependence on the state and the work-unit, without responsibility for his own economic affairs. For example, under socialism, “Everybody is considered to be good, who obeys the will of the sovereign and is loyal to it, failing to do so is considered a moral transgression, a crime, whoever does so repeatedly is positively wicked.”20 However, in post-socialist China, the celebration of the new labor heroes can be examples of shift in ethical work: the transformation of the moral meaning of good workers and good people from socialism. The ethical work encompasses the concrete practices of both the condemnation of bad, immoral behaviors, as well as the encouragement and celebration of good, moral behaviors (Foucault, 1990). Ethical work in the past attempted to achieve revolutionary ideals, “redness,” and planned quotas, but in the present, the goal is to make economically responsible individuals with autonomy, initiative, and the capability for self-reemployment (zimouzhiye).21

Conclusion Under the name of a socialist market economy, the Chinese State no longer views full employment as the essential feature of socialism, and deprives workers of their status as socialist workers with permanent employment and social security. According to a recent empirical report on classes in The Chinese Academy of Social Sciences 2002, unemployed workers have become the lowest class among ten classes22 in the bottom of the class hierarchy in Chinese society, the truly disadvantaged who are facing exclusion from labor relations. Workers are no longer permanently located within the relations of production, and have been pushed into society. They are the ones who went through the lived experiences of “socialism betrayed” or “downward mobility” after being laid off from their state enterprises. The accounts of unemployed workers detailed in this chapter are the stories of people who have become painfully marginalized and excluded under the new mantras of the market economy, the victims of the dark side of postsocialist marketization.

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This question of workers is one of the most heated debates in regard to the transformation of post-socialist societies.23 This is also a question about the link between the end of socialism and the end of classes, fundamentally about “essence” and “meaning” of transformation from socialism. After losing job security and welfare, unemployed workers now live in the uncertain, unstable world of temporary, probationary, and part-time employment. Workers have become people outside their factories, as opposed to employees of the factories. They are no longer the industrial working class in the factories in the classical Marxist sense. Currently, under the slogan “some should get rich first” the egalitarian ideas of the past have been criticized as reducing the efficiency and performance of workers. The socialist ideas of lifetime employment, guided by the motto “to each according to their labor” have become burdens for the government and enterprises, and market-oriented ideas such as efficiency, competition, and self-reliance have been gaining increasing prominence and popularity. The crib-to-coffin security of the socialist workfare is gone forever, and city streets are full of masses of unemployed workers. Now, it is about time to say “Farewell to Socialist Labor” in China.

Notes 1. Interviews, Changchun, June 2001. 2. There has been a shift from class (jieji) to stratification (jieceng), or from a psychological evolution from a “work-unit person” (danweiren) to “social person” (shehuiren) in China. Officially, these unemployed workers are now to be called “laid-off employees” (xiagang zhigong) instead of “laid-off workers” (xiagang gongren). For more discussion, see Ann Anagnost, National Past-Times: Narrative, Representation, and Power in Modern China. (Durham and London: Duke University Press, 1997). 3. There are quite a few scholars working on this topic, and some of them are contributors for this volume. For example, Marc Blecher, “Hegemony and Workers’ Politics in China,” China Quarterly, 170 (June 2002), pp. 238−303; Cai, Yongshun, “The Resistance of Chinese Laid-off Workers in the Reform Period,” China Quarterly, no. 170 (June 2002), pp. 327–344; Feng Chen, “Industrial Restructuring and Workers’ Resistance in China,” Modern China, 29: 2 (2003), pp. 237–262; and “Subsistence Crises, Managerial Corruption and Labor Protests in China,” The China Journal, 44: 1 (2000), pp. 41–63 ; Eva Hung and Stephen Chiu, “The Lost Generation: Life Course Dynamics and Xiagang in China,” Modern China, 29: 2 (2003), pp. 204–236; William Hurst and Kevin O’Brien, “China’s Contentious Pensioners,” China Quarterly, no. 170 (June 2002), pp. 345–360; Ching Kwan Lee, “The ‘Revenge of History’: Collective Memories and Labor Protest in Northeastern China,” Ethnography, 1: 2 (2000),

200

4. 5. 6.

7. 8. 9.

10. 11. 12.

13.

14.

15. 16. 17. 18.

Jaeyoun Won pp. 217–237; and “From the Specter of Mao to the Spirit of the Law: Labor Insurgency in China,” Theory and Society, 31: 2 (2002), pp. 189–228; Also, Dorothy Solinger, “Why We Cannot Count the ‘Unemployed,’ ” China Quarterly, no. 167 (August 2001), pp. 671–688; and “Labor Market Reform and the Plight of the Laid-off Proletariat,” China Quarterly, no. 170 (June 2002), pp. 304–326. This would belong to Ching Kwan Lee’s position. This would be close to Blecher’s and Cai Yongshun’s perspectives. Xiagang means “to be off-duty, or to step down from one’s post.” Xiagang workers maintain labor relations with their work-unit, but are not actually working due to the financial and economic difficulty. The concept of xiagang involves three nos: no job post, no termination of labor relation with the work-unit, and no new jobs. Our introduction in this volume has provided more detailed explanation. Wang, M., ed., Restructuring China’s Social Security System (Beijing: Foreign Languages Press, 2002). Human Rights Watch, 2002. Paying the Price: Worker Unrest in Northeast China, 14 (6). M. Schuller, “Liaoning: Struggling with the Burdens of the Past,” in David S.G. Goodman (ed.), China’s Provinces in Reform (New York: Routledge, 1997), pp. 93–121. Interview, Beijing, August 2006. Interviews, Changchun, May–June 2001. They are truly “the Lost Generation” without much education or skills—and thus lack the credentials to enjoy the prosperity and wealth in the reform period as Eva Hung and Stephen Chiu pointed out in their Modern China article (2003). The concept of organizational dependence can be characterized “by ritual of deference, relatively unquestioning obedience, a tendency not to articulate objections and claims, directly, and common place attempts to cultivate personal times with superiors in order to advance or stabilize one’s position.” Workers’ organized dependency was a generic socialist pattern of authority according to Walder, and it created a patron–client relationship between workers and their superiors. For more, see Andrew G. Walder, Communist Neo-Traditionalism: Work and Authority in Chinese Industry (Berkeley and Los Angeles: University of California Press, 1986). Li, P. and Y. Zhang, Guoyuouqiye Shehui chengben fenxi (The Analysis of Social Costs of State-Enterprises in Transitional China) (Beijing: Shehukexuewenxian chubanshe, 2000). Mo, R. Jiuye (Employment), in Zhongguo Shehui xingshi fenxi yu yuce (The Analysis and Prediction of Social Situation in China) (Beijing: Shehui kexue wenxian chubanshe, 2001). Interview, Changchun, November 2000. From Reuters, September 20, 2002. Similarly, South China Morning Post (February 8, 2002) reports a story about Beijing’s publicity campaign to pacify workers. Larry Wortzel, Class in China: Stratification in a Classless Society (Westport: Greenwood, Press, 1987); Xiaowei Zang, Children of the Cultural Revolution:

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19. 20. 21.

22.

23.

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Family Life and Political Behavior in Mao’s China (Boulder: Westview Press, 2000). Zhongguo renwu nianjian, 1990–2002. F. Fehrer, A. Heller, and G. Markus, Dictatorship over Needs (New York: St. Martin’s Press, 1983). Daniel C. Lynch, 1999. After the Propaganda State: Media, Politics and “Thought Work” in Reformed China (Stanford: Stanford University Press, 1999). They are state officials, managers, entrepreneurs, technicians, office clerks, small business owners, service workers, industrial workers, peasants, and unemployed workers in the order of social hierarchy. Michael Burawoy, “Neoclassical Sociology: From the End of Communism to the End of Classes,” American Journal of Sociology, 106: 4 (2001), pp. 1099−1120; Gil Eyal, Ivan Szelenyi, and Eleanor Townsley, “The Utopia of Postsocialist Theory and the Ironic View of History in Neoclassical Sociology,” American Journal of Sociology, 106: 4 (2001), pp. 1121–1128.

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Chapter 9 State Policies and Chinese Laid-off Workers’ Limited Resistance Yongshun Cai

The restructuring of the state economy in China has resulted in significant socioeconomic changes. A direct consequence of the restructuring is the massive retrenchment in the industrial sector. While economic restructuring and retrenchment are not unique to China, what distinguishes China from many other countries is the scale of the retrenchment and the lack of a welfare system. From 1995 to 1999 the number of industrial state-owned enterprises (SOEs) decreased by more than 48 percent.1 Meanwhile, the number of employees in the state and collective sectors decreased by more than forty-eight million from 1995 to 2000, a number equal to the population of South Korea.2 But the massive layoffs in China were carried out in the absence of an adequate welfare system. The situation was further worsened because of the stringently controlled labor market that had an oversupply of labor.3 Several chapters in this volume examine workers’ strategies in securing new employment. But not all workers were able to do so, and as Hung and Chiu’s chapter in this volume shows, there have been grievances among the laid-off workers. Kernen’s chapter shows that restructuring has triggered numerous instances of resistance by workers, and some resistance took place on a large scale and with violence.4 While worker resistance has become a serious concern for China’s central government, it has not stopped reform. By the early 2000s, the Chinese government showed “scant signs of flinching from its programme of industrial reform” in order to reduce the financial burdens created by ailing SOEs.5 Reform measures, such as

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layoffs, privatization, or closure, which used to be applied to small- and medium-sized SOEs, have been extended to large ones. From the early 2000s, local governments began to disband reemployment service centers, which were previously established for helping laid-off workers, and to require laid-off workers to terminate their labor relations and enter the labor market directly.6 Why has the Chinese government been able to carry out the reform despite worker resistance? Worker resistance in China has received much attention in recent research, but much of the research, by highlighting workers’ motivation, has focused on why workers have resisted or why they have failed to do so.7 What has been inadequately addressed is government policies toward worker resistance. Like their counterparts in other transitional economies, Chinese workers often target the government because the government is directly involved in the reform or it is believed to be able to address workers’ problems.8 It is thus necessary to analyze government policies in order to understand worker resistance or its absence. This chapter aims to explore how government policies have affected laid-off workers’ resistance in China. It suggests that while state capacity is fundamental to economic reform, it does not necessarily amount to repression. The Chinese government reduces or prevents worker resistance largely by employing multiple measures to lend credibility to the withdrawal of its economic commitment to SOEs and their workers, although repressive measures have been adopted to deal with worker leaders. Specifically, the government tries to provide compensations for workers, to create a favorable reemployment environment, selectively punishes organizers, and exercises patience when confronted by laid-off workers. Government strategies increase workers’ perceived costs of action and undermine their confidence, thereby reducing the impact of worker resistance.

Worker Resistance and Government Policies The reaction of Chinese laid-off workers to retrenchment varies in that while some have resisted, others have not. In explaining worker silence, some research argues that laid-off workers fail to take action because of a lack of motivation. Blecher’s research suggests that workers fail to take action because “many—probably most—of China’s workers have come to accept the core values of the market and of the state as legitimate.”9 This may be the case for some workers, but there is abundant evidence that this is not the case for many others. For example, Hung and Chiu find that many laid-off workers belong to the “lost generation” whose “life histories

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bear witness to a series of state policy changes, each of which had disadvantaged them in some way.”10 Not all of these people would think that the market instead of the government is responsible for their problems, especially when they believe that the corruption of government-appointed managerial personnel led to the poor performance of their firms. Hence, there are other reasons why some of these people have failed to resist. In Blecher’s own research, some workers he interviewed reported that they did not take action because “there’s no use in doing so.”11 In other words, the possible costs involved in resistance and the slim odds of success may dampen the incentive of workers to resist, although they may not accept the core values of the market. Hence, whether workers will take action depends not only on their motivation but also on their ability and confidence in their action. As laidoff workers often take action to address concrete problems such as compensation or employment, they will lack an incentive to resist if their interests have been attended to. By the same token, they will be motivated to resist if their interests are ignored and they have difficulty accessing alternatives.12 This implies that if the government is able to undermine workers’ motivation or their ability to resist, it will be able to reduce the negative impact of layoffs. For this purpose, the Chinese government has employed a variety of policies to reduce worker resistance.

Providing Alternatives During the 1990s when massive layoffs began, the welfare system was inadequate, and many workers suffered tremendously.13 The government then required public firms that conducted retrenchment to establish reemployment service centers to provide laid-off workers with help, including subsidies and job training. These centers were also supposed to help laid-off workers find new jobs. Yet, they were of limited effectiveness. For example, in Beijing in 1997, only 6 percent of those who entered the centers were reallocated jobs by their firms. This situation not only increased the pressure on the reemployment centers but also discouraged workers from entering the centers. In Shanghai in 1998 less than 20 percent of those who entered the centers found jobs through the labor market or self-employment.14 In short, although governments at both the central and local levels enacted numerous policies to help laid-off workers secure new jobs, in many cities unemployment among such workers remained rampant. Another common practice to help laid-off workers was to offer a tax reduction or exemption to firms that hired laid-off workers and to

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self-employed laid-off workers. For example, the central government stipulated that firms with 60 percent of their labor force comprised of employees formerly laid off or unemployed would enjoy a three-year income tax exemption. In addition to implementing this policy, many local governments also gave such firms favorable treatment, such as cheap or free access to business sites and electricity.15 Such favorable policies were adopted in almost every city and even in some counties. In one example, the county government regulated that only laid-off workers could drive pedicabs to prevent peasants from competing with laid-off workers.16 But as will be discussed later, there are serious limitations to these policies. In addition, some local governments allowed laid-off workers to engage in previously prohibited businesses and simplified the business license application procedure, and others provided direct help. In a city in Henan province, for example, the labor bureau, the city construction bureau, the industrial and commercial bureau, and the tax bureau worked together to set up a trading market in which laid-off workers could conduct private businesses. Laid-off workers operating in that market were exempted from management fees and income tax for one–two years.17 Moreover, some governments also tried to help laid-off workers by providing reemployment capital. One method was to establish reemployment foundations based on contributions by the government, loans, donations, and other resources to help laid-off workers set up enterprises, to train people, and to subsidize laid-off workers. Other policies included free or subsidized use of state assets such as land, as well as encouraging laid-off workers to work on farmland, forests, and barren land in rural areas. Yet, the effectiveness of these policies varied significantly across regions, largely depending on local economic development and the financial resources of local governments. Thus, not all local governments succeeded with these policies. For example, in 1998 the People’s Congress of Wuhan in Hubei province refused to approve a report on reemployment work presented by a city government official because the report was too ambiguous and had equated making favorable policies toward laid-off workers with achieving success. This was the first time that a work report by the government failed to pass the People’s Congress in Wuhan.18 Another important reason for the government’s limited success in creating jobs for laid-off workers was the lack of coordination among government agencies. Many policies were poorly implemented because of the lack of coordination between those who made the policies and those who implemented them. As a matter of fact, many laid-off workers did not know there were special policies available to help them. One survey found that 7.3 percent of laid-off workers knew nothing about favorable policies regarding laid-off workers, whereas another 69 percent did not know the

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content of the policies.19 Self-employed laid-off workers often complained bitterly about how government agencies, including the tax bureau, the industrial and commercial bureau, the city hygiene department, and the market management department, failed to implement favorable policies like tax or fee reduction or exemption. While the government wished to create a favorable environment for laid-off workers, the pressure to generate revenue faced by state agencies, especially the tax bureau, stood in direct opposition to this goal. Tax collection was a major source of revenue and neither central nor local governments were willing to reduce their quotas. Because of such pressures, tax bureaus sometimes failed to implement tax exemptions granted by local governments. Some laid-off workers thus gave up their private businesses because the numerous fees, from some of which they should have been exempted, made it impossible for them to make a profit.20 Others engaged in retail businesses complained about the city management department that often prohibited people from setting up business in the streets, for the sake of keeping the city clean. One laid-off worker reported that doing retail business on the streets was just like being a thief, alluding to the onerous government regulations that made it impossible for people to earn an income.21 Indeed, for all the government programs initiated, efforts to help laidoff workers secure employment were generally unsuccessful. A survey of over one thousand laid-off workers across fifty-five cities in 1997 suggested that only 4.5 percent of them thought that the reemployment work of the government was of some help.22 In Changchun, the capital city of Jilin province, a survey in 1998 by the National Statistical Bureau suggested that only 2.7 percent of laid-off workers found jobs through direct government help.23 Aggregate statistics point to the limitations on government efforts to create a favorable reemployment environment for laid-off workers. In 1997, nationwide, the reemployment rate of laid-off workers was about 50 percent, but decreased to 40 percent in 1998, and 27 percent in the first half of 1999.24 It may not be an exaggeration that the government’s efforts to help workers secure jobs were a dismal failure in many places.25 If the government failed to accommodate workers’ interests and thereby to undermine their motivation for resistance, it had to adopt other measures to prevent worker resistance.

