In 2000 Zhang Zemin, then President of China and General Secretary of the Chinese Communist Party, unveiled his great new political insight—the theory of the “three represents”. Although it’s easy to ridicule the pseudo-Marxist rhetoric and the exaggerated claims of profundity for his theory, it did signify an important shift in the Communist Party’s strategic thinking. It stated that the Party represented three groups in Chinese society: “the advanced productive forces, advanced culture and the fundamental interests of the broad masses”, aimed respectively at private business, middle class intellectuals and the working population. In other words, the CCP would no longer claim to represent specific class interests but would now be positioned as a national party with the interests of all sections of society at heart.

The enormous social and economic changes in the decades since Mao’s death have produced equally dramatic shifts in the country’s class structure. A wealthy business class has emerged from nothing and merged with the upper echelons of state officialdom adding a private capitalist dimension to the old state capitalist ruling class. Millions of former state workers have lost their jobs in the old industrial centres, while millions more have migrated from the countryside to form a new, and combative, working class in the sweatshops concentrated in the south-east. The size of the new middle class is often debated, nevertheless it is substantial on any measure.

Many commentators have assumed that economic liberalisation would more or less inevitably be followed by political liberalisation. For instance Bruce Dickson quotes Chinese academic Liu Junning claiming that “a free market in commodities will ultimately result in a free market of ideas and a demand for liberal ideas”. Dickson himself is sceptical of the notion that what he calls “red capitalists” can bring democratic change, but nonetheless asserts that “greater political liberalisation” will “bring the economic and political systems into greater harmony”.

If the ruling party wasn’t going to reform itself out of existence, then some combination of private business and the middle classes would lead the way. However, the Communist Party has managed to maintain its rule by adapting to the new social forces, in particular by incorporating private capitalist interests. Nevertheless, the tensions produced by China’s rapid development, especially a dramatic increase in inequality, means that the regime has not gone unchallenged.

The scale and persistence of workers’ struggles has made them impossible to ignore. But most writers, simply extrapolating from the current situation, see them as localised, economic protests that are little more than a nuisance to the regime. This article will examine the changes in each of the social classes, then look at the strategies the CCP has adopted to ensure its continued rule, and finally argue that the working class has the potential to lead a struggle for democracy that the middle class and private capitalists have so far shown little interest in.

Getting rich first

Boosters of China’s market reforms often repeat the claim that “400 million have been lifted out of poverty”, a figure that derives from Chinese government propaganda. But the official poverty line has consistently underestimated actual poverty levels. So one group of researchers calculate that up to 60 million urban residents and as many as 213 million in the countryside are “living below the minimum standard of living”. According to Shi Li and Terry Sicular, absolute poverty has decreased since the early 1980s but relative poverty has not. In other words, the poor may not be getting poorer but the rich are certainly getting richer: “Between 2002 and 2007, income per capita of the richest deciles nearly doubled”; consequently inequality is “at least moderately high” by international standards.

In the first decades of Communist Party rule inequality was much lower than it is today, although society was not as egalitarian as the ubiquitous blue Mao suits might suggest. Wages in state enterprises and the bureaucracy were governed by a scale that initially gave the highest earners more than 31 times as much as the lowest. Although the gap between the lowest and highest rungs was reduced somewhat in 1958, within that range the same period saw an increase in managerial salaries compared to workers’ wages. The majority of workers, working outside the state sector, would often earn less than the lowest rung of this scale.

Official policy was more concerned with appearance than substance. Conspicuous consumption was taboo, especially during the Cultural Revolution decade (1966-76), but by the early 1970s differentials remained much the same. Writing in 1975, Martin King Whyte noted that “in China today there are still marked differences in income, power, educational skills, and so forth, combined with vigorous efforts to moderate the effects of these inequalities on public consciousness”.

As reform took hold in the 1980s the regime became less squeamish about inequality. Deng Xiaoping, the dominant figure in the CCP between the late 1970s and the early 1990s, famously decreed that “some must get rich first”. From a low starting point inequality rose inexorably, so that by the mid-2000s China was “significantly more unequal than most Asian developing countries”. And Barry Naughton goes on to suggest that “there may be no other case where a society’s income distribution has deteriorated so much, so fast”.