Preventing Collective Action There have been conflicts between state and labor in China ever since the founding of the People’s Republic. But most have been about economic

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issues.26 Political confrontations have been relatively rare, with a few notable exceptions, including factional clashes during the Cultural Revolution and the 1989 Tiananmen incident. The Chinese government has not relied solely on repression in dealing with worker resistance over the years. In the case of laid-off workers whose demands were usually economic, the government was reluctant to use repression that might damage its legitimacy. Legitimacy is important in that its absence not only causes resentment among the people but also demoralizes or “weakens the loyalty of the social control agents,” making it difficult for the regime to survive a crisis.27 Chinese laid-off workers often explicitly raise economic demands to dispel the government’s suspicion of political motives.28 Some demonstrating workers used slogans such as “Do not oppose the Party,” “Do not raise riots,” “Need jobs,” and “Need food.”29 These slogans focus entirely on economic issues and are likely to garner the sympathy of other people.30 Others sang the Party’s song “No Communist Party, No New China.” Still others wore simple uniforms to prevent outsiders from participating.31 Although laid-off workers sometimes demand punishment of corrupt managers, this noneconomic demand is seen as legitimate because of the government’s anticorruption goal and rewards offered to citizens who report corrupt cadres. In addition, repression is not always effective. Arguably, “the general effect of sustained repression is not to build up tensions to the point of a great explosion, but to reduce the overall level of collective action.”32 But even anticipated repression may fail to deter protests when potential participants are ignorant of the true risks or define risks differently. Repression, in the long run, tends to create tougher and better-organized opponents, and ineffective repression sows the seeds for future unrest. For example, the experience of Polish workers suggests “how the deadly conflict with the party stimulated and shaped the Polish workers’ creation of the idea of an independent self-governing trade union.”33 A Chinese police official acknowledged: “if we lose the support of the masses, even if these measures do hold things down for a while, they will rebound and do even more damage.”34 In contrast, nonrepressive measures can be effective. For instance, after the 1956 crackdown in Hungary, the Hungarian government sought to establish political “re-equilibrium” between the state and society. Reform measures were implemented to consistently raise the standard of living, which was “the best protection from the reoccurrence of political tensions and conflicts.”35 Hence, authoritarian regimes may employ multiple measures to deal with discontented citizens. The Chinese government has tried to silence laid-off workers by selectively imposing punishment on a very limited number of worker leaders and by undermining their confidence in action.

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Selective Punishment and the Risk of Action The justification for the use of repression usually goes beyond a particular event, “because terrorism is not merely the unbridled exercise of violence with certain special features—it is also the memory and the threat, even the implied threat, that under certain circumstances it could return.”36 Yet, as elsewhere, the Chinese government usually imposes “exemplary punishment” on organizers instead of average participants.37 As organizers are crucial to collective action, imposing punishment on such people is an effective way of reducing collective action.

Organizers and Collective Action The importance of leaders in collective action is self-evident. As Samuel Popkin points out, “the importance of the leader as a political entrepreneur—someone willing to invest his own time and resources to coordinate the inputs of others in order to produce collective action or collective goods—should not be underestimated.”38 Organizers of China’s laid-off workers are not political entrepreneurs in that they neither provide selective incentives or coercion nor have career aspirations, but they do play several important roles in making collective action possible.39 One important role of organizers in Chinese workers’ action is to disseminate information. Individuals participate in collective action only when they know others will do the same. Communication and coordination are particularly important for Chinese laid-off workers. After workers are laid off, they no longer have regular contact with each other. In China, most SOEs and urban collective enterprises are located in cities rather than in small industrial towns (except enterprises such as mines), and workers tend to scatter after being laid off. Collective action will be possible only if there are some people who are willing to mobilize these workers. Sometimes, the coordination problem is solved because organizers create a focal point. For example, in 1997, a silk factory in the city of Mianyang in Sichuan province was declared bankrupt and the limited worker subsidies were embezzled by its corrupt manager. On July 6, a worker, reportedly a college student who was recently assigned to the factory, posted a notice in the factory urging all workers to come to the factory to meet with a vice mayor at eight o’clock the next morning to discuss their subsistence problem. Many workers came the next day but did not see the vice mayor. The gathering escalated into a large-scale demonstration in which workers took to the streets and blocked traffic. They were soon joined by laid-off

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workers from other factories. Reportedly, tens of thousands of people participated. This was among the largest demonstrations in China in the 1990s.40 Organizers of Chinese laid-off workers are important also because they bear more risks than ordinary participants due to repressive government policies that target organizers. The presence of organizers thus not only inspires the confidence of participants but also reduces their risk. As some laid-off workers in Beijing claimed, “Now there is no person who is willing to organize demonstrations; if anyone took the lead, I would surely participate.”41 Hence, when organizers appear, collective action is likely. In Nanchong of Sichuan province in March 1996, workers of the city’s largest silk factory, called Jialihua, took their manager hostage and paraded him through town, demanding back pay. The unrest began with a few workers of the silk factory, a state firm that once supported over ten thousand people, including its workers’ dependents. The firm’s poor performance forced it to lay off workers and reduce the salaries of those who stayed. But the factory leaders were not affected although they were blamed by workers for driving the factory to ruin. In March 1996, the general manager of the factory planned to go to Thailand with his wife on an official inspection tour at the company’s expense. A few workers waited at the factory for the manager to arrive. When he showed up they loaded him onto the back of a flatbed truck. They forced him into the painful and demeaning “airplane position”—bent at the waist, arms extended straight out to the sides. The workers marched ten kilometers through the rain to the downtown and paraded him through the streets. Meanwhile, more and more workers from this factory and other enterprises heard the news and joined the march. The total number of participants grew to over twenty thousand. The day-long parade ended at the city government building, with workers blocking the government office compound. Worker leaders took turns to deliver speeches. The rally ended peacefully after the government promised to pay the owed salary. As expected, four leaders were detained.42 In this case, a few leaders made large-scale collective action possible by starting the process at an unknown risk. Finally, because organizers are often cadres who have experience in dealing with the government, they are able to articulate workers’ demands. In the pre-reform period, Chinese citizens in urban areas often pursued personal and collective goals through their work units rather than by going directly to the government.43 Many of them need to undergo a learning process when they approach the government through unconventional means. Hence, laid-off workers need representatives who can negotiate with the government and articulate their concerns and demands. Organizers often take on this responsibility, making them essential for the success of

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collective action. It is also for this reason that laid-off workers realize the necessity of protecting their leaders. When a worker leader was detained during protests in Liaoyang in 2002, workers protested for his release “because if our representative cannot speak for us, what else is there to talk about?”44

Punishing Organizers The Chinese government realizes the importance of organizers in collective action. A research report by Party organs in Sichuan province in 1998 admits that “over 95 percent of the large-scale collective events involve organization by some people. They seem to have a division of labor, planning, and organizing.”45 Given their importance, government policy toward organizers has been repressive. The old Chinese saying, “The first bird that comes out of the nest is the first to get shot,” remains true today. Political events since the founding of the People’s Republic have repeatedly borne out the government’s determination to punish organizers of dissent. Therefore, although demonstrations and assemblies are legal according to the constitution, those who organize such activities can be charged with violating an article of the Criminal Law—“The crime of organizing people and breaking the public order.” As an interviewee put it, “The Constitution says you have the freedom to hold a demonstration, but the Constitution does not say you will still have freedom after the demonstration.” In other words, people, in most cases the organizers, may be punished after the fact. Public security policies regarding organizers are harsh. The secretary of a provincial Political and Legal Commission states the rules in dealing with participants in collective action: “There should be a clear distinction between crimes and non-crimes, between the few organizers or instigators and the masses in collective events, and between the serious law-violating behavior of a few people and the less serious law-violating behavior of most other participants.”46 The 1989 Tiananmen incident sent a credible signal that the government would not tolerate any attempt that threatens its authority, nor would it tolerate the organizers of such activities. A more recent example is the punishment of the leaders of the Falungong sect. In 1999, the government arrested a number of leaders of this sect across the country. The four leaders in its Beijing headquarters were the first to be apprehended and were given prison sentences of eighteen, sixteen, twelve, and seven years, respectively.47 In the reform period, both peasant and worker organizers have been arrested and sent to jail for organizing activities.48 In 1995, for example, dozens of workers forced their way into the compound of a city government,

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demanding payment of overdue salaries and the punishment of their manager. After receiving no response from the government, these workers blocked a bridge, stopping thousands of vehicles along the road. Upon this news the mayor received the protestors and sent two investigation groups, one led by the supervision bureau and the other by the public security bureau, to the factory. The supervision bureau then found evidence of the manger’s corruption and arrested him. Meanwhile, the public security bureau arrested two worker organizers who were claimed to have a problematic history.49 Government repression of organizers is an effective deterrent. In the 1989 Tiananmen incident, student participants exercised caution: “Those who walk in the front row of the demonstration and get caught are not the most important leaders. They are young people in their first or second year. They are 17 or 18. For them, it’s not so bad. But those in their third or fourth year are more careful.”50 Some people see the lack of assertive leaders who dared to command the ranks as an important reason for the less effective student movement: “The newly formed student organizations still have no presidents, only committees that are so large that they are ungainly and many of the most talented students are afraid to take an official position in an organization that is branded illegal.”51 In an interview, a laid-off worker also reported how the fear of punishment resulted in anonymous or leaderless mobilization.52 She did not know who organized their action. Someone telephoned her and said, “It was said that they (other people) will go to the government tomorrow, will you go?” The next day, about two hundred people from her factory gathered in front of the government office. As they waited, some bystanders suggested that they bring in workers from other factories to join them. But some replied, “Who is willing to take the risk?” After about an hour, a government official came out and said that the government was willing to negotiate with their representatives. But workers replied, “We do not have representatives, and we came here on our own.” The official said it was impossible for the government to talk with so many people. The workers then elected ten representatives, thinking that if the government was likely to punish one or two representatives, it was less likely to punish ten. Chen also finds that the collective action of Chinese laid-off workers tends to be “leaderless” because of the risks.53

Selective Punishment and Social Stability in China This policy of selective punishment has a number of important implications for political stability in China. First, it reduces collective action by

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inhibiting the emergence of organizers. Some labor activists have admitted that the risk involved in organizing protests could be prohibitively high.54 Second, it encourages peaceful collective actions, when they occur. Piven and Cloward find that organized action tends to be less effective than unorganized action: “(I)n large part, organizers tended to work against disruption because, in their search for resources to maintain their organizations, they were driven inexorably to elites, and to the tangible and symbolic supports that elites could provide.”55 In China, organized action tends not to be destructive because of the fear of punishment of organizers. It is clear to laid-off workers that government responses depend not only on what they say but on what they do. Hence, violence is seldom used because, as elsewhere, it “merely hastens and insures its failure because its actions increase the hostility around it and invite the legitimate action of authorities against it.”56 In most cases, laid-off workers adopt moderate modes, and when collective actions spin out of control it is usually because of unexpected escalation of appeals or catalytic events that provoke strong emotions. Third, selective punishment helps reduce the scale of resistance. A salient characteristic of laid-off workers’ collective action is that it is based in individual firms, which limits the scale. While there have been multifirm actions, such cases are quite limited, except when laid-off workers from different firms happened to approach the government at the same time.57 One reason for the rarity of multi-firm actions is that the demands of workers of different firms are different, or workers believe that they are different.58 More importantly, few people are willing to organize multifirm actions. Some workers think that acting with laid-off workers from other enterprises may lower their chances for success because it would raise the government’s suspicion.59 This creates a dilemma. If laid-off workers organize large-scale action, it puts the organizer at great risk; if they engage in small-scale action, it often fails to put enough pressure on the government. As some protesters in Liaoning province said, “If we go in dribs and drabs, nobody pays attention to us. We need all the laid-off workers to go to the government at the same time.”60

Government Patience: The Cost of Sustained Action While the government is less tolerant of organized and destructive action, workers may take peaceful and leaderless action. The government has to convince laid-off workers to become self-reliant in order to continue with

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the reform, because widespread peaceful action may eventually cause chaos in society. As “concessions may whet the appetite of opposition groups and, thus, may become the occasion for expressing more radical demands,”61 the government must make credible its withdrawal of commitment. To this end, a policy of “taking care of your own children” has been adopted in a number of localities, including Shanghai, whose government is well known for its reemployment programs.62 Under this policy, the government does not take responsibility for workers. Instead, the firm, as long as it exists and regardless of the difficulties it faces, has to “take care of its children” (i.e., workers). The government may also refuse to make concessions to laid-off workers by engaging in a peaceful standoff. In doing so, it neither represses nor takes care of participants. When government policies gain credibility, laid-off workers will not take action or sustain their struggle. This strategy is exemplified by a bankruptcy case in Chongqing. In 1992, the city government decided to declare bankrupt the Chongqing Knitting Factory, a factory of three thousand workers, which was the largest bankruptcy case in the country at that time. After workers received news of the bankruptcy, their representatives wrote a long letter, entitled “The Appeal of the Three Thousand Workers,” to the concerned municipal, Party, government, and legal organs. In the letter, they pointed out that bankruptcy was a wrong decision and that workers, especially those retired, complain bitterly, and they blame the bureaucrats for their plight and are eager to appeal to upper-level authorities. They have met many times to discuss the measures to check factory leaders, and such complaints have increased dramatically these days. It is very likely that they will take action.63

The workers did take action. A government official who came to the factory was detained for over twenty hours, and hundreds of workers took to the streets and blocked traffic for four days. They chanted slogans such as “Chairman Mao, we miss you very much,” “We need jobs, we need food, we want to survive,” and “Withdraw the bankruptcy application.”64 When a local newspaper reported that bankruptcy would be meaningless if the government continued to reallocate workers, more than two hundred workers, most of whom were women, came out in the extremely hot weather and forced the factory manager and the Party secretary to withdraw the bankruptcy application. The city government, however, did not back down. The mayor made his rationale crystal clear: Premised on social stability, we should continue with the reform. The issue of “letting enterprises die” has to be settled sooner or later. Of course, we

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can help them survive, but as time goes on, we will pay a higher price and cannot truly ensure stability. At present, what we can do is to reduce the influence of the bankruptcy as much as possible. The workers of the Knitting Factory asked the government to pay its debts. Even if the government has the ability to clear its debts, can the government pay the debts for all the enterprises in the city? If the Knitting Factory is set up as an example, it would be difficult for us to handle such issues in the future. For this reason, I am for the bankruptcy, and the court should accept it.65

After the Chongqing government refused to bail out the factory, other textile factories in the city realized that the government was determined to withdraw its financial commitment. Those with connections or skills tried to leave the textile sector. After November 1992, the number of workers who attended the two driving schools in the city increased every day (they planned to learn how to drive so that they might have the option of becoming taxi or truck drivers if they were laid off). A director of a textile factory said, “Reality is such, and I cannot change it. I have decided to accept the offer of a managerial position in Guangdong province.” Some older workers retired early, others maintained their membership in their enterprises and found jobs elsewhere, and still others simply resigned.66

Peaceful Confrontation as a War of Attrition Sometimes, the strategy of peaceful confrontation without concessions amounts to a war of attrition in which laid-off workers back down first because they are under pressure to make ends meet. This produces a profound impact on laid-off workers’ confidence in collective resistance. An individual tends to take a course of action “that will satisfy more of his desire rather than less, and which has the greater chance of being successfully executed.”67 If workers believe that the government will not make concessions, they will not think that taking action is worthwhile. 68 As a worker reported: The first time when dozens of us went to the government for back pay, an official first asked us the name of our factory. He then called our factory leaders to take us back. The manager persuaded us to leave and promised that the enterprise would try to pay us. We agreed. But it turned out once again that the factory could not get any money. The next time we went to the government for help, nobody was willing to come out to talk with us. After almost two hours, an official came out and said that the government would try to help the enterprise to obtain loans to pay us. And we were told to go home.

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Again, we did not receive any notice for days. The third time when we went there, another official talked with us perfunctorily. We all understood that there was no hope. After that, few of us went to the government any longer. Nowadays, it is common that some people gather in front of the government office, waiting for hours without any outcome. (Interview, China, 1999)

Similarly, in one reported case a woman became self-employed after she had sought help from the government several times but in vain. This woman, Li, was laid off although she was once a municipal model worker in northeast China. When she was laid off, they had two children in school and her husband had been receiving a monthly salary of CNY90 due to the poor performance of his enterprise. She first approached the city’s Women’s Association and hoped that it would negotiate with the leaders of her company to allow her to return to work. But the efforts of the Women’s Association failed. Li then went to the Bureau of Civil Affairs, hoping that the bureau could provide some help. A cadre in the bureau met with her. Li told him about her family life in great detail, and the cadre was sympathetic to her plight. But before Li finished her story, he shook his head and sighed, “Now the whole city and the whole province are plagued by this problem. We really do not have any solution . . . Nowadays there are too many people like you. Don’t you see this notebook?” He took out a very thick notebook containing the names of the laid-off people who had visited the bureau and said, “Look at this, it is beyond our ability to help this many people.” Li was frustrated to tears. She could not believe that as a municipal model worker, she was left unsupported. The next day, she went to the city government and happened to meet some laid-off workers picketing for jobs in front of the government office, waiting to hear from the government. Li joined them and sat in the plaza. But they did not see any official after waiting for hours. During that time, another woman, Zhang, happened to pass by. Zhang and Li were acquaintances. When Zhang saw Li in the sit-in, she came by to say hello. Knowing Li was laid off, she said, What are you doing here? I came here several times a few months ago when I was laid off. It was useless. Do you not see so many laid-off workers? Who should be assigned a job? I thought it through later and decided not to look for anyone for help. I have to depend on myself, and I learned how to fix bikes.

Li was convinced and later became self-employed. Not long after that, she was elected a municipal model worker again, this time as a “Model SelfEmployed Laid-off Worker.”69

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The government’s lack of response also prevents workers from engaging in lengthy appeals. In one example, a steel factory of about twenty-eight hundred workers could no longer operate due to poor performance (it even failed to pay its electric bills). As a last solution, part of the factory was contracted to a foreign businessman who hired less than one-third of the employees. Yet the rent the foreigner paid was a meager sum, and many laid-off workers and retirees received nothing. They took action to demand subsidies. The factory was tens of miles away from the city government, and workers had to take a ride to get to the city. One day in the summer of 1999, more than two hundred workers went to the city and blocked the office compound of the city government. They stood there for hours but no official came to talk to them. The workers then walked to the city Party committee, and still no cadres came to talk to them. The weather was very hot, and workers were tired, thirsty, and hungry. Their demonstration lasted for only two days and did not succeed. It was said that when the workers’ demonstration was reported to the city government, the mayor said, “As long as they are not tired of the sun, they can carry on for as long as they wish.”70 Similarly, in Shenyang, capital city of Liaoning province, about 30 percent of the workers of the state and collective sectors were laid off by the late 1990s,71 but there was not much unrest launched by laid-off workers.72 As Kernen also finds, In Shenyang today workers appear indifferent to such actions because they know that marches and protests will not change their fate. For this reason, relative peace and quiet has now returned to the streets of the city. But an increase in other social problems is still proof of the crisis in the city: suicide, crime, divorce, and prostitution are on the rise.73

As the government’s withdrawal of support to loss-making SOEs gains credibility, it produces a discouraging effect. Fewer people now believe that the government would provide jobs for them. For example, a survey conducted in August 1997 found that about 79 percent of the laid-off workers hoped that the government would provide jobs. By November of 1998, only 9.5 percent of laid-off workers surveyed held the same hope, whereas about 72 percent replied that they would try to find jobs by improving their skills.74 This is perhaps the most important reason why many workers focused on layoff compensation or subsidies instead of job allocation as time went on. While the media promotes the idea that this is due to a change in “reemployment mentality,” laid-off workers know that it was simply the more practical choice: “We could not depend on the government for reemployment. Times are different, as is the government.” 75

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Others reported that “one cannot simply spend the rest of his time approaching the government every few months for a living.”76

Conclusion The reform of the state economy in China has caused the strong resentment of workers whose interests were threatened. Without the public firm acting as a buffer, Chinese workers now directly confront the government because the latter has been directly involved in the reform process or because it is expected to assume responsibilities for workers. While it is in the interest of the government to attend to the needs of laid-off workers, it is beyond its ability to do so. Given the fact that the government has no legitimate reason to suppress the nonpolitical demands of laid-off workers, the government’s use of force in response is not always justifiable, although it remains a credible means. The ways in which the Chinese government deals with laid-off workers demonstrate that an authoritarian regime does not necessarily utilize repression to achieve its goals. The government has adopted a number of different measures to weaken laid-off workers’ motivation for resistance, increase their cost of action, and undermine their confidence. Specifically, the government tries to provide alternatives to laid-off workers by adopting various favorable policies, but the implementation of these policies remains a problem. Another important method is to impose punishment on organizers of collective action. This method is effective because organizers are often crucial to the occurrence of collective action. By preventing their emergence, the government determines the occurrence, nature, and scale of worker resistance. The government also engages in wars of attrition with laid-off workers. In doing so, it puts direct economic pressure on laid-off workers because the longer they sustain their action, the longer they go without an income. This measure has produced a discouraging effect and works to the advantage of the government. While these measures cannot eliminate all resistance, they significantly increase the difficulty of worker resistance in China.

Notes 1. Chinese Statistical Yearbook 2000, p. 424. 2. Zhao Yining, “Wei shehui ruoshi qunti ‘xuezhong songtan’ ” (Providing Crucial Help to the Deprived in Society), Liaowang (Perspective), no. 15 (2002), pp. 11–13.

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3. Dorothy Solinger, “Labor Market Reform and the Plight of the Laid-off Proletariat,” The China Quarterly, no. 170 (June 2002), pp. 304–326. 4. Ching Kwan Lee, “From the Specter of Mao to the Spirit of the Law: Labor Insurgency in China,” Theory and Society, 31: 2 (2002), pp. 189–228; Yongshun Cai, State and Laid-Off Workers in Reform China: The Silence and Collective Action of the Retrenched (London: Routledge, 2006); William Hurst and Kevin O’Brien, “China’s Contentious Pensioners,” The China Quarterly, no. 170 (June 2002), pp. 345–360; Feng Chen, “Subsistence Crises, Managerial Corruption and Labor Protests in China,” The China Journal, 44 (2000), pp. 41–63; Dorothy Solinger, “The Potential for Urban Unrest: Will the Fencers Stay on the Piste?” in David Shambaugh (ed.), Is China Unstable? (Armonk, New York: M.E. Sharpe, 2000), pp. 79–94. 5. James Kynge, “Chinese Miners Riot over Severance Pay,” Financial Times, April 2000, 8. 6. Shenyang wanbao (Shenyang Evening), October 27, 2001. 7. Also see Kernen’s chapter on this view. Lee, “From the Specter of Mao to the Spirit of the Law”; Hurst and O’Brien, “China’s Contentious Pensioners”; Chen, “Subsistence Crises, Managerial Corruption and Labor Protests in China”; Marc Blecher, “Hegemony and Workers’ Politics in China,” The China Quarterly, no. 170 (June 2002), pp. 283–303. 8. Grzegorz Ekiert and Jan Kubik, “Contentious Politics in New Democracies: East Germany, Hungary, Poland, and Slovakia, 1989–1993,” World Politics, 50 (1998), pp. 547–581. 9. Blecher, “Hegemony and Workers’ Politics in China.” 10. Eva Hung and Stephen Chiu, “The Lost Generation: Life Course Dynamics and Xiagang in China,” Modern China, 29: 2 (2003), pp. 204–236. 11. Blecher, “Hegemony and Workers’ Politics in China.” 12. Song Baoan and Wang Yushan, “Changchun shi xiagang zhigong de wenjuan diaocha” (Questionnaire about the Laid-off Employees in Changchu), in Lu Xin et al. (eds), 1999 nian zhongguo shehui xingshi fenxi yu yuce (An Analysis of the Social Situation in China and Some Predictions for 1999) (Beijing: Shehuikexue wenxian chubanshe, 1999), pp. 282–283. 13. Solinger, “Labor Market Reform and the Plight of the Laid-off Proletariat.” 14. Huang Chenxi and Wang Daben, “Shanghai shi guoyou qiye xiagang renyuan fenliu anzhi de xianzhuang, wenti yu duice” (The Current Situation and Problems of the Allocation of the Laid-off Workers in State Enterprises and Countermeasures in Shanghai), Shichang yu renkou fenxi (Market and Demographic Analysis), no. 4 (1999), pp. 22–25. 15. Xu Jianchuan, Zhou Dingchun, and Zhao Xuwei, eds, Xiagang zhigong jiben shenghuo baozhang yu zai jiuye gongzuo shouce (A Handbook of the Basic Living Guarantee and Reemployment of Laid-off Employees) (Beijing: Zhongguo jiancai chubanshe, 1998). 16. Interview, China, 1999. 17. Xu, Zhou, and Zhao, A Handbook of the Basic Living Guarantees and Reemployment of Laid-off Employees, 139.

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18. Ruan Ying, “Wuhanshi zaijiuye gongzheng baogao weihe yidu bei fujue” (Why Was the Report on the Reemployment Work of Wuhan Rejected?), Minzhu yu fazhi (Democracy and Rule of Law), no. 12 (1997), pp. 16–17. 19. Chen Lu and Yang Lianyun, “Xiagang zhigong zaijiuye nandian wenti de diaocha fenxi yu duice jianyi” (An Analysis of the Difficult Problems in the Reemployment of Laid-off Employees and Countermeasures), Qiushi (Seeking the Truth), no. 3 (1999), pp. 19–22. 20. Interview, China, 1999. 21. Zhang Cunlin, “Tiaochu lushan jian zhengmian” (To See the Truth by Going Out of the Circle), Xinwen jizhe (Journalists), no. 5 (2000), pp. 56–57. 22. The Research Group, “Kunjin yu chulu” (The Plight and Solutions), Shehuixue yanjiu (Sociological Research), no. 6 (1997), pp. 24–34. 23. The City Investigation Team of the State Statistical Bureau, “Xiagang zhigong zaijiuye qingkuang diaocha” (An Investigation of the Reemployment of Laidoff Employees), Tongji ziliao (Statistical Materials), no. 16 (1998), pp. 10–12. 24. Chen Qingtai, Wu Jinglian, and Xie Fuzhan, eds, Guoqi gaige gongjian shi wu ti (Fifteen Critical Issues in the Reform of SOEs) (Beijing: Zhongguo jingji chubanshe, 1999); China Daily, August 30, 1999. 25. Solinger, “Labor Market Reform and the Plight of the Laid-off Proletariat.” 26. To be sure, it is also possible that economic issues involve political rights of citizens. Elizabeth Perry, “Shanghai’s Strike Wave of 1957,” The China Quarterly, no. 137 (March 1994), pp. 1–27. 27. Anthony Oberschall, “Opportunities and Framing in the Eastern Europe Revolts of 1989,” in Doug McAdam, John D. McCarthy, and Mayer N. Zald (eds), Comparative Perspectives on Social Movements (Cambridge: Cambridge University Press, 1996), pp. 172–199. 28. Chen, “Subsistence Crises, Managerial Corruption and Labor Protests in China.” 29. Zuo Fu, 21 shiji shui gei ni fan chi (Who will Feed You in the 21st Century?) (Nanchang: Baihuazhou wenyi chubanshe, 1998), p. 111. 30. Ching Kwan Lee, “The Revenge of History: Collective Memories and Labor Protests in Northeastern China,” Ethnography, 1: 2 (2000), pp. 217–237. 31. These strategies were reminiscent of what students had adopted in the early period of the 1989 Tiananmen incident when they did not intend to offend the government. Their slogans included “Support the Communist Party,” “Uphold Socialism,” “Support the Four Cardinal Principles,” “Sincere Talk,” “Eliminate Corruption, Down with the Merchant Officials,” “Oppose Turmoil,” and the like. The Education Commission, Jingxin dongpo de wushiliu tian (The Soul-Stirring 56 Days) (Beijing: Dadi chubanshe, 1989), p. 53. 32. Charles Tilly, From Mobilization to Revolution (New York: Random House, 1978), p. 228. 33. Roman Laba, The Roots of Solidarity: A Political Sociology of Poland’s WorkingClass Democratization (Princeton, NJ: Princeton University Press, 1991), p. 37.

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34. Elisabeth Rosenthal, “Workers’ Plight Brings New Militancy in China,” New York Times, March 10, 2003. 35. Grzegorz Ekiert, The State against Society: Political Crisis and Their Aftermath in East Central Europe (Princeton, NJ: Princeton University Press, 1996), p. 115. 36. Istvan Lovas and Ken Anderson, “State Terrorism in Hungary: The Case of Friendly Repression,” Telos 54 (1982–1983), cited in Ekiert, The State against Society, p. 101. 37. Sidney Tarrow, Power in Movement: Social Movements, Collective Action, and Politics (Cambridge: Cambridge University Press, 1994), p. 95. 38. Samuel Popkin, “Public Choices and Peasant Organization,” in Clifford R. Russell and Norman K. Nickolson (eds), Public Choice and Rural Development (Washington, D.C.: Resources for the Future, 1987), pp. 256–257. 39. See also Chen, “Subsistence Crises, Managerial Corruption and Labor Protests in China.” 40. The local government responded by arresting a number of participants and publishing an official editorial in the Mianyang Daily accusing hostile foreign and domestic forces of stirring up trouble. No information on the college student who posted the notice was available. This was reported by some of our interviewees, China, 1999. 41. The Beijing Labor Bureau, “Jiakuai shishi ‘zaijiuye gongcheng,’ duoqudao anzhi xiagang zhigong”(Speeding Up the Implementation of Reemployment and Allocating Laid-off Employees Through Multiple Channels), in The Research Office of the Beijing Party Committee and Beijing Labor Bureau, Zaijiuye gongzuo de yanjiu yu shijian (Studies on and Practices of Reemploy ment) (Beijing: Jingji guanli chubanshe, 1998), p. 135. 42. The government asked the bank to lend enough money to the factory to cover back wages. When the news reached other factories, they, too, demanded and received loans. “We Want to Eat,” Far Eastern Economic Review, June 26, 1997, pp. 14–16. 43. Tianjian Shi, Political Participation in Beijing (Cambridge: Harvard University Press, 1997). 44. Erik Eckholm, “Where Workers, Too, Rust, Bitterness Boils,” The New York Times, March 20, 2002. 45. The Research Group of the Ministry of the CCP Organization, 2000–2001 China Investigation Report (Beijing: Zhongyang bianyi chubanshe, 2001), p. 290. 46. Ji Zhengfeng, “Yufang he chuzhi qunti xing shijian de duice xuanze” (A Selection of Modes for Handling the Prevention and Punishment of Group-Based Incidents), Lilun yu shijian (Theory and Practice), no. 16 (1999), pp. 30–31. 47. Renmin ribao, December 27, 1999. 48. Gongren ribao (Workers’ Daily), November 4, 1998. 49. The Central Complaint Bureau, ed., Zhongguo xinfang xiezheng (A Record of People’s Letters and Appeals in China) (Beijing: Zhongguo gongren chubanshe, 1998), p. 103.