The prospect of inequality provoking social unrest sufficiently worried the leadership of Hu Jintao and Wen Jiabao, appointed at the end of 2002, that they introduced a series of poverty reduction measures. However, the impact of these measures has been limited. Although the rise in inequality, as measured by the Gini coefficient, appears to have been halted it has not declined significantly either. Poverty reduction comes a poor second to economic growth in government priorities. For instance, the minimum wage legislation introduced in 2004 has been undermined by ineffective implementation and rates that started low relative to average urban wages and then declined.

Growth of the advanced productive forces

As of October 2016 China was home to no fewer than 594 dollar billionaires, more than the United States. Top of the pile is Wang Jianlin, CEO of real estate group Wanda, worth a staggering $32.1 billion. This in a country where the monthly minimum wage can be as low as 1,000 Chinese Yuan (about $145 or £116).

After the 1949 revolution, the new regime initially encouraged the “national bourgeoisie”—those capitalists prepared to work with the Communists. But by 1956 all industry had been taken into state ownership. The expropriated owners were compensated though, and many were recruited as managers.

Since the introduction of economic reforms from 1978, and particularly following Deng Xiaoping’s famous southern tour of 1992, private capitalism has returned with a vengeance. According to government figures, there were over 9 million privately owned “corporate enterprises” by 2015.

Where did these new capitalists come from? A substantial number of the new private capitalists are former CCP cadres. Wang Jianlin, for instance, used to be a government official in Dalian. He is the son of a Long March veteran too.For some the roots of privilege go even further back. Minglu Chen cites the example of one family who were “local gentry before the Communist Party’s accession to power. The head of the family became a military commander during the War of Resistance to Japan (1937-45). He and his children became Communist Party-state officials under and after Mao, and the grandchildren became members of the new rich after the introduction of China’s economic reforms”.

This was not an isolated case as “the Chinese Communist movement on the eve of 1949 had a substantial number of members from the local elites and the middle classes, and unsurprisingly they transferred in large measure to the post-1949 elite”. Others, if they hadn’t actually opposed the Communist Party, were able to join after the revolution. Although many were persecuted during the Cultural Revolution, after 1978 most were rehabilitated and able to resume “working in the professions, including the rapidly expanding business sector”.

One way in which officials became private capitalists was by the acquisition of the assets of their former employers—“a massive diversion…of the assets of state enterprises into the private hands of the cadres in charge of them”. The corrupt nature of the process is clear: “companies set the face value of their stock incredibly cheaply and sold stock exclusively to cadres, senior cadres directly in charge of corporation reforms often became large shareholders overnight”.

Despite the prosecution of some of the more blatant culprits, government anti-corruption initiatives have done little to stem the tide. Writing in 2000, He Qinglian suggested that such initiatives could be subverted by local officials for their own ends: “official campaigns against corruption are often no longer real threats to it, but rather instruments of political leverage and blackmail for personal gain”. As an example she cites the case of one individual who blackmailed corrupt local officials into giving him “control over the whole of the political, and part of the economic and personnel, structures” of the city.

But perhaps there is a more fundamental reason for the government’s toleration of corruption. As they started to open up the economy, China’s rulers faced a dilemma. They wanted to encourage foreign investment, but couldn’t allow the country to become dominated by external interests as it had before 1949. Chinese owned businesses of a scale and efficiency capable of competing with their foreign rivals were required. As then premier Jiang Zemin put it to the 15th party congress: “we must, through the market, amass great enterprise groups that are of relatively strong competitive ability, multi-regional, multi-sectoral, multi-ownership system, and multi-national”. But how could an indigenous capitalist class with this clout be created when there was no private capital on any significant scale? The incorporation of Hong Kong and its business class after 1997 was a start. But many sizeable Chinese owned corporations were created by allowing managers of state-owned enterprises (SOEs) to take them over.

The real aim of the process wasn’t lost on the workers affected. As one noted in his memoir: “the so-called reform of the enterprise ownership regime is little more than an effort to turn the factories that belong to everybody into ones that are in the bosses’ pocket, changing the factory’s ‘surname’ from Mr Publicly Owned to Mr Privately Owned, and enabling the bosses to do so without even paying a cent”.

Those who didn’t have a background in the party found it useful to develop links with local officials: “Nascent capitalists outside the bureaucracy have needed cadre patrons, not only to help them to get access to market and bank loans but also to fend off the predatory activities of corrupt cadres”.