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50. Nicholas D. Kristof, “Organization Woes Slow China’s Student Protesters,” New York Times, May 1, 1989. 51. Ibid. 52. Anonymous mobilization has also been used by other groups of people, such as taxi drivers, in China. Fazhi ribao (Legal News Daily), July 3, 2000. 53. Chen, “Subsistence Crises, Managerial Corruption and Labor Protests in China.” 54. Jiang Xueqin, “Fighting to Organize,” Far Eastern Economic Review, September 26, 2001. 55. Frances Fox Piven and Richard A. Cloward, Poor People’s Movements: Why They Succeed, How They Fail (New York: Vintage Books, 1979), p. xii. 56. William Gamson, “The Success of the Unruly,” in Doug McAdam and David A. Snow (eds), Social Movements (Los Angeles, CA.: Roxbury Publishing Company, 1997), pp. 357–364. 57. Interview with seventy-seven laid-off workers in China, 1999. 58. Similarly in Russia in the early 1990s, “Most strikes were short-lived and over issues which workers perceived to be specific to their factory or their shop, even if, in reality, the same grievances were being expressed by workers elsewhere.” Donald Filtzer, Soviet Workers and the Collapse of Perestroika: The Soviet Labor Process and Gorbachev’s Reforms, 1985–1991 (New York: Cambridge University Press, 1994), p. 115. 59. Lee, “The Revenge of History.” 60. Erik Eckholm, “Where Workers, Too, Rust, Bitterness Boils,” The New York Times, March 20, 2002. 61. Anthony Oberschall, Social Conflict and Social Movements (Englewood Cliffs: Prentice-Hall, 1972), p. 75. 62. Wang Daben, “Shanghai shi qiye xiagang daigong ren yuan jiqi fenliu” (Laid-off Workers and Other Unemployed People and Their Allocation in Shanghai Enterprises), Yazhou yanjiu (Asian Study), no. 15 (1997), pp. 70–88. 63. Xie Delu, Zhongguo zuida pocanan toushi (A Perspective on China’s Biggest Bankruptcy Case) (Beijing: Jingji guanli chubanshe, 1993), p. 54. 64. Cao Siyuan, ed., Jianbing yu pochan caozuo shiwu (Practical Procedures of Merger and Bankruptcy) (Beijing: Gongshang chubanshe, 1997), p. 305. 65. Xie, Zhongguo zuida pocanan toushi, p. 77. 66. Ibid. 67. John Rawls, A Theory of Justice (Oxford: Oxford University Press, 1973). 68. ACFTU, 1997 Zhongguo zhigong zhuangkuang diaocha (1997 Investigation on the Condition of Chinese Employees) (Beijing: Xiyuan Chubanshe, 1999), p. 1054. 69. Li Zuoming, “Cong xiagang nügong dao zhongguo guaqi diyi ren” (From a Laidoff Woman to China’s First Person Who Paints with a Knife), Fazhi yu jingji (Law and Economy), no. 6 (1999), pp. 33–34. 70. But he was not unsympathetic. Instead he admitted that he would have given the workers some money had he had any. This city could not even pay its cadres and teachers on time because of financial difficulties. Interview, China, 1999, no. 38.

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71. Lu Aihong, Xiagang, zenmeban, zenmekan (Layoff: How to Handle It, How to Look at It) (Beijing: Jingji kexue chubanshe, 1988), p. 6. 72. Lu Xin et.al, eds., 1999 Social Bluebook (Beijing: Shehui wenxian chubanshe, 1999), p. 248. 73. Antoine Kernen, “State Enterprises in Shenyang: Actors and Victims in the Transition,” China Perspectives, no. 14 (1999), pp. 26–32. 74. But it was not indicated where the survey was conducted. Chen and Yang, “Xiagang zhigong zaijiuye nandian wenti de diaocha fenxi yu duice jianyi.” 75. Interview, China, 1999. 76. Interview, China, 1999.

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Chapter 10 The Reemergence of Street Protests: State Workers Challenge the Chinese State Antoine Kernen

Demonstrations by people working at or laid off from China’s state enterprises have been steadily increasing in frequency since the mid 1990s. Despite some uncertainty over the published figures, 120,000 is the most quoted approximate annual total number of demonstrations over these past few years.1 Their relative frequency should not mislead us into thinking that they have become an everyday means of protest. Gatherings in public spaces are still forbidden, since official authorization is impossible to obtain de facto. In this context, the labor protests that have taken place since the late 1990s are characterized by their brevity and the limited number of people involved. It is clear also that most protests are not linked to one another. The Chinese authorities did not have to face a nationally organized labor movement such as Solidarity in Poland, but only small and atomized street protests that do not threaten the state. According to the importance of the laying off process, one can analyze the reasons for such “limited resistance”2 as Yongshun Cai did in his contribution. I chose to turn the question in another way and analyze the forms of “limited resistances.” Recourse to the street to express discontent to the authorities is indeed a quite new phenomenon. The multiplication of workers’ protests has occurred simultaneously with the speeding up of state-owned enterprise (SOE) reform since the

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beginning of the 1990s. The reinforcement of “hard budget constraints” was then combined with the granting of greater leeway in personnel management and the laying-off of workers. Since then, the SOEs (and old collective enterprises as well) have regularly eliminated portions of the workforce. As Gallagher stresses in her chapter: “Rather than being limited to just one type of lay off policy, SOE managers and local officials have designed numerous subtypes of xiagang.”3 And particularly during the first years of the laying off process (1993–1999), the different early-retirement schemes had to be used extensively to lay off redundant workers from the SOEs.4 This laying-off process should have been accompanied by the implementation of a new urban social safety net, but the net has turned out to have more substance on paper than in reality. Most xiagang workers (the unemployed, and the early-retired) received their allocations or pensions only on a very irregular basis, or have not even been paid at all. As a result, many workers experienced a sharp reduction of income. So workers’ protests take place in a context characterized by the loss of social benefits won under socialism, and also by the difficulties the government encounters in setting up a new social welfare system in a climate of widespread corruption.5 This context is very important for understanding the proliferation and banalization of workers’ mobilization. Indeed, ever since special funds have been granted by the central government to secure pensions and other unemployment allocations, worker protests have become less frequent. Also, as is well known in the field of social movements, there is no automatic link between economic hardship and social mobilization.6 Nonetheless, xiagang SOE workers are not “objectively” the most disadvantaged or the least protected of Chinese social groups. Migrant workers surely face a much harder economic and social situation, but it is rarer to see them protest. We may notice also that among various kinds of xiagang workers, early-retired state workers are most prone to protest. We naturally focus our analysis on this particular group to raise the question of why and how worker protests become possible, and what they reveal about the transformation of the Chinese state. Actual worker protests are indeed quite different from the popular protests that occurred earlier in the history of the People’s Republic of China (PRC). The “novelty” of these worker protests is first due to the fact they do not take place in a situation where the regime is in crisis. The political situation is thus radically different from that which prevailed in the spring of 1989, at the time of major demonstrations. Today there is no perceptible division among the top that maintains a collegial appearance. Nor can worker protests take advantage of a window of opportunity similar to that which opened in 1989 with the death of Hu Yaobang, the

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“disgraced” former general secretary. In China, as in other authoritarian countries, mourning for a great leader opens, briefly, a window for people to express dissent. In 1989, just as at Zhou Enlai’s death in 1976, the population had had time to publicly express its attachment to a great departed leader and, by contrast, to criticize those still in power. Such a window of opportunity associated with mourning was in fact prolonged in 1989 by the perceptible divisions within the leadership as well as by the historic visit by Mikhail Gorbachev.7 This combination of factors enabled the students to build a durable movement that acquired a high profile, both nationally and internationally. We should nonetheless stress that the Chinese government has not lost its repressive capacity toward any social movement that it perceives as a threat to its authority. Anyone in doubt over this matter has only to recall how harshly it cracked down on Falungong, and on certain initiatives of dissident intellectuals. We will thus defend the hypothesis that the relative tolerance of the regime toward state worker protests reveals a new selective opening for a limited expression of contention. This new space for autonomy must be linked to more open access to legal procedures, and the larger use, encouraged today, of the old complaint procedure. This renewed use of the “claim’s right” takes place in a context where the state retreats from direct management of the economy and tries to act as referee in the new social conflicts that are often linked to it. These partial transgressions that are tolerated thus have a certain functionality for the state in its process of recomposition following the shift to a market economy. In turning away from the complaint deposit repertoire, worker protests enlighten the dayto-day evolution of the Chinese political system itself, a very different situation from the immobility so often depicted. As protests by state workers occur at a time of limited political opening, it is interesting to analyze them in terms of interaction, to understand how structural elements can influence forms of mobilization. To do this we reformulate the concept of “political opportunity structure” as developed by Sidney Tarrow.8 In order to avoid too mechanical a conception, Tarrow emphasizes the interaction between different actors and the ways they perceive, reinterpret, and take advantage of political opportunity.9 In our present case, state workers seem to have a clear perception of the implicit rules dictated by the regime for the expression of contention. In order to legitimize their demands, they tend to lean on the laws and repeat publicly their own attachment to the regime, thus avoiding framing their action in an idiom of confrontation. On the other side, the authorities use different strategies to limit protests, trying to confine them within the complaint deposit framework. It is difficult indeed for them to enter into a

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logic of criminalization of state worker movements as they have not yet officially declared the end of socialism. To describe how these original interactions between state workers and the authorities are taking place, I shall first of all show how they fall in line, in some respects, with a legal and everyday activity—the complaint procedure. This repertoire of contention had been formally institutionalized up to the Cultural Revolution and was legalized again at the beginning of the reforms, and finally explicitly encouraged in recent years, concurrently with the development of the Chinese legal system. Following this, I will examine the process of transgression of this “repertoire of action,” emphasizing the original forms that these movements adopted. I will then turn back to the sociological profiles of the demonstrators and the organizational structures of these usually atomized movements, looking into the quite indirect linkages that sometimes unite them. My study is based on several surveys conducted in Northeast China from July 1997 to April 2003. Two types of interviews were carried out: one with authorities in Harbin and Shenyang, and another with workers involved in small-scale protests, done under difficult conditions with worker–claimants in front of local government complaint offices, with follow-up visits to them in their enterprises. During the last few years, I also talked laid-off and retired workers for some of these had endured a number of hardships. Apart from this field research, I also consulted various independent sources on the subject. Since the Chinese official press does not usually make much mention of social strife, most information on conflicts is channeled through a number of newly established parallel information networks. The most important are: The China Labour Bulletin of Han Dongfang, and especially The Information Center for Human Rights and Democratic Movement in China of Lu Siqing, both based in Hong Kong.10 Not many social science articles have been written on workers’ protests since they constitute a new phenomenon, although one may mention high-quality papers by Trini W.Y. Leung, Ching Kwan Lee, Chen Feng, and William Hurst and Kevin O’Brien.11 From a more historical perspective, works by A. Walder and E. Perry are also indisputable references.12

Demonstrations as a Complaint Procedure? The connection between street demonstrations by state-sector workers and the practice of lodging complaints is explicit even if there is some uncertainty in the terms used to designate the movements. Local officials, when interviewed, generally use the term “collective complaint” or “collective

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petition” (jiti shangfang), when they do not use vaguer, more pejorative phrases such as “disorder” (luan) or “unrest” (naoshi). In many respects these demonstrations still fall within administrative procedures adopted by the CCP regime in its earliest days. Such practices have been institutionalized ever since the 1950s, with the setting up of offices for lodging complaints and petitions (xinfang bangongshi and xinfang ke), but their origins go back much further.13 The practice aims at giving people access to an appeals procedure when they perceive a decision affecting them to be unjust. Chinese people have used this tool more or less widely according to the times.14 Sometimes the authorities have used these practices as instruments for controlling how politically compliant the activities of local administrations are, or for checking if new laws and regulations have been properly implemented. To make the process easier, letterboxes were provided where complainants could deposit their complaints. Nowadays, these boxes have been superseded by open hotlines so that people may denounce cases of corruption. These few examples illustrate that lodging complaints is part of the normal functioning of the Chinese communist regime. In no way does the practice challenge the established order, since it is aimed at ensuring that laws are justly applied.15 Workers in state enterprises are not, in any case, the only people to use this procedure; it is widely used by workers in the special economic zones,16 as well as by country people for tax and land problems,17 and by townspeople in cases of expropriation or house purchases.18 We should note, too, that in recent years a new procedure of legal arbitration has been juxtaposed with the earlier administrative one.19 The workers of any particular state enterprise who take to the street in any numbers are therefore acting within the complaint-lodging repertoire of contention. This is so, first of all, because such demonstrations bring together only those suffering precisely the same injustice—groups of workers all belonging to the same state enterprise. And second, because the demonstrators, like complainants, blame the managing authorities of their enterprise for failing to provide the contractual social benefits to which there are entitled, such as xiagang and unemployment allocations or pensions; they sometimes connect their complaints to corruption. Claims are generally focused on payments—whether for pensions or allocations— that have remained unpaid. The demonstrators deliver a petition to the authorities asking them politely to intercede on their behalf with the management of the enterprise to bring these irregularities to an end. After all, they are demanding nothing more than the exercise of something they, along with the authorities, consider to be an established right. And, when demonstrators condemn the leaders of their enterprise for corruption, they do so to expose irregularities in the process of transferring ownership or in

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the procedure for closing down a failing enterprise.20 By asking for the law to be justly applied, not only are demonstrators wholly complying with the official discourse of the day about the struggle against corruption, but they are also conforming with the logic of the formal filing of a complaint. In other words, their claims remain centered on quite specific infractions of the law, and stay within the context of the enterprise. Seen from this angle the demonstrators are taking on the role of complainants, limiting themselves to pointing out how a regulation is being badly implemented. While today’s workers’ demonstrations are a totally new phenomenon since 1949, they widely use the existing repertoire of contention.21 Such an extensive reuse of the complaint procedure probably owes much to the fact that workers are cobbling together existing repertoires of protest, if not even more to the fact that their creative faculties are now being stimulated by the narrowness of their actual margin for maneuver.

The Transition to Demonstrations: The Weight of Numbers Yet, by playing on the weight of their numbers and on their ever longer and ever more organized physical presence in public places, these movements are actually moving outside the complaint-lodging field of activity. Such workers turn out by the dozen, sometimes in the hundreds, in front of the city hall, chanting slogans, carrying banners, and blocking the main entrance to the building. On a given day there are three hundred, perhaps four hundred, who are demanding their pensions. As with many other retirees and early retired from the same city, the payment of their pension benefits has been delayed. They claim that they have not received anything for the past eight months. And therefore, today they have taken the decision to protest in front of the city council and ask for an explanation. Nowadays this type of event is quite common: during my stays in Shenyang, such street protests happened on a more-than-daily basis. In order to monitor such a banal street protest the Shenyang authorities tried initially to channel the rioters toward the complaint office. A few civil servants, who appeared on the street at the same time as the rioters, gently tried to guide them there. Of course, mediators will hardly criticize the validity of the protesters’ action, nor will they point out that they are gathering illegally in a public area. On the contrary, they listen to the workers’ stories, sympathize with them, and explain their options.22 That particular day the retirees are stubborn, they ask for an immediate appointment with the mayor. The mediators, as the personnel in charge of

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the city hall, hesitate, then attempt a diversion by saying that a delegation could be received the next day but that today the person in charge of the pension funds is absent. The rioters refuse. They have waited long enough. They demand an appointment this very day, and make it clear that they will not budge from the entrance of the city hall otherwise. The authorities will not have any of this. That is when people start to get angry, rioters who up to then were quite calm start shouting slogans: “We want our pensions! We want our pensions!” At the same time the police start to intensify pressure; plainclothes policemen with cameras appear on the scene, others set the rioters apart while preventing passers-by from stopping, and finally a hundred or so policemen in uniform take position around the city hall. However, near the police barrier next to the town hall entrance, discussions with the rioters continue. Soon they actually obtain the much hoped-for appointment with a municipal official. While fifteen or so retirees enter the building, the chanting of slogans gets stronger. However, this appointment leads to nothing more than a few vague promises and just before midday the street riot is dispersed without any violence. As the security forces go back to their quarters singing a patriotic tune, a few groups of rioters seethe and share their anger with passers-by. They vow to return soon. In refusing to leave the entrance to the local government building, the rioters also relinquished the “petition deposit” repertoire to enter into a struggle with the authorities. They are inventing the “manif,” on the pattern developed in nineteenth-century France and as described by Michel Offerlé.23 Through this collective dimension, the demonstrators attempt to exert pressure and force the authorities into a trial of strength. They are no longer simply presenting their grievances to those in charge, but publicizing them. In the context of a democratic system, social movements tend to capitalize on the impact of their mobilization, either through the media or at the polls. In the Chinese context, the transition to street demonstrations has no media impact. The rare article dealing with workers’ demonstrations generally appears well after the event, once the conflict has been resolved. In the absence of any “sounding box” at the national level, demonstrators have begun wishing, on a very few occasions, to make the issues about which they are campaigning known at an international level. At Daqing, for example, right from the earliest days of the struggle, at the time of the big demonstrations of 2002, some demonstrators attempted to block a train connecting Moscow with Beijing, hoping to attract the attention of the foreign passengers on board.24 Quite regularly too, the HongKong-based union dissident Han Dongfang receives phone calls informing him of the situation in such and such an enterprise in China.25 It is the same with some foreign journalists based in Beijing. For the present,

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however, such actions are still rare, bearing in mind the numbers of such movements.26 It is true that they are risky and often rebound on those who attempt them. At Daqing and at Liaoyang, the contacts that were made with dissident organizations or the international press were added to the list of accusations facing the movement’s leaders. Since then, with no media coverage, the only way left for the demonstrators to force the local authorities into trials of strength is by making full use of their “nuisance value.” By this means, such movements attempt to acquire political visibility and, through it, hope to force the authorities into taking their claims into consideration. They think that by “creating a problem,” they will break the local understanding between the bosses of the enterprise and the political authorities to “manage” as quietly as possible the social crises arising from the privatization or collapse of state enterprises. Whether by gathering in front of the authorities’ headquarters, or by blocking an important highway, or a railway, the demonstrators seek to break the silence blanketing their campaign. The protestors verbalize this strategy as “disorder.”27 Thereafter, even while they continue to address themselves to the local political authorities, their goal in making use of their nuisance value is really to catch the attention of the higher authorities. In this sense, they are playing—as with the filing of a formal complaint—on the diversity of those who make up the Chinese state, a practice that is not new, as Laura Luehrmann points out: “During the period immediately following the 1959–1961 Great Leap Forward famine, many complainants bypassed locals bureaus, even dramatically presenting their pleas written in blood (xueshu) to central authorities.”28 For their part, the authorities do not immediately outlaw the demonstrations. On the contrary, the local authorities try their best to keep them within the existing structures for filing complaints thus preventing worker complaints from having an echo outside their fiefdom. City governments in the Northeast have thus moved their complaint bureaus closer to the seats of power (city halls or provincial government buildings). Several officials hastily come out in the role of mediators to greet any group of complainants, escorting them peacefully to their offices. In so doing they are attempting to keep this new kind of protest within legal bounds. In some cases, they have also used intimidation to prevent groups of workers from going directly up to Beijing or to the provincial capital to raise their cases. As is pointed out in a recent article by Kevin O’Brien and Lianjiang Li, this is where we reach the limits of the concept of “political opportunity structure,” which oversimplifies the characteristics of the state in its relations with social movements.29 Demonstrators in China do not find themselves in a relationship with the state as a unique entity; they come up

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against a plurality of state actors some of whom may make ad hoc alliances with them. In his article, centered on the countryside, O’Brien shows how the lodging of complaints offers the provincial or central authorities a means of control over the local administration. Even though this same interplay exists between the different levels of state power, the cases of workers’ demonstrations are structured in rather a different way. The state is concerned not with ensuring the proper implementation of a law, but with containing any threat to social stability. By taking to the streets, the workers are indirectly drawing attention to the local authorities’ failure to manage the transition without any trouble. The local authorities thus find themselves obliged to find a quick method of calming things down, by referring upward to higher levels in the hierarchy.30 As we know, the idea of social stability (shehui wending) is a very sensitive one in China, and particularly when it comes to workers’ disputes. The Chinese government becomes panic-stricken at the prospect of an autonomous and organized workers’ movement analogous to the Polish Solidarity. This is why the impact of these small street demonstrations is quite often great enough for the demonstrators to win, if not their case, at least some small compensation to improve their everyday life. Such little misdemeanors—the street demonstrations—accompanying the normal procedure for filing complaints, in fact have a big political impact. The relative haste with which the authorities are prepared to compromise with the demonstrators clearly encourages the development of this type of campaign. Even so, demonstrations still fall within the repertoire of filing complaints. As we have said, in addition to their aim of attracting higher authorities’ attention to a misapplication of the law, the complainants do not generally employ “extreme” tactics from the start. They usually resort to them only after having tried to make their case through the normal administrative or legal procedures.31 The demonstration is thus understood, in most of the cases I study, to be a procedure of last resort. If most of the complainants transform themselves into demonstrators only after the institutionalized procedure has failed, it may be analyzed as a way not to break, but to strike a deal within the system, as an attempt to exert pressure in order to make the system work better.

New Ideological Approaches for Legalizing Illegality Even though these demonstrations, restricted to employees of the same enterprise and limited in their claims, are not outlawed at once, the fact of

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taking to the streets is still understood by the demonstrators as a challenge to the established order. They clearly perceive the risks incurred when they widen the complaint-filing repertory, so they attempt to justify their action by the urgency of the situation, while putting their claim into the language of socialism. Socialist discourse is admittedly also present in the context of lodging complaints, but the bureaucratic character of this approach is better suited to a more legalist and argumentative expression of grievances.32 During demonstrations the workers’ appeals unmistakably bring to bear the ideological arsenal of socialism.33 They dress their claims up in terms such as “working class,” “proletariat,” “socialism”—to the point that their slogans, such as “Long life to the working class!” or “No to capitalism, yes to socialism!” convey at times a whiff of the Cultural Revolution.34 When the demonstrators proclaim their loyalty to socialist values they are expiating the illegal act of taking to the streets. And one finds that a broadly similar strategy was adopted by the student demonstrators of 1989, as a pre-emptive measure to forestall any labeling of the movement as “counterrevolutionary.”35 It is also true that by quoting back at the authorities the discourse that after twenty years of economic reforms is still the official ideology the demonstrators are exposing its contradictions. They succeed all the more skillfully in turning the Party discourse in their own favor because, for them, it still has some reality. Historically, workers in the state sector used to have a special status. They were made to believe that they were the avant-garde of socialism, and that they collectively owned the enterprises where they worked. In “struggling against capitalism,” they are demanding that a whole world, with all the norms and standards to which they had become accustomed, should be preserved: they want to hold on to the “socialist” way of managing social relationships. That world, now passing into history, was paternalistic; it tied workers to their production units for life, but, in exchange, it guaranteed them a job with certain material advantages. This type of organization still has meaning for workers, even now that they have lost their jobs and have barely enough to live on. In this sense, it is possible to draw a parallel with the concept of moral economy. James Scott defines this term as a precapitalist and agrarian form of organization in which the landowners swap a little of their wealth for some social recognition.36 Even if the Chinese workers go beyond Scott’s subtle forms of protest, in the case of urban China, workers’ demonstrations are, like Scott’s agrarian revolts, a reaction aimed at restoring an old order that has probably disappeared forever. One can imagine the authorities’ condescending attitude to these workers, the last to dream of a socialist paradise. So, the use to which the workers are putting the socialist discourse is not merely instrumental.

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In consequence, it is not surprising that their discourse should also refer to that now lost role they once played in Chinese society. That was the case, for example, during a demonstration in front of the Harbin city hall where a group of retired people waved a placard saying, “I’ve given my youth to the Party. Today I’m old—but the Party doesn’t even give me any leftovers. I’ve asked my children for money, but they’re all out of work.”37 More generally, many retired people feel nostalgia for the Mao era, when the city was prosperous. A former employee of a pharmaceutical factory in Shenyang says, “The reforms have done nothing but destroy the city’s enterprises. Before, we were rich; now we’re just about scraping a living.” These former heroes of socialism are bitter. They think the government has deceived them, and that it no longer respects its workers or retired people. The urgency of the workers’ plight also serves to justify their resort to demonstrations and their short-circuiting of the official channels for complaint. We are obviously not suggesting that this urgency might be faked, but that it is put forward as a justification for demonstrating. This urgency makes it easier for working-class mobilization to have a kind of legitimacy. The revolts are presented as founded on despair, which implies that they are spontaneous, angry outbursts, with no ulterior political motives. In proclaiming their poverty, demonstrators are not defying authority; they are merely expressing the fact that they are hungry. Faced with such a demand, of course, the authorities are embarrassed. Chen Feng reports a comment from a Chinese union leader that amply reveals the dilemma in which they find themselves: “If they repress these demonstrations, the government would appear indifferent to the condition of the working class and would create even more resentment among the workers.”38 By playing on the official ideology, the urgency of the situation, and the lack of formal organization of their movements, the workers have not only managed to have small-scale protest tolerated by a system hostile to mobilizations it does not itself control, but sometimes they also succeed in forcing the authorities into negotiations, and even win a few concessions. Confronted by this kind of workers’ demonstration, the authorities find themselves trapped.

Features of the Groups Mobilized: Retired People Out in Strength Besides the repertoire used by the workers to express their claims, it is interesting to analyze the sociological profile of those who are mobilized. Several researchers have pointed out the high proportion of retired people

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in these movements, but there is no doubt that O’Brien and Hurst were the first to throw a clear light on this primary characteristic.39 They focused their analysis on what motivates retired people to demonstrate, advancing two significant factors. The first relates to the symbolic importance of breaking a pension agreement, while the second is based on the pattern of existence open to this fringe group within the urban population. Here, I discuss both these elements, following them up and then bringing them within my chosen perspective. Basing their study on interviews with unemployed and retired people, O’Brien and Hurst show the importance of how their interviewees perceive their pension agreements. For a number of them, any breaking of this contract legitimizes, or could legitimize, their taking to the streets to preserve their pension rights. It is true that for those involved, and for a considerable proportion of the urban population, nonpayment of pensions is perceived not just as illegal, but also as immoral. Urban dwellers’ sympathy with retired people’s demonstrations is manifest. Whereas there are employed people who would agree with the authorities about the necessity for unemployed people to seek a new job, the battle of retired people is seen as a just cause. Even several heads of enterprises, during interviews conducted in the Northeast, told me firmly that paying out pensions was for them a priority, ahead of paying wages as a whole or paying taxes. It is of no consequence here whether such declarations of intent were actually put into practice. The city authorities in Shenyang, being very aware of the problem, have created jobs for retired people so as to provide them with a small income. It must be said that demonstrations by retired people are a daily event in that city. Thanks to this wide public support, retired people’s claims are not perceived as aimed at maintaining a few ancient corporatist privileges, but as just and morally right. Workers’ complaints have slipped into the field of social morality, and this is also noticeable with the demonstrations against corruption. These last are attended by people of more diversified social backgrounds, even though retired people still play a central role in them. Another very interesting argument advanced by O’Brien and Hurst relates to the lifestyle of the militants. Based on the work of Doug McAdam in particular, the argument starts from the following premises: (1) Demonstrating takes time, and (2) those with some practical experience of demonstrations are more ready to do it again. In the Chinese context, it is the younger pensioners who combine both these characteristics. They have the time, and also the experience of workers’ militancy that they acquired during the Cultural Revolution.40 Unemployed people, being younger, and having family responsibilities, cannot gamble on the unpredictable results of mobilization, which, moreover, in the Chinese context is still a high-risk

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activity. To survive, they have no other choice but to find an income, being sometimes forced to migrate. The young retired people and the early-retired, as well as having time and some experience of demonstrating, also enjoy political near-immunity by reason of their age, and because they embody, more than anyone else, the “reality” of the building of socialism. Knowing that the authorities are uneasy about cracking down on this former avant-garde, which is still carrying the banners of socialism, it is easier for them to go out on demonstrations. It is hardly surprising then that, even in the largest demonstrations, there is always a strong contingent of retired people playing a leading role in the movements and their organization. Thus, the presence or the use of retired people takes on a strategic dimension. As with the huge demonstrations in Liaoyang, most of the leaders arrested were retired or nearing retirement. At Daqing, after the arrest of workers’ representatives, the responsibility for handing over a petition demanding their release fell to a pensioner in a wheelchair. In the course of such demonstrations old women play a dynamic role, chanting the most radical slogans or dramatizing their plight by appealing on their knees to the authorities. In addition to this strategic use of retired people for their immunity to criticism, the demonstrators bring out the old and infirm to advertise the immoral attitudes of the authorities. In other words, it is the rank and file who put themselves forward in these demonstrations, reminding people that they are acting, not in the field of political opposition, but simply in that of complaint. Those in power find themselves almost obliged to respond paternalistically to their demands, while controlling and preventing the development of autonomous organizations.

Movements without Leaders? Workers in the state sector are not favorably placed for organizing their own movements. Even if the role of the official trade unions is changing a bit, at present it usually does not provide adequate communication channels for workers’ demands.41 Admittedly, this has not always been the case: at the start of the reforms, in particular, after the unions were reinstated during the 1980s, they were more outspoken in their criticism and their protests, demanding greater autonomy from the Party.42 In addition, during the 1989 upheavals certain sections of the union movement also rallied to the students’ cause, but they have since then been brought back into line. Today, the unions only rarely support demands made by state workers.43

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Being unable to protest through official channels, a few workers in Shenyang have tried to develop new organizational structures. As the crisis deepened within state enterprises, these new organizations took the form of informal workers’ networks of mutual aid. Their stated objectives were minimalist, since their only aim was to collect donations to help out the most impoverished families. To make sure that no Polish-style situation could develop, the official union took care to take control of these self-help networks and to carry out tasks they themselves sanctioned. Today, the central authorities will not allow any autonomous organization to develop in any sector, and most particularly not in the trade union field. They will crush any attempt at forming an autonomous union. The workers, being unable to rely on existing organizational structures, or to form new ones, have very narrow margins for maneuver in organizing their movements. That being so, even though the demonstrations are widely tolerated, they have not led to new organizational structures, such as autonomous unions. Today it must be acknowledged that the people in power have succeeded in confining protest to informal networks within enterprises. To be tolerated at all, a workers’ movement must appear to be spontaneous and limited to a single enterprise. With no visible organization or leadership, it thus falls within that margin for maneuver that the Party today leaves open to state workers. Of course, such an appearance of spontaneity does not in itself explain how demonstrations come about, since any social movement, in order to exist at all, must have a certain level of organization, social network, and collective identity.44 Once these movements grow to any size, however the Chinese government seeks out and arrests “leaders.” Is that proof that these movements are better organized than they seem? Cai Yongshun, basing himself on a field study, takes the view that the leaders of these movements are generally minor officials who put their skills at the service of such movements.45 I would rather support the idea that these movements are still barely organized at all, and that they mainly rely on the significant networks that unite members of a single plant, as well as on their strong group identity. This is all the more likely since today’s demonstrators are able to call upon the skills offered by the new legal advice centers, usually largely independent, or upon the skills of the few lawyers involved in labor issues. It is true that all across China you now find such centers in almost all provincial capitals, often opened by law school professors sponsored by their university employer and the local authorities. Wuhan University has thus established a Center for Protection of the Rights of Disadvantaged Citizens. Due to the presence of volunteers and the financial support of some foreign

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governmental cooperation agency or NGO involved in human rights programs in China,46 access to these centers is usually almost free. They are, of course, not directly involved in any worker protests but do sometimes help workers to formulate their grievances while informing them of their rights. Also through meetings held both inside China and abroad, the main animators of these centers, often sponsored by the same foreign organization or agency, get to know each other and have the opportunity to share their experiences among themselves. I’m not saying that they add up to a new kind of dissident network; they are all acting in the strictest legality, but they are symptomatic of the political transformation that is affecting the Chinese regime from below. In the absence of leaders or sophisticated formal organization within these movements, what is more important is the strength of the group identity that has been able to develop inside the confined locations of the Chinese work unit (danwei). It is known that in China the role of the SOE was not (and still is not) limited to an individual’s type of work. Group identity was the basic politico-social structure to be found in urban life, and it still performs a vital function in the cities. Work units or danwei, by regrouping in a single location both workshops and living quarters, divided the city’s workforce into a great number of largely autonomous cells, thus contributing to a fragmentation of their social life. Today, this subdivision of urban areas has consequences on the structure of dissent. It may well contribute to fragmenting it, but paradoxically, it also favors its emergence.47 The networks built within a danwei cut across the various social strata represented within it, because they are founded not only upon the horizontal solidarities forged on the shop floor but also upon loyalties associated with family, generation, or patronage. People get married within their danwei, while the individuals in each age group once sat on the same school benches before their paths diverged. Without forgetting the very real oppositions that may exist between management and employees, we should also stress the vertical networks cutting across hierarchical structures. The existence of such vertical networks means that information travels very quickly: in such a place, nothing is really secret. In the case of many demonstrations, it has been noted that the workers or retired people were reacting to a piece of information that had reached them. In several cases the spark had been ignited by the contents of a handwritten anonymous poster denouncing some particular maneuver by the management. In addition there have been demonstrations in response to concessions offered by the authorities themselves. Thus, shortly before the 1999 National Day, an article in the Shenyang newspaper announcing a special payment for the city’s unemployed and retired people triggered several demonstrations.