The intimate connections that have developed between private capital and the state since Mao’s time make it impossible to tell where one begins and the other ends: “Many collective enterprises are owned and run by capitalists, while many private enterprises are spun off of state properties owned and run by cadres or their kin”, while it is “very hard to distinguish what in the private sector is owned by the state, by collectives, or by capitalists, because the boundaries of their property relations are often blurred”. The higher echelons of the state bureaucracy, wealthy private capitalists and the murky mixture of the two that lies between are best understood as constituting a single ruling class.

Rehabilitation of the stinking ninth

The inclusion of the second category “advanced culture” in the “three represents” was a signal to intellectuals that, provided they stayed within limits defined by the Party, they would not be arbitrarily persecuted as they were under Mao. In the early years of Communist rule intellectuals were encouraged to join the party in such numbers that by 1957 “there were more intellectuals in China’s ‘party of the proletariat’ than there were members of the working class”. But during the Cultural Revolution years they were fiercely persecuted as the “stinking ninth” category. According to Maurice Meisner the intellectuals were a stand-in scapegoat for the capitalists who no longer existed: “In a movement directed against ‘the bourgeoisie’, intellectuals seemed the most obviously ‘bourgeois’ in a society that no longer had a bourgeoisie”.

For the current regime a growing and increasingly affluent middle class is a source of social stability, while many Western writers see the same group as the best hope for democratisation. But claims for the size of this class are greatly exaggerated. A 2007 China Daily article, for instance, predicted that by 2020 over 50 percent of the population will be middle class. Underlying these assumptions is a flawed model of Western societies as predominantly middle class with smaller numbers of the very rich at the top and an “underclass” of the poorest at the bottom. More sober analysts have arrived at much lower estimates. David Goodman and Min Tang both give rough estimates of around 12 percent of the population, while Chen and Lu go slightly higher at 14 percent. However, all of them include some white collar workers as part of the middle class.

What these studies have in common is a definition of the middle class based on some combination of income level, profession and self-identification. A Marxist definition of class is an objective one, based on the individual’s relationship to the means of production. The two classes that dominate the capitalist mode of production are the ruling class, who own or control the means of production, and the working class whose only recourse is to sell their labour power. Importantly this means that the working class includes groups such as teachers or office workers who are often assumed to be middle class.

The middle class, as Alex Callinicos points out, is a more heterogeneous mixture of those who are pulled in differing degrees between the two dominant classes. In China’s case this would include the archetypically petty bourgeois getihu or small traders, a common sight in every city and town. But the main focus of interest is on the new middle class of professionals, managers, etc. So, while income and profession are important factors, they don’t tell the whole story, and whether someone thinks of themselves as middle class or not is irrelevant. All of this suggests that the real figure is probably considerably lower than the 12-14 percent of the population quoted above.

Broad masses

The reform era in China has seen a massive migration from the countryside to the cities and towns. The urban population rose from 18 percent in 1978 to 55 percent by 2014, and agricultural and related employment declined from 71 percent of the total to 30 percent in the same period. In terms of social classes, in 1978 workers of various sorts made up 23.3 percent of the working population rising to 31.8 percent by 2006, while “agricultural labourers” declined from 67.4 percent to 40.3 percent, a trend which has continued since.

The working class

Four decades of reform have wrought enormous changes in the composition of the working class. A major reduction in the state sector workforce in the “rust-belt” of the north-east and south-west, and simultaneously the emergence of a massive new workforce in the export sector, the “sun-belt”, concentrated in the south-east.

This also represented a significant shift from heavy industry to the production of consumer goods, a shift borne out by government statistics. Employment in the “secondary” sector (manufacturing, mining, construction, etc) rose from 17.3 percent in 1978 to a peak of 30.3 percent in 2012, while “tertiary” (services, etc) employment grew from 12.2 percent to 40.6 percent in 2014. Their respective contributions to GDP went from 47.6 to 42.7 percent and 24.5 to 48.1 percent, while that of the “primary” sector (agriculture) declined markedly from 27.9 to 9.2 percent.