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The function of social networks cutting across the danwei also helps us to understand the central role played by retired people in these mobilizations. Indeed, at the present time, with the danwei rapidly decomposing as economic and social organisms, the retired people act in some way as their lifeblood. For young people forced into seeking redeployment outside its walls, the danwei has gradually lost its meaning. Things are different for those retired or forced into early retirement, who still spend most of their time drinking tea in the factory yard and chewing over their grievances. The danwei, their own danwei, had been and still is their whole life. Whereas in most countries of the world unemployed and retired people quickly lose contact with their workplaces and cannot use this type of network for mobilization, things in China are very different. Workers continue to live on the factory grounds, and unemployment or retirement has virtually no consequence on their social roots. For those without work, the danwei remains a space for living and socializing. They do not need to form new networks to organize demonstrations. The structure of the danwei thus explains how demonstrations have arisen in a political context where any autonomous organization is strictly forbidden. This is true at least in the relatively large and formerly well-organized danwei. In many smaller enterprises, the community does not have that much of a chance to survive for long after the collapse.48 We know that in any social movement someone must make the decision to write a petition, and someone must organize the gathering of signatures. These are not in any case illegal activities. Yet, to do these things, workers in state enterprises may apply to these new legal advice centers that are springing up in many large Chinese cities, even though the workers themselves still clearly retain the initiative. In other words, workers can rely on these new outside resources to draw up their list of complaints, help them compose letters, and organize their arguments. Thanks to the existence of these centers, the movements do not have to draw on their own resources for legal and procedural skills.

Conclusion Apart from describing the mechanisms of mobilization and the form taken by these movements (operating within a restricted space that prevents them from challenging the regime’s authority or even its political thinking), how may we explain how state workers have come to this form of action? Before their “political” awakening, they were not unresponsive to change. By dint of their own resourcefulness and a few fiddles, they were developing

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redeployment strategies to bring in extra income. But, with the coming of “privatization” among state enterprises, constraints, controls, and redundancies were inflicted upon state employees, putting an end to their humble strategy for coping with the transition. Up until then, they had been relatively spared; now they have to confront a situation that is socially very difficult. However, the harshness of their plight cannot by itself account for their mobilizations. They are part of a wider context, the transformation of governance itself. The workers mobilize thanks to their widening access to legal procedures and possibilities. The complaint procedures, however inefficient, illustrate the willingness of the Chinese government to find new solutions to social conflict. Accordingly, the state’s relatively tolerant approach to these demonstrations indicates that it intends to invent a new and central role for itself, that of arbitrator in the struggles of a society in transition. The fact remains that this change has not been matched by the development of organizations sufficiently structured and autonomous to transmit social demands. The state, for security reasons, has to cope with social conflict without the benefit of institutional mediation. It is still left trying to manage the relations between the government and the people on an individualized basis. When it comes to the workers’ struggles, this approach leads to the proliferation of demonstrations, since no structure is in place to communicate people’s most basic demands. The authorities are constantly being taken by surprise. They intervene as each emergency arises, which amounts, in the end, to nothing better than a system of crisis management.

Notes 1. Sixty thousand demonstrations in 1998, 100,000 in 1999, 137,000 in 2000, 135,000 in 2001. The figures given here appeared in the Far Eastern Economic Review, September 6, 2001. The South China Morning Post claims that there were 207,605 workers’ demonstrations in 2000, of which 135,000 were officially registered, South China Morning Post, October 3, 2001. For more information, see the websites of the China Labour Bulletin (iso.china-labour.org. hk/iso/) or Lu Siqing at the Information Centre for Human Rights and Democratic Movement in China website (http://www.89-64.com/english/ indexen.html. 2. Yongshun Cai in chapter nine of this volume. 3. Mary E. Gallagher in chapter six of this volume. 4. Kun-chin Lin in chapter three of this volume.

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5. Antoine Kernen and Jean-Louis Rocca, “La réforme des entreprises publiques en Chine et sa gestion sociale: le cas de Shenyang et du Liaoning,” Les Etudes du CERI, no. 37 (January 1998), p. 35; or Antoine Kernen and J.-L. Rocca, “The Social Responses to Unemployment and the ‘New Urban Poor,’ ” China Perspectives, no. 27 (January/February 2000), pp. 35–51. 6. On this subject I answer critiques solicited by Ted Robert Gurr on the social frustration of many social movement theorists. Ted Robert Gurr, Why Men Rebel (Princeton: Princeton University Press, 1970). 7. Gorbachev’s visit marked the reconciliation between China and Russia after thirty years of latent hostility. 8. Sidney Tarrow, Power in Movement (Cambridge: Cambridge University Press, 1994). 9. Doug McAdam, Sidney Tarrow, and Charles Tilly, Dynamics of Contention (Cambridge: Cambridge University Press, 2001). 10. www.china-labour.org.hk/, also www.chinalaborwatch.org/, www.asian labour.org/, and www.89-64.com/english/indexen.html. 11. Trini W.Y. Leung, “Labour Fights for its Rights: Labour Unrest in China in the 1990s,” China Perspectives, no. 19 (September/October 1998), pp. 6–24; “The Third Wave of the Chinese Labour Movement in the Post-Mao Era,” China Labour Bulletin (June 2, 2002), www.hartford-hwp.com/archives/ 55/297.html. Ching Kwan Lee, “The ‘Revenge of History’: Collective Memories and Labor Protest in North-Eastern China,” Ethnography, 1: 2 (2000), pp. 217–237; C.K. Lee, “From the Specter of Mao to the Spirit of the Law: Labor Insurgency in China,” Theory and Society, 31 (2002), pp. 189– 228; “Pathways of Labor Insurgency,” in Elizabeth Perry and Mark Selden (eds), Chinese Society: Change, Conflict and Resistance (London: Routledge, 2000); Feng Chen, “Subsistence Crises, Managerial Corruption and Labour Protest in China,” The China Journal (July 2000), pp. 41–63. “Between the State and Labour: The Conflict of Chinese Trade Unions’ Double Identity in Market Reform,” The China Quarterly, no. 176 (December 2003), pp. 1006– 1028. William Hurst and Kevin O’Brien, “China’s Contentious Pensioners,” The China Quarterly, no. 170 (2002), pp. 345–360. 12. Andrew Walder and Gong Xiaoxia, “Workers in the Tiananmen Protest: The Politics of the Beijing Workers’ Autonomous Federation,” The Australian Journal of Chinese Affairs, no. 29 (January 1993), pp. 1–29; A.G. Walder, Communist Neo-traditionalism: Work and Authority in Chinese Industry (Berkeley: University of California Press, 1986); and E. Perry, Shanghai on Strike: the Politics of Chinese Labor (Stanford: Stanford University Press, 1993); or Challenging The Mandate of Heaven: Social Protest and State Power in China (Armonk, New York: M. E. Sharpe, 2002). 13. Lucien Bianco, Peasant Without the Party: Grass-roots Movements in the Twentieth-Century China (Armonk, New York: M. E. Sharpe, 2001); Perry, Challenging The Mandate of Heaven. 14. On this subject, see Laura Luehrmann, “Facing Citizen Complaints in China, 1951–1996,” Asian Survey, 18: 5 (September/October 2003), pp. 845–866.

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15. On the theme of filing complaints, Isabelle Thireau and Hua Linshan, “One Law, Two Interpretations: Mobilizing the Labor Law in Arbitration Committees and in Letters and Visits Offices,” in Neil J. Diamant, Stanley B. Lumban, and Kevin J. O’Brien (eds), Engaging the Law in China: State, Society, and Possibilities for Justice (Stanford: Stanford University Press, 2005), pp.84–107; or Kevin J. O’Brien and Lianjiang Li, “Popular Contention and its impact in Rural China” Comparative Political Studies 38: 3 (April 2005), pp. 235–259. 16. Thireau and Hua, “One Law, Two Interpretations.” 17. Kevin O’Brien and Li Lianjiang “The Politics of Lodging Complaints in Rural China,” The China Quarterly, no. 143 (September 1995), pp. 465–489; Kevin O’Brien, “Collective Action in the Chinese Countryside,” The China Journal, no. 48 (2002), pp. 139–154. 18. South China Morning Post, May 3, 2003. 19. Thireau and Hua, “One Law, Two Interpretations.” 20. Antoine Kernen, Vers une économie socialiste de marché? Le processus de privatisation à Shenyang (Paris: Karthala, 2004). 21. Charles Tilly, La France conteste de 1600 à nos jours (Paris: Fayard, 1986). 22. Investigation in Harbin and Shenyang. 23. Michel Offerlé, “Descendre dans la rue: de la ‘journée’ à la ‘manif,’ ” in P. Favre (ed.), La manifestation (Paris: Presse de la fondation des sciences politiques, 1990), pp. 90–122. 24. See, e.g., the report by the NGO Human Rights Watch, “Paying the Price: Worker Unrest in Northeast China,” 14: 6 (July 2002). Available online on the web at: www.hrw.org/reports/2002/chinalbr02/. 25. Han Dongfang and The China Labour Bulletin publish detailed information on different protests that occur in China. The annual statistic or estimation of the number of protests that occur in China usually comes from the official Chinese unions. 26. We have direct or indirect information on only a very few cases based on the annual number of protests coming from the official police account. 27. Cai Yungshun, “The Resistance of Chinese Laid-off Workers in the Reform Period,” The China Quarterly, no. 170 (June 2002), pp. 327–344. 28. Luehrmann, “Facing Citizen Complaints in China,” p. 852. 29. Kevin O’Brien and Lianjiang Li, “Suing the Local State: Administrative Litigation in Rural China,” China Journal, 51 (January 2004), pp. 75–96. 30. And it happens that, in their turn, the local authorities make use of the risk of instability to win subsidies from the central government. 31. On this subject, see, e.g., the report by Human Rights Watch, “Paying the Price.” 32. Thireau and Hua, “One Law, Two Interpretations.” 33 On this topic, see Ching Kwan Lee, “The ‘Revenge of History’: Collective Memories and Labor Protest in North-Eastern China,” Ethnography 1: 2 (2000), pp. 217–237, or Ching Kwan Lee. “Pathways of Labor Insurgency,” in Elizabeth Perry and Mark Selden (ed.), Chinese Society, Change, Conflict and Resistance (London, New York: Routledge, 2000), pp. 41–61.

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34. FBIS-CHI-94–108, 19 (June 6, 1994); Zheng Ming, no. 200 (June 1, 1994). 35. J. Zuo and R.D. Benford, “Mobilization Process and the 1989 Chinese Democracy Movement,” Sociological Quarterly, no. 36 (January 1995), pp. 131–156. 36. James Scott, Weapons of the Weak: Everyday Forms of Peasant Resistance (New Haven: Yale University Press, 1985). 37. Interview, Harbin, October 2001. 38. Feng Chen, “Subsistence Crises, Managerial Corruption and Labour Protest in China.” 39. William Hurst and Kevin O’Brien, “China’s Contentious Pensioners,” The China Quarterly, no. 170 (June 2002), pp. 345–360. 40. E. Perry and Li Xun, Proletarian Power: Shanghai in the Cultural Revolution (Boulder: Westview Press, 1997). 41. On this topic, see Feng Chen, “Between the State and Labour: The Conflict of Chinese Trade Unions’ Double Identity in Market Reform.” 42. Elizabeth Perry, “Labor’s Battle for Political Space: The Role of the Worker Association in Contemporary China,” in D.S. Davis et al. (eds), Urban Spaces in Contemporary China: The Potential for Autonomy and Community in PostMao China (Cambridge: Cambridge University Press, 1995), pp. 302–325. 43. Compare interview made by Han Dongfang. 44. C. Tilly, La France conteste de 1600 à nos jours (Paris: Fayard, 1986); From Mobilization to Revolution (Harvard: Harvard University Press, 1976). 45. Cai Yungshun, “The Resistance of Chinese Laid-off Workers in the Reform Period,” The China Quarterly, no. 170 (June 2002), pp. 327–344. 46. Many of these human rights dialogues are merely a way to put human rights under the carpet of bilateral relationships, but I am particularly impressed by the work done by the three Scandinavian countries in this field. 47. Ching Kwan Lee, “Pathways of Labor Insurgency.” 48. Thanks to D. Solinger who made me aware of this point.

Contributors

Stephen W.K. Chiu got his doctorate from Princeton University and is currently professor of sociology, Chinese University of Hong Kong. His numerous publications include two coauthored books, East Asia and the World Economy (Sage 1995) and City-States in the Global Economy: The Industrial Restructuring of Hong Kong and Singapore (Westview 1997). His latest work is a coauthored book titled Hong Kong: The Global City (Routledge 2008). Mary E. Gallagher is assistant professor of political science at the University of Michigan. She received her PhD from Princeton University. Her first book, Contagious Capitalism: Globalization and the Politics of Labor in China was published in 2005 by Princeton University Press. She was a 2003–2004 Fulbright research scholar at the East China University of Politics and Law in Shanghai, conducting research on the project “The Rule of Law in China: If They Build it, Who Will Come?” examining factors that influence the legal mobilization of Chinese workers. Thomas B. Gold is a member of the Sociology Department at the University of California, Berkeley. He has published widely on topics such as the revival of urban private business in China, guanxi, youth in China, civil society in China, and Taiwan’s political economy. He is investigating the role of international NGOs in the environmental protection and microfinance fields in China. Eva P.W. Hung is assistant professor of sociology at the University of Macau. She received her PhD from the Contemporary China Centre of the Australian National University. Her research interest is mainly about statesociety relations in China, in particular focusing on the workers and professionals. She has published articles in Modern China and Communist and Post-Communist Studies. William J. Hurst is assistant professor of political science at the University of Texas, Austin. Prior to that, he was a fellow at the Center for Chinese Studies, University of Oxford. His research focuses on laid-off workers in

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urban China. He is the author of The Chinese Worker after Socialism (Cambridge University Press, 2009). Jaeyoun Won is assistant professor of sociology at Yonsei University, Seoul, Korea. Prior to that, he was an APDR postdoctoral fellow at the Institute of Asian Research at the University of British Columbia. His research focuses on labor and citizenship in East Asia, particularly post-socialist transformation in China and North Korea. Antoine Kernen is assistant professor of sociology at the Graduate Institute of Development Studies in Geneva. His research interests include social conflicts, labor issues, and welfare policies in China. He is the author of The Privatisation Process in Shenyang: The Transformation of a Chinese Metropolis during the Reforms published in French as La Chine vers l’ économie de marché: les prvivatizations à Shenyang (Paris: Karthala 2004). Kun-Chin Lin is assistant professor of political science at the National University of Singapore. Prior to that he was research fellow at the Contemporary Chinese Studies Programme, University of Oxford. He received his PhD in political science at the University of California, Berkeley. Lei Guang is associate professor of political science at San Diego State University. His recent articles on Chinese labor and migration have appeared in journals China Quarterly, International Migration Review, Politics & Society, Critical Asian Studies, and in edited volumes Working in China: Ethnographies of Labor and Workplace Transformation (Routledge 2006) and Rethinking the Rural-Urban Cleavage in Contemporary China (Harvard University Press 2008). Li Peilin is deputy director and senior researcher at the Institute of Sociology, Chinese Academy of Social Sciences. He received his PhD from the Sorbonne in Paris. His numerous publications include two books on the reform of state enterprises in China, and he has participated in numerous large-scale surveys of different aspects of Chinese urban and rural society. Li Qiang is professor of sociology and dean of the School of Humanities at Tsinghua University, Beijing. He was founding chair of the Sociology Department at Tsinghua after teaching many years at Renmin (People’s) University. He has published widely on issues of stratification and class in urban China. He taught one semester at Duke University. Dorothy J. Solinger is professor of political science at the University of California, Irvine. Her 1999 book Contesting Citizenship in Urban China (University of California Press) won the 2001 Joseph R. Levenson prize of

Contributors

247

the Association for Asian Studies for the best book on twentieth-century China. Her research focuses on political economy, industrial policy, and social problems resulting from the market transition. Her most recent work is Global Liaisons and Labor’s Losses: States, Workers and Supranationals in China, France and Mexico (Cornell University Press, forthcoming). She has held numerous visiting fellow positions, most recently at the East Asian Institute at the National University of Singapore (Fall 2008), and is adjunct senior research scholar at the Weatherhead East Asian Institute at Columbia University. Yongshun Cai is assistant professor in the Department of Political Science, Hong Kong University of Science and Technology. His current research focuses on state-labor relations in China and China’s legal institution building. He is the author of State and Laid-Off Workers in China: The Silence and Collective Action of the Retrenched (Routledge, 2007). He received his PhD from Stanford. Zhang Yi is associate professor in the Institute of Population and Labor Economy of the Chinese Academy of Social Sciences.

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Index

“adjustment fee,” 45 All-China Federation of Trade Unions (ACFTU), 57, 145 Anhui, 21 Anshan Steel Mill, 191, 193 banks, 48, 49, 52, 53, 221 basic livelihood allowance, 45, see also welfare guarantees, 27, 47 Beijing, 23, 24, 30, 44, 45, 48, 57, 63, 66, 68, 69, 70, 75, 77, 78, 79, 81, 95, 97, 104, 106, 113, 121, 187, 200, 205, 210, 211, 231, 232 Benxi, 121, 122–3, 127, 166, 191 biaoxian, 120 bingtuan, see army farm under soldiers Blau, Peter, 163 Blecher, Marc, 8, 82, 188, 200, 205 Bo Yibo, 164 British Columbia, 126 Brooklyn, 118 Bureau of Civil Affairs, 216 Bureau of Education, 48 Bureau of Finance, 43 Bureau of Labor and Social Security, 41–3, 45, 46, 48, 52, 57, 59, 74, 86, 139, 143, 146, 190 Bureau of Oil and Gas, 77, 88 bureaucracy, 41, 44, 47, 49, 51, 56, 57, 65, 102, 147, 191, 234 and formalism, 146

Cai Fang, 8, 43 Cai Yongshun, 43, 55, 80, 81, 200, 225, 238, 247 Canada, 126 capitalism, 189, 194, 195, 234 advocates of, 95, 127, 195, 197–8 as same as market socialism, 194 capitalist firms, 26, 33, 39–40, 42, 51, 52, 55, 63–4, 71, 122 capitalist labor, 206 Homo economicus, 194 joint capital companies, 53, 64 petty-bourgeoisie, 195 profit-making enterprises (qiye), 194 capitalist roaders, see advocates of under capitalism Carroll, William, 126 Centers, Richard, 180 Central Coast, 121–2, 124, 129 central planning, see planned economy Chan, Anita, 75 Changchun, 171, 187, 192–3, 207 Changjiang, Upper, 121–3, 125, 129 changnei daiye, see “internal unemployed” under unemployment Chaoyang, 166 Chen Feng, 8, 9, 58, 127, 212, 228, 235 Chen Simin, 8 Chengdu Labor Bureau, 146 chief executive officers (CEOs), 100 children, see youth

250

Index

China Labour Bulletin, 228, 243 China National Offshore Oil Corporation (CNOOC), 67 China National Petroleum Company (CNPC), 79, 85, 91 Chinese Academy of Social Sciences, 190 Chinese Communist Party (CCP), 1, 2, 4, 5, 26, 27, 36, 39, 40, 47, 49, 53, 54, 58, 63, 84, 96, 99, 104, 107, 109, 113, 120, 123, 135, 136, 166–71, 174, 189, 195, 197–8, 208, 211, 214, 217, 229, 234–5, 237–8 14th Party Congress, 36 15th Party Congress, 4, 39, 47, 135, 189 16th Party Congress, 54 party-state, 64, 81, 189, 194–5 welcoming of capitalists into, 197–8 Chiu, Stephen, 51, 55, 75, 80, 83, 200, 203, 245 Chongqing, 77, 121, 122, 123, 147, 157, 214–15 Chongqing Knitting Factory, 214–15 Labor Arbitration Committees, 147 cities, 2–3, 6, 30, 31, 57, 65, 209, 234 government of, 46–9, 51–4, 56, 207, 216–17, 232 unemployment in, 190 urban labor markets, 141 urban population and collective action, 236 urban population and socialism, 102, 119 urban workforce, 32–3, 39, 72, 239 citizenship, 103, 120, 220, see also social membership Center for the Protection of the Rights of Disadvantaged Citizens, 238 civil society, 83, 178 class, 7, 9, 61–91, 171–2, 173

class dislocation, 7, 8 class hierarchy, 198, 201 shift from class to stratification, 199 typology of, 180–1 working class, see proletariat Cloward, Richard, 81, 213 CNC/PetroChina, 66, 78, 86 coastal China, 59 collective action, 7–9, 47, 61–91, 89, 113, 175, 225–44 anonymous mobilization, 212, 222, 237–40 economic versus political demands, 207–8, 220 failure of resistance movements, 203–23 and government policies, 204–7 J-curve, 128 material deprivation and, 124 nostalgia and, 115–18, 120, 124–30 organization of, 209–12 peaceful, 213–18 perception and, 128 “political opportunity structure,” 227, 232–3 punishment and, 209 relative deprivation, 128–9 student movement, 209, 212, 220, 234, 237 collective bargaining, 56 collective enterprises, 43, 57 college, 49 communism, see under socialism Communist Party, see Chinese Communist Party (CCP) connection, see guanxi contract system, 3, 23–4, 35, 44, 63, 149–53, 189 advent of, 155 and coercion, 106 contract termination, 74, 80, 149 “double track system,” 189 double-ten policy, 105

Index erosion of worker protections, 149–50 increasing role of, 153 labor contracts, 61, 68, 69–71, 87, 105, 136, 139–41, 145, 149–56, 189 labor service contracts, 151–2, 158 loss of faith in, 107 maiduan gongling (MDGL), 34, 69–71, 74, 86, 144–6 “open-ended contract,” 106–7, 150–2 Regulations on Labor Contracts, 63, 150, 152, 189 and worker bitterness toward, 106 corporate governance, 68, 78 corruption, 46, 87, 99–100, 190, 226, 229 and illicit activities, 110 and nostalgia, 117 countryside, 2, 9, 31–3, 59 and Cultural Revolution, 159, 161, 172, 175 migrants from, 136, 141, see also migrants under migration migrants to, 161 rural workforce, 32 Cultural Revolution, 2, 3, 9, 36, 104, 159, 161, 162, 172, 175, 191, 195, 208, 228, 234 nostalgia for, 116, 117 slogans of, 127 and worker militancy, 236 daigang, 3 daiye, 15, 17, 34, 189 daizi fenliu, see privatization Dalian City, 122 danwei, 2, 3, 15, 64–5, 69–71, 80, 100, 102–3, 105, 143, 185, 193, 239–40, see also danwei welfare socialism under welfare detachment from, 194 importance of belonging to, 141–2

251

relations to former, 147, 157 as safe haven, 188 Daqing, 71, 79, 190, 231–2, 237 Daqing Oil Company, 190 Daqing Oilfield, 75, 86, 88, 91 Datong, 121, 123 Davies, James, 128 Davis, Deborah, 84 decentralization, 68, 78, 160 dengji shiye, see “registered unemployed” under unemployment dingyuan, see fixed labor allotment division of labor, 41, 211 Dodgers, 118 Dongying, 71–3 double-ten policy, see under contract system Duncan, Otis Dudley, 163 Eckholm, Eric, 75 economic reforms, see post-Mao reforms economy, 63, 67 see also market forces education, 65, 159, 163, 171, 197 schools, 48 students, 48, 209, 212, 220, 227, 234, 237 university, 112 Elder, Glen, 161 elections, 82 elites, 39–41, 47, 53–4, 68, 213 employment discrimination, 137, 152–3 full, 103, 159, 198 hidden, 4 insecurity, 137, 199 quotas, 26, 27, 31, 46 self-employment, 49, 141, 188, 198, 206–7, 216 engineers, 21, 196, 197 enterprise reform, see marketization and post-Mao reforms

252

Index

environmental protection, 48 er wu, 4 Falungong, 211, 227 family planning, 104 Fan Maoyong, 8 farmers, 72 Federation of Industry and Commerce, 46, 50, 52 fenpei zhidu, 2 Ferroalloy Company, 190 fieldwork, 50, 66, 71, 85, 121, 187, 190, 192, 238 ethnography, 113, 187–8 interviews, 8, 40, 44, 46, 50, 56, 58, 66, 85, 86, 97, 104, 113, 120, 122–3, 125, 139, 145, 155, 157, 166, 169, 171, 185–8, 190, 194, 205, 211–12, 228, 236 surveys, 155, 181, 207, 223 firms, see under capitalism “fixed labor allotment,” 26, 27 Fligstein, Neil, 67, 82 food, 31, 40, 120, 144, 167, 171, 208, 214 foreign investment, 3, 5, 63, 85, 122, 144 Foucault, Michel, 198 framing, 9, 75, 76, 101–2, 105, 113 injustice frames, 124 nostalgia and, 117, 124–7, 129 France, 231 free market, 20, 33 see also marketization Fujian, 79, 150 functionalism, 83 Fushun, 166, 190 Fuxin, 166 fuyu renyuan, see surplus workers under workers Fuzhou, 57 Gallagher, Mary, 8, 43, 63, 81, 226, 245 Gang of Four, 36

Gansu, 56 Giles, John, 43, 57 Goffman, Erving, 102 Gold, Thomas, 245 Gorbachev, Mikhail, 227, 242 Gorz, Andre, 185 government, 4, 5, 8, 15–17, 20, 21, 40–2, 102, see also state, Chinese decision to break social compact, 144 incapacity of, 218 lack of coordination among agencies within, 206 local, see under state, Chinese regulation of lay-offs, 185 as target of worker resistance, 204 Great Leap Forward, 2, 104 and famine, 232 Great Proletarian Cultural Revolution, see Cultural Revolution Guang, Lei, 75, 81, 87, 246 Guangdong, 3, 191, 215 High Court of, 146 Guangzhou, 44, 150, 152 guanxi, 15, 41, 50, 53, 98, 100 guding gong, see permanent workers under workers Guo Jiyan, 8 Gurr, Ted, 128, 242 Han, 78 Han Dongfang, 228, 231, 243 Han Jingxuan, 8 Han Yimei, 181 Harbin, 37, 121, 228, 235 health care, 2, 7, 15, 31, 65, 75, 76, 86, 103, 120, 139, 141, 159 Hebei, 141, 145 Heilongjiang, 71, 122, 190 Henan, 37, 71, 74, 86, 122, 206 Hesiod, 115 hierarchy, 45–7, 50, 56, 65, 68 in worker memories, 131 Hirschman, Albert, 81

Index Hong Kong, 48, 228, 231 Hong Qiao, 8 Hou Liren, 161 housing, 64, 65, 103, 120 abuse of housing privileges, 85 reform, 83 subsidies, 15 work unit housing funds, 146 Hu Angang, 8, 56 Hu Yaobang, 226 Huang Yizhi, 163 Hubei, 21, 28, 48, 122, 141, 206 hukou, see residence permits human capital, 9, 161–2, 165 and income, 168–71 and job training, 175–8, 176 and social identification, 163–4, 171–5 human rights, 239, 244 Hunan, 122 Hung, Eva, 51, 55, 75, 80, 83, 200, 203, 245 Hungary, 208 Hurst, William, 8, 50, 55, 58, 80, 120, 125, 228, 236, 245–6 ideology, 25, 33, 64, 74, 122, 190, 193, 195, 234–5 income, 6–8, 21, 64, 84, 111, see also wages and human capital, 161–2, 165, 168–71 inequality, 8, 175 Industrial-Commercial Bureau, 56 industrialization, 2, 160, 191 inequality, 8, 123, 160, 175 Information Center for Human Rights and Democratic Movements in China, 228 Inner Mongolia, 28, 104 insurance, 24, 28, 33, 57, 63, 75, 140, 143, see also social security xiebao agreements, 140–7 “iron rice bowl,” 62, 76

253

Japan, 68, 100 colonial rule by, 122 Jialihua silk factory, 210 Jiang Zemin, 39, 53, 55 Jiangsu, 122, 151 jiben shenghuofei, see basic livelihood allowance Jilin, 37, 171, 190, 192, 207 Jingzhou, 141 job training, 24, 28, 46, 49, 52, 174–8, 176, 194 Johnston, M. Francis, 9 Karamay, 71, 78 Kernen, Antoine, 51, 55, 203, 217, 246 Korea, see South Korea Kozfan, I., 180 Labor Affairs Fund, 87 Labor Arbitration Committees (LACs), 141, 151, 156 labor bureau, see Ministry of Labor and Social Security labor consolidation, see post-Mao reforms labor contract system, see contract system labor law, see under law labor market, 2, 35–7, 40, 46–8, 50, 52, 54–8, 60, 137, 193 increasing competitiveness of, 152, 160, 203 “labor optimization,” 23–4 labor relations, 45, 108, 136, 138–42, 144–6, 148, 153, 189, 198, 200, 204 labor regulations, 46 “labor re-organization,” see under postMao reforms labor union, see union Lanzhou, 44, 59 laodong shengchanlü, see productivity under workers

254

Index

laodong youhua zuhe, see “labor optimization” laodong zuzhi zhengdun, see “labor re-organization” under postMao reforms laowu hetong, see labor service contracts under contract system lay-offs, see under unemployment law, 7, 24, 120 anti-discrimination clauses, 152–3 Constitution and, 211 Criminal Law, 211 increasing role of labor law, 153 and labor disputes, 157 labor law, 24, 83, 85, 105, 136–8, 143, 146–53 Labor Law of 1994, 146, 149–51 Labor Law of 1995, 105 Labor Law of 1997, 85 lack of anti-age discrimination regulations, 153 legalistic rhetoric, 123, 143 rule of, 113, 127 widening access to, 241 workers’ deployment of, 120, 137–8, 148, 227, 230, 233, 240 Lee, Ching Kwan, 8, 55, 63, 64, 75, 83, 84, 87, 113, 116, 117, 120, 122–3, 124, 125, 127, 131, 188, 200, 228 Lee, Grace O. M., 58 Leung, Trini W. Y., 228 Li, Lianjiang, 117, 119, 125, 232 Li Peilin, 8, 43, 80, 84, 246 Li Qiang, 246 liang bu zhao, 3, 34 Liaoning, 71, 122–3, 154, 160, 166, 190–1, 213, 217 Liaoyang, 71, 123, 190, 211, 232 protests, 87, 211, 237 Liaoyang Petrochemicals, 75

licenses, 46 Lin, Kun-chin, 50, 246 Lipset, Seymour Martin, 164 loans, 46, 49, 52, 53 Los Angeles, 118 loyalty, 44, 80, 100, 104–5, 208, 234 Lu Siqing, 228 Luehrmann, Laura, 232 Luoyang, 71, 74, 121, 123 Luoyang Petrochemicals, 68, 70, 74, 86, 91 Ma Li, 8 maiduan gongling, see contract system managerial class, 77–81, 84, 87, 96, 99, 129, 136, 229 arbitrary power of, 138 Mao Zedong, 36, 52, 59, 74, 124 egalitarianism under, 111, 122, 191, 197 Mao era, 52, 59, 74, 89, 111, 115, 123, 127, 191, 235 Maoism, 74, 86, 111, 122, 195, 197 nostalgia for Maoist past, 116–17, 119–20, 127, 129, 214 portraits of, 127 and voluntarism, 195 market economy, see marketization market forces, 61–4, 136–7 marketization, 1, 10, 20, 26, 27, 34, 36, 39, 40, 46, 52, 54, 58, 61, 79, 81, 102, 146, 159–60, 165, 192, 194, 197–8 and insecurity, 149, 187 internal marketization, 79 social changes unleashed by, 96, 149, 189 stabilization after, 227 Marxism, 188, 199 Marxism-Leninism, 1, 193 McAdam, Doug, 236 media, 17, 21, 48, 52, 58, 63–4, 190, 217

Index foreign journalists, 231–2 independent, 228 lack of coverage of protests, 231–2 official, 228, 231–2 and propaganda, 195 medicine, see health care mei zuzhi, see social membership Mengtougou, 97, 106, 113 methodology, see fieldwork comparative framework, 131 Mianyang, 209 Mianyang Daily, 221 migration, 2 migrants, 3, 5, 6, 32, 57, 63, 65, 84, 136, 141, 161, 190, 226 military, see soldiers Mills, C. Wright, 96, 99, 110 mingxing, see “stars” Ministry of Labor and Social Security, see Bureau of Labor and Social Security Moscow, 231 Mu Suixin, 190 Nanchong, 210 Nanjing, 79, 164 National Bureau of Statistics, 43, 207 national oil corporations (NOCs), 66–7, 68, 69–71, 80, 90 oilfields, 61–90 National Statistical Bureau, see National Bureau of Statistics neitui, see internal retirees under retirement neologisms, 15, 20 neo-traditionalist ties, 64, 66, 80, 86, 102, 200 New York Times, 75 newspapers, 17, 21, 40, 152, 239 night markets, 50 Ningbo, 79 Ningxia, 37 nodes, 50–4