Although some state firms, particularly in the north-east, had let workers go before then, it was only after the 15th party congress in 1997 that mass lay-offs really took off. At the congress, general secretary Jiang Zemin instructed the managers of SOEs to cut workers “to increase efficiency”. In the next eight years almost 70 million state sector workers lost their jobs, roughly halving the workforce. State employment had actually grown substantially in the first two decades of reform so that overall the fall was less dramatic, from 95 million in 1978 to 68 million in 2014. Today the state sector still accounts for 18 percent of all urban employment.

It is a commonplace that the mass exodus of Chinese peasants from their villages in recent years represents the largest migration in history. The 2010 census reported that 171 million people were not living in the county they were registered in, up from 79 million in 2000. Inter-provincial migration was more likely to be for manual or factory work at 73 percent than intra-provincial at

38 percent.Migration has created some enormous concentrations of workers. There are 120,000 workers at one site, the “FAW auto city” in Changchun. The most common destination for many years was Guangdong province, the epicentre of the industrial boom. The Guangdong manufacturing centre of Dongguan, described by Hsiao-hung Pai as “a mass of grey concrete absorbing cheap labour from afar”, is home to over 8 million migrants (2009 figures), as against a local population of 1 million. The city has also become a centre of labour militancy.

But the census data indicates a more recent shift away from Guangdong as a destination for migrants towards Shanghai and the lower Yangtze River region. Guangdong accounted for 35.5 percent of national migration in 2000 but only 25 percent in 2010, while the Yangtze delta, where average wages are higher and living conditions better, grew from 22 percent to 33 percent. This suggests that “migrants now have more choices and that many regions now compete for their labour. The shortage of migrant labour in southern China also reflects this new reality”.

In recent years industrialisation has spread inland partly as a result of government initiatives to develop the western provinces. This has opened up employment opportunities closer to home for many would-be migrants. This trend is born out by the census data. The areas with the largest proportion of inter-provincial migrants in their populations remain the southern coastal provinces along with Beijing and nearby Tianjin, but the fastest growing “floating” populations are in western and central China. The proportion of migrants leaving their home province had fallen slightly from 54 to 50 percent too.

The same pattern is also indicated by an increase in return migration. This was in part caused by factory closures in the export processing areas following the global recession of 2008. But as Zai Liang, Zhen Li and Zhongdong Ma note: “a substantial proportion of return migrants are not returning to villages but rather returning to the nearby towns or cities in Sichuan or Hunan”.

Another significant trend is the increasing number of second generation migrants, “who were born in cities of their parents’ migrant destination”. Brought up in an urban environment they are less able and willing to retreat to a rural home in the face of hardship: “Most members of this new generation of migrants have no experience of rural life and will inevitably remain in the cities where they grew up”.

Peasantry

The early reforms in agriculture broke up the people’s communes, gradually reduced the government monopoly on grain purchases and allowed farmers to sell some of their produce at market prices. Initially this produced a marked increase in rural incomes, but from the mid-1980s two problems began to emerge: a sustained increase in the size of local officialdom paid for by excessive taxation, and a widening gap between output prices and the cost of inputs.

Once the communes were replaced by administrative townships with the power to raise taxes the bureaucracy expanded, reproducing locally the various departments of higher level government. Turning Mao’s famous dictum that “a revolution is not a dinner party” on its head, working life became one long feast for communist officialdom: “Like a cloud of locusts, officials with their appetites in tow descend on the countryside and are infinitely inventive in coming up with excuses to eat and drink”.They were equally inventive in coming up with new taxes to pay for this lifestyle. According to Chen Guidi and Wu Chuntao, the peasant tax burden increased five fold between 1990 and 2000. Some areas even had an “attitude tax” imposed on those who failed to pay the other taxes promptly.

With falling prices rural households could find it impossible to make ends meet: “Many peasants simply could not afford these taxes and fees, as the prices of grain and pigs, two major sources of their income, were falling while the price of agricultural inputs, such as pesticides and chemical fertilizers, was increasing”. Many were forced to migrate: “The family has no money, your little one needs to go to school, what can you do about it if you don’t go away to work? Everyone in the village from kids who’ve just left school to fifty-year-olds all go away to work, whole families”.

Growth of agribusiness

Despite all the upheavals of the Mao and reform periods, agriculture in China has until recently remained the preserve of small-scale peasant production. However, the last two decades have seen an accelerating trend towards commercialisation and larger scale operations. At the forefront of this change are so-called “dragon head” enterprises, promoted by the government as “the major agents for constructing a modern agricultural system” and “the key to advancing agricultural industrialisation”. They are encouraged by billions of Yuan in government subsidies and tax exemptions.

Initially these enterprises focused primarily on processing and marketing produce from the peasant farm, but they are becoming increasingly involved in production too. By 2011 a staggering 110 million rural households were working for 110,000 dragon heads with total sales of 5.7 trillion Yuan (US $917 billion).

In theory farmers should gain “technology, information and market opportunities” from their association with the dragon head, but many were not enthusiastic. In the case investigated by Luo Qiangjiang, Joel Andreas and Yao Li, farmers were coerced into converting their land, formerly used as rice paddies and fish ponds, to grow grapes for wine production. The company was assisted in this by pressure from local government officials, who were in turn pressurised and offered financial incentives by the county government. When that didn’t work bulldozers were sent in to destroy the remaining fish ponds. The farmers didn’t reap the promised benefits either. In the ensuing years, with a glut in production, the company violated its contracts by offering less than the promised price for the grapes.

The next phase, according to Mindi Schneider, will be “clustering” based on a “model of agribusiness concentration in countries such as the US…where a handful of firms control the lion’s share of agricultural production”. In China:

The most powerful firms will be mainly domestic, and largely dragon heads. Clustering, in fact, is a way to resist the very firms that control the US and much of the global food system. It is a political decision aimed at maintaining domestic control of the production and circulation of food, and increasing international competitiveness.

Schneider concludes by saying that “smallholder farmers are being systematically replaced with vertically integrated agribusiness operations”. But even with small-scale farming there is a growing class differentiation. Remittances from migrant relatives are invested in the family farm, drawing it into a market dependence that demands further investment to remain competitive. As Qian Forrest Zhang explains:

Family farming in today’s China…heavily depends on wage labour in two ways: first, on hired wage workers in agricultural production in family-managed entrepreneurial farms and family-worked commercial farms; and, second, through capitalisation made possible by wage income remittance. Furthermore, most family farms have become market dependent. Their production and the family producers’ social reproduction can only be maintained through market competition and commodity relations. They are subjected to the same market imperatives as corporate farms. They either raise capitalisation to increase labour and land productivity and stay competitive in markets, or are gradually pushed into wage work.

Once again party cadres were able to use their positions to get ahead by “politically assisted accumulation”. Those who were not originally cadres could be co-opted—“office-holding by invitation”—to ensure a local government favourable to the interests of capitalist farmers.

So what we are seeing is the creation of a new rural capitalist class alongside the proletarianisation of the peasantry as a growing number of rural inhabitants are separated from the land and forced to sell their labour to make a living, either locally in agricultural work or as migrants to the cities.

Continued Communist Party rule

There is a common assumption among commentators on China that economic liberalisation must sooner or later lead to political liberalisation. As Dickson puts it: “Many observers hope that political change can be incremental, just as economic reform has been”. The agents of this change will either be the state itself, a “civil society” composed of some mixture of private capitalists and middle class intellectuals, or a combination of the two with civil society pressing the state to reform.

However, as Dickson goes on to suggest “The argument that the CCP can ultimately be the agent for gradual and peaceful political change in China…is not based on any tangible evidence”. Goodman makes a similar point about the capitalist class, the “argument about the inevitability of liberal democracy in China exists without any evidence that entrepreneurs actually want the political system to change, and indeed the weight of evidence does not currently support the case”.

As we have seen above, it is immensely difficult anyway to disentangle the interests of Communist Party bureaucrats and private business. And the regime has gone to great lengths to incorporate private capitalists with a “two-pronged strategy” of “creating corporatist links between the state and the business sector and co-opting individual entrepreneurs into the CCP”.

The state organises business associations based on industry or enterprise size. The leaders of these associations generally double up as party or state functionaries. While there is an element of coercion—membership is compulsory for instance and extra-state organisation is strictly prohibited—these associations are perceived by the entrepreneurs themselves as representing their interests. Not surprisingly, the Industrial and Commercial Federation, which represents the largest corporations, is the most influential.

The CCP remains an important factor in the workplace too. State enterprises are run by “cadre managers” who hold high-level party positions. By law each company is supposed to have an internal party committee and Zhang reports how one foreign partner in a joint venture was won over to the advantages of this organisation in “mobilising workers and promoting production”. She also describes how, at two SOEs, the Peoples’ Liberation Army were called in to train new recruits in “patriotism, discipline, collectivism and hard work”!

When the “three represents” theory gave the green light for private capitalists to join the party it was to a certain extent an acceptance of an already existing reality. Despite being formally banned from membership they had been joining in increasing numbers. The benefits included protection from competitors and easier access to credit. They have also played an increasingly prominent role in the higher echelons of the party. In 2013 there were no fewer than 31 billionaires in the National People’s Congress and 52 in the Chinese People’s Political Consultative Conference.

If the prestige associated with such positions is not enough to win them over, private business is offered more tangible carrots—they pay much lower rates of tax than SOEs. In 2005 the private sector paid only 7.1 percent of total enterprise tax despite producing 50 percent of GDP, while the public sector paid 63 percent of the tax on only 39 percent of GDP.

In short the CCP and private capitalists have developed a “symbiotic” relationship that benefits both sides. Entrepreneurs are “unwilling to risk the certain benefits of the existing system, despite its many irrationalities, for the uncertainties of an alternative arrangement”, and prefer to work within the system. “Rather than present a challenge to the CCP’s continued domination of the political system” Chen Jie and Bruce Dickson argue, “China’s capitalists may prove to be a key source of support”.

Min Tang draws similar conclusions regarding the middle class, who “are not comfortable with the uncertainty of political instability or political change in China” and tend not to “rock the boat of single-party rule”. For many this is because they are dependent on the state for their employment.

In 1989 students and elements of the middle class joined mass protests against the regime, but since then the government has made a concerted effort to win them over. According to Jonathan Unger, middle class state employees have been favoured with increased salaries and hefty housing subsidies. These material benefits have helped inculcate a sense of elitism so that “most of them hold the rural population in disdain” and would be fearful of giving them the vote. University students increasingly come from these privileged layers too, with fewer from low income backgrounds.Unger concludes that “the Chinese educated middle class has become a bulwark of the current regime”. Goodman makes a similar point, China’s “intermediate middle classes are fundamental supporters of the contemporary Party-state, even if at times some are also the most articulate ­critics of specific actions…particularly wanting it to be more efficient and just”. At some point these frustrations could bring sections of the middle class into open conflict with the regime, but there is little sign of it at present—they have too much to lose.

What about the working class? While there is a growing body of literature on strikes and protests by workers in China, few authors see in them any potential for systemic or even democratic change. Goodman’s summary is typical:

The old working class (in the public sector) has been considerably disempowered by the changes of the reform era, the new working class (largely migrant workers in the marketised sector of the economy) has yet to become sufficiently organised to pose much of a challenge beyond local activism, and the prospect of cooperation between the two segments of the working class remains low.

For Ching Kwan Lee the power of the state encourages mobilisations that are local and “cellular”: “The common knowledge that the state will not tolerate cross-workplace alliances coupled with the threat of suppression generates self-limiting approaches to protests among workers, who primarily seek to resolve what they see as firm-specific grievances such as layoffs and non-payment of wages or benefits”.

While there is undoubtedly much truth in these analyses as a snapshot of the current state of the workers’ movement, there is an underlying assumption that things can only change slowly. Anita Chan and Kaxton Siu make this explicit: “The emergence of a class for itself takes longer than one or two generations. Thus, despite the expectation that this second generation of migrant workers will push through to a new stage of class consciousness, reality militates against this expectation”. Eli Friedman concludes that “there is no credible threat to capital at the class level”. Nevertheless, he goes on to note that “the state has deprived itself of the institutional machinery to co-opt worker radicalism”, which may facilitate the emergence of “proletarian politics”.

Lu Zhang credits workers with a greater degree of influence on national politics, claiming that “rising labour unrest…has pressured the central government” to introduce labour laws and policy changes to the benefit of workers. Pak Nang Leung and Pun Ngai make a similar point:

Current research on Chinese labour focuses primarily on how institutional factors, such as government policies, the legal system, international trade rules, corporate social responsibility, among others, explain the production regimes and work identities of the migrant workers in China. However, this perspective tends to ignore how migrant workers are a social force in and of themselves and are able to shape China’s social and political development.

The apparently local and “self-limiting” nature of protest may mask a deeper challenge. One laid-off miner explained:

We deeply hate Jiang Zemin and the other central leaders! They have destroyed the economy of the entire Northeast. But it is of no use to criticise them directly…you will just be arrested; but it will not put food in your child’s stomach! When there is a protest here, we always say that it is against problems with the Benxi city government or mining bureau. That way, sometimes the central government…distributes money to help us.

Lu Zhang’s fascinating study of the automobile industry gives us an insight into the methods used to exploit and divide workers in one of China’s most successful sectors. In 2009 China overtook the US to become the world’s leading producer, and auto workers are now at the forefront of resistance. As Zhang shows, this leap in production has been achieved by ramping up the exploitation of labour. Between 1994 and 2010 car production increased almost seven fold while employment in the industry barely rose, and wages grew much more slowly than either productivity or profits.

This was achieved in part by the introduction of what Zhang calls “labour force dualism”—dividing the workforce into a core of “formal” employees who enjoy a level of job security and higher wages, and temporary workers whose employment is more precarious and whose conditions are worse. The “large automakers chose to protect a segment of formal workers in an effort to obtain consensual and cooperative labour relations” in order to “avoid potential labour unrest”.

This drive to casualisation has been replicated across the country. By 2010

20 percent of the workforce—some 60 million people—were agency staff, known in China as “dispatch” workers. These are supposed to be used only for temporary work, but many have become “temporary workers in permanent jobs”. The use of student interns has been increasing too, constituting about 30 percent of assembly line workers in two of Zhang’s car factories.

However, it doesn’t necessarily follow that the divisions sown between formal and temporary workers prevents them taking action. In fact the resentments ­created can fuel resistance.

A new workers’ movement

Since the re-emergence of strikes and protests in the early 1990s the government has attempted to divert discontent into a formal grievance procedure, and where that fails to restrict actions to individual enterprises. This has encouraged a certain “self-limiting” attitude among workers who unsurprisingly want to avoid confrontation with the forces of the state. But there is an increasing number of examples of workers going beyond these limits, such as strike waves across a city or an industry. There are also signs that workers are learning from the struggle and becoming more assertive in their demands.

To take two examples from the city of Dongguan, mentioned above. A 2004 strike by several hundred workers at the Xinxiong shoe factory was sparked by a change in shift patterns to reduce their overtime payments. But a local official described it as “an almost inevitable outbreak of collective anger against the management” and the harsh conditions at the plant. Ten years later the scale of the action at Yue Yuen, another Dongguan shoe company, was much larger—up to 40,000 struck for two weeks. This strike ended in defeat, but it illustrated how the experience of class struggle is educating workers. According to one striker there have been “countless” small-scale strikes at individual Yue Yuen plants, but this was the first time they had all struck together. The same interviewee, bitter at the role played by the police and the Federation of Trade Unions in forcing them back to work, had learnt some important lessons: “I think they are on the same side—the Federation, the cops and the employer”.

The changing patterns of migration are having an impact on the struggle too. Perhaps workers returning to their home provinces are bringing their experience of organising with them. The giant Foxconn company, made notorious by a spate of employee suicides, employs almost 1 million people across China. In 2010 it was hit by a strike at its plant in Foshan, Guangdong. But two years later there were also disputes at its newer plants in Zhengzhou, central China and Taiyuan further west. Taiyuan is the capital of Shanxi, one of the poorest provinces, long bypassed by the economic boom but now developing rapidly.

Some of the groups often identified as middle class have also been taking strike action. The number of teachers’ strikes reported to the Hong Kong based China Labour Bulletin doubled each year from 2012 to reach 82 in 2014. And, at the end of that year, a rash of strikes in the north-eastern province of Heilongjiang was provoked by a pilot scheme to make public sector workers pay their own pension contributions. The CLB explained some of the issues facing teachers in its latest overview of the movement. Some would be familiar to their counterparts in the UK:

Teachers in well-established government schools in major cities can earn a reasonable salary and do not have to worry too much about wage arrears. However they often have to work long hours and supervise students’ extracurricular activities with no overtime payment. The situation in many smaller, less economically developed towns can be a lot worse. Teachers are often poorly paid, especially when compared with civil servants and other public employees with the same experience and qualifications, and can go several months without being paid at all.

Workers have developed