255

non-governmental organizations (NGOs), 239, 245 North-Central China, 121–3, 125, 129 Northeast China, 3, 97, 120–3, 125, 129, 139, 145, 185, 190–2, 216, 228, 232, 236 economic base of, 191 “Northeastern situation,” 191 nostalgia, see under workers generalized, 125–6 ideational, 117–24, 121 material, 117–24, 121 political-economic, 125–6 political-ethos, 125–6 relational, 117–24, 121 three-dimensional, 125–6, 129 O’Brien, Kevin, 117, 119, 120, 125, 228, 232–3, 236 Offerlé, Michel, 231 oil, see national oil corporations (NOCs) Olson, Mancur, 163 Ou Wenquan, 8 Parish, William, 102 Park, Albert, 43 path dependency, 84 patronage, 39–41, 45, 50, 52, 54, 59, 117 peasants, 9, 45, 57, 65, 82 incarceration of, 211 strategies of resistance, 85 Peng Xiangdong, 190 pensions, see social security People’s Daily, 21, 27 People’s Liberation Army (PLA), 73 People’s University, 60 Perry, Elizabeth, 64, 85, 87, 127, 130, 228 petitions, 113 PetroChina, see CNC/PetroChina Piven, Frances Fox, 81, 213

256

Index

planned economy, 35, 36, 41, 47, 159, 178, 191 direct v. non-direct production, 35 and personal relationships, 111 post-planned economy, 54 transition from planned economy, 146, 148, 189 Poland, 208, 225, 233, 238 police, 73, 231, 243 policy discourse, 15–16, 20, 22, 25, 33, 96, 98 gap between rhetoric and reality, 113 jianyuan zengxiao, 112 Political and Legal Commission, 211 poor people, 81 Popkin, Samuel, 209 post-Mao reforms, 1, 2, 7, 10, 16, 20, 23, 28, 47, 52, 54, 55, 65, 189, 191, 211, 218, see also marketization enterprise reforms, 64, 65, 99–100, 108, 159–60, 235 “labor re-organization,” 21, 23 and life course, 104–5 perceived failure of, 100 pre-reform era, 116, 123, 129 problems of, 122 reformulation of class relations, 195 retrenchment of industrial sector, 203 worker resentment of, 218 workforce reduction, 16, 28, 29, 30–4, 31, 36, 61, 63, 68–9, 74, 77, 87, 91, 112, 138, 203–23 post-socialism, 61, 118, 129, 186, 188–9, 191, 198–9, 246 privatization, 1, 5, 6, 10, 68, 70, 100–1, 135, 159–60, 203–4, 241, see also marketization proletariat, 1, 5, 7, 17, 33, 39, 61–91, 234 fragmentation of, 61–2, 64–6, 71–80, 89, 185, 199

formation of, 131 and socialism, 107–8 “structural proletarianization,” 122 transformation into an underclass, 188, 199 propaganda, 52, 75, 194–8 Puyang, 71 Qiaokou, 60 Qingdao, 131, 143 Ratner, Robert, 126 Red Guards, 195 re-employment, 9, 24, 27, 40, 47–8, 51, 192, 204, 207 and age, 159 “40–50 Program,” 140–1, 155 internal redistribution, 145, 157 lack of opportunities for, 140, 217 and the private sector, 143, 206 “re-employment bases,” 49, 50, 52, 59 “re-employment mentality,” 217 “re-employment models,” 50 Re-Employment Project, 40, 42, 44, 46–7, 56, 60 re-employment service centers (RSCs), 2, 4–5, 45, 47, 139–40, 160, 205 “stars of,” 195 workers’ perceptions of, 207 reforms, see post-Mao reforms Renmin Ribao, 17, 34, 36 residence permits, 6, 64–5, 84, 190 retirement, 2, 42, 69–70, 72–3, 103, 105–7, 121, 136, 142–4, 150, 152, 157, 159, 189, 226, 237, 240 internal retirees, 17, 42, 70, 73–4, 86, 189 retirees in social movements, 235–7 riots, 75 Rocca, Jean-Louis, 55 Ruan, Danching, 83

Index rural, see countryside Russia, 222, 242, see also Soviet Union rustbelt, 190 salary, see wages Scandinavia, 244 schools, see under education Schultz, Theodore, 161 Scott, James, 85, 234 “self-help strategies,” 41 service sector, 24, 26, 48, 191, 194 severe acute respiratory syndrome (SARS), 161 severance fee, 73 severence pay, see compensation for under unemployment Shaanxi, 122, 197 Shandong, 71, 72 Coastal Shandong, 122, 131 Inland Shandong, 122, 131 Shandong Labor Gazetteer, 36 Shanghai, 27, 30, 44, 48, 56, 57, 64, 121, 122, 123, 139–53, 155, 164, 191, 214 Bureau of Labor, 143, 147 Shanghai Petrochemicals, 65, 79–80 Shanxi, 122 Shengli Oilfield, 68, 72 Shengli Oil Bureau, 73, 87 Shengli Square, 73 Shenyang, 36, 44, 49, 57, 58, 59, 121, 123, 154, 187, 217, 228, 230, 235, 236, 238, 239 Shenzhen, 48, 95, 157 Shichuan, see Sichuan shiye, 17, 18, 19, 34, 48, 189 shuangshi zhengce, see double-ten policy under contract system Shunyi, 95 Sichuan, 122, 146, 209, 210, 211 Sinopec, 67, 69, 79–80, 85, 86, 91 social behavior, 174–5 social capital, 80 social contract, 102–5

257

social democracy, 68 social identification, 163–4, 171–4, 173 social membership, 103 social movements, see collective action social networks, 122, 238, 240 social security, 74, 86, 103, 120, 139, 144, 157 demands for, 231 socialism, 1, 7, 26, 10, 26, 27, 36, 47, 64–5, 68–9, 74–8, 81, 87, 97, 98, 101–8, 111–13, 122, 127, 145, 149, 187, 189, 191, 192, 194, 195, 198–9, 200, 226, 228, 234, 235, 237 with Chinese characteristics, 192, 194–5, 198 and communism, 95 and contract system, 106 market socialism, 113 mass campaigns, 119 persistence in Northeast China, 191 redefinition of, 105 slogans of, 127, 192 socialist development, 112 socialist ideal, 104, 111, 114, 198, 234 Socialist Man, 198 socialist rhetoric, 108, 234–5 and worker radicalism, 122 Socialist Education Movement, 195 soldiers, 57, 72, 73, 195 army farm, 104 Solidarity (Poland), 225, 233, 238 Solinger, Dorothy, 8, 17, 27, 63, 80, 83, 84, 86, 244, 246–7 South China Morning Post, 200 South Korea, 203 Southeast Asia, 59 Soviet Union (USSR), 2, 122, 191 Special Economic Zones (SEZs), 5 “stars,” 50, 52

258

Index

state, Chinese, 7, 8, 16–17, 20, 23, 24, 25, 27, 30, 31, 33, 39, 46, 61–3, 65, 67, 81, see also government assistance from, 140 as authoritarian regime, 62, 82, 208, 218, 227 betrayal of workers by, 113, 150, 194 central state and local government, 5, 81, 86, 87, 243 challenges to, 127 construction of unemployment, 189–91 coping with social conflict, 241 disembedding project, 85 firms, see state-owned enterprises (SOEs) “good model workers,” 196, 216 and hegemony of the market, 82 hierarchical organization of, 41 and individuals, 102 ineffectiveness of repression, 208–9, 218 instability of, 113 legitimation in eyes of, 127 local, 41, 44, 45, 47, 48–9, 51–2, 60, 62, 221, see also government of under cities “Model Self-Employed Laid-Off Worker,” 216 “moral economy” of state sector, 70, 72, 132 and nostalgia, 120 policy reforms, 66–7, 111, 203–23, see also post-Mao reforms process of lodging complaints against, 228–35, 243 punishment of organizers by, 211–13 relative tolerance toward state worker protests, 227 and rule of law, 113 sacrificies on behalf of, 113 selective punishment, 212–13

and social contract, 102–5 state-building, 80, 122 statism, 83 strategy of dividing workers, 17, 20, 43, 62, 138, 142 subordination of workers, 188, 203–23 turn toward market logic, 27, 39–40, 198–9 State Council, 72, 74, 139, 146, 190 Development Research Center of, 190 state managers, see state, Chinese state-owned enterprises (SOEs), 1–3, 5, 17, 20, 21, 23, 24, 26, 30, 32, 36, 39, 42–5, 49, 56, 57, 61, 62, 63, 65, 67–71, 73, 86, 103, 127 “Chinese labor aristocracy,” 186 core subsidiaries, 67, 68, 77–8 and danwei, 239 disappearance of, 203 and economic growth, 191 factory director responsibility system, 108 and labor contracts, 151, 155 and maintenance of moral economic order, 132 and nostalgia, 120–1 planning of, 99 restructuring of, 67–9, 76, 78–9, 101, 135–6, 143–4, 159–60, 204, 217, 225–6 strikes and, see strikes structures, of, 83 survival of, 71, 73, 83 and trust, 105–8, 120 and worker dependency, 103, 193, 200 and worker grievances, 109–10, 146, 207 and xiagang workers, 142–3, 164–5 statistics, 6, 21, 25, 28, 30, 36, 46, 166, 193–4, 196

Index National Bureau of, see National Bureau of Statistics statistical yearbook, 43 strikes, 6, 110, 222 Su Shulin, 86 Suzhou, 143, 151 Tang, Wenfang, 102 Tangshan, 145 Tarrow, Sidney, 227 taxes, 46, 48, 52, 205–6, 229, 236 tekunhu, 48, 58 tertiary sector, see service sector textiles, 59, 122, 215 Thailand, 210 Tiananmen incident, 208, 211–12, 220, 226–7, 237 Tianjin, 122, 152, 164 tiaojiefei, see “adjustment fee” Tieling, 123 tourism, 52 trade union, see union unemployment, 6, 7, 17, 18, 19, 27, 28, 46, 54, 56, 86, 190 blaming the source of, 97–101 compensation for, 15, 21, 40, 44, 86, 106, 145, 148, 150–2, 204, 229 concentration in Northeastern China, 190 coping strategies, 8, 41, 42, 237, see also “self-help strategies” definition of, 178–9 enterprise-based reporting system, 42–3 “fired” v. “laid-off,” 42 and informal labor, 186 “internal unemployed,” 24 job security, 120, 160 lay-offs, 15, 16–17, 20, 27, 28, 30–2, 33, 37, 39, 42–3, 44, 46, 51, 59, 65, 68–71, 74, 77, 86, 103–4, 106, 107–10, 135, 153,

259

192, 203–23, 225–6, see also workforce reduction “lay-off agreement,” 139 meaning of, 103 new types of, 189 “non-assigned,” 24, 25 as an opportunity, 187 precariousness of, 192–4, 236–7 “registered unemployed,” 5 social deprivation and, 103 and social stability, 164–5 socialism and, 102–5 versus xiagang, 160, 170 union, 40, 48–9, 51–2, 59, 60, 75, 109, 196 party-run, 76, 109, 243, see also AllChina Federation of Trade Unions (ACFTU) reinstatement of independent, 237–8 United States, 73, 100 urban, see cities Urumqi, 71, 143 utilities, 65 Uyghurs, 78 wages, 28, 33, 40, 42, 64, 68, 69, 74, 117, 145 non-market, 136 non-payment of, 190 overdue, 211–12 subsidy wages, 21, 33, 45, 86, 148 Walder, Andrew, 64, 87, 102, 107, 200, 228 Wang Yongxi, 8 Warner, Malcolm, 58 wei anzhi, see “non-assigned” under unemployment Weihai, 131 welfare, 2, 3, 10, 15, 21, 26, 27, 40, 45, 47, 58, 63, 64, 71, 74, 117, 148, 176 danwei welfare socialism, 103, 144 dibao program, 140

260

Index

welfare—Continued disputes, 147 informal, 142 lack of, 123, 205 preferential implementation of, 137 requirements of, 136 retrenchment of, 138, 152, 187, 194–5, 199, 203, 226 SOEs and, 139, 142–4, 179 state workfare, 188, 199 West, the, 6, 78, 101, 116, 186, 195 women, 50, 53, 80 female workers, 141, 151 and prostitution, 193 role of older, 237 and wage inequality, 169, 172 Women’s Association, 216 women’s federation, 46, 49–50, 52, 53, 60 Won, Jaeyoun, 8, 246 work unit, see danwei workers, 8, 17, 32, 61–91, see also proletariat arrest of, 190 authority and, 102, 113 benefits, 24, see also wages and welfare bitterness toward labor contract system, 106 collective workers, 87 comprehension of troubles, 96–115 daigang, 154 dependency, 103, 107 fear of punishment, 212 grievances, 105, 109–10, 127, 207 incarceration of, 211 increase in labor disputes, 153 ineffectiveness of repression of, 208–9, 218 Labor Hero awards, 196 laid-off, see under unemployment loss of privileged status, 108–9, 188, 234 middle-aged, 159–81

mobilization and resistance, 61–91; failure of, 203–23; see also collective action and strikes moral and cultural repertoire, 97 new self-reliant workers, 194, 213 nostalgia, 110–12, 115–32, 154 older, 135–58, 237 outstanding employees, 196, 197 outstanding workers, 196, 197 permanent workers, 24, 135, 139, 146, 154, 189, 199 productivity, 20, 26, 35–6 protests, 113, 127, 154, 190, 210–11, 225–44, see also collective action radicalization of, 188 “second-class,” 152 self-reliance, 1, 194–6, 199, 213 slogans of, 208 SOE workers, 135–6 surplus workers, 4, 20, 21, 23–4, 25, 26, 30, 35, 52, 63 survival strategies of, 110, 186, 193 temporary, 3, 23, 28, 31, 34, 64–5, 72, 87, 141, 185, 188, 190 and trust, 105–8, 120 unskilled, 73, 84, 157 versus “employees,” 195–7, 199 work ethic, 96 workers’ contention, see collective action workforce reduction, see under postMao reforms working class, see proletariat World Trade Organization (WTO), 10, 78, 147 Wrigley Field, 118 wu gudingqi hetong, see “open-ended contract” under contract system Wu-ai Market, 49 Wuchang, 52 Wuhan, 44, 46, 49, 50, 51, 56, 57, 60, 97, 106, 108, 113, 141, 162

Index People’s Congress of, 206 Wuhan Modern Household Management Academy, 48 Wuhan University, 238 Wuxi, 143 xiagang, 1, 3–5, 6, 8, 9–10, 15–37, 19, 22, 25, 39–60, 69–71, 73–4, 86, 87, 95, 97–8, 160, 164–5, 167–8, 170, 193, 200 first official use of, 154 flexibility of, 148, 179 and labor law, 135–58 period of, 153 and political confrontations, 208 preferential treatment of xiagang workers, 148 and SOE restructuring, 135–6, 160, 217 subtypes of, 138–45, 226 and transition to capitalism, 189–90 versus daigang, 154 and worker loyalty, 105 xiagang zheng, see zheng xiagang zhigong, 44, see also lay-offs under unemployment and younger workers, 156 xiahai, 9 Xi’an, 57 xiaxiang, 9, 104 Xie Yu, 181 Xinjiang, 71 Xinjiang Oil Bureau (XJOB), 78, 88 Xue Chengtai, 163

261

Yakubovich, V., 180 Yang, Guobin, 116, 117, 119, 124 Yang, Mayfair, 63, 83, 85 Yang Shucheng, 58 Yantai, 131 Yao Yuchun, 60 Yellow River, 67 yinxing jiuye, see hidden under employment youth, 2, 17, 72, 212, 240 hope for children, 112 sent-down (zhiqing), 119 Yu Faming, 8 Yu Fawu, 8 Yue Qifen, 190 Yunnan, 95 zaijiuye fuwu zhongxin, see re-employment service centers (RSCs) under re-employment zimou shenglu, see “self-help strategies” Zhang Sai, 6 Zhang Wei, 8 Zhang Yi, 8, 43, 80, 84, 247 Zhang Yinghua, 163 Zhao Yandong, 162 zheng, 42, 45, 56 Zhengzhou, 121 Zhongnanhai, 96 Zhongyuan, 70, 86 Zhongyuan Oilfield, 79, 86, 88, 91 Zhou Enlai, 36, 227 Zhou Litai, 157 Zhou Xueguang, 63, 161 Zhu Rongji, 66, 192 Zigong, 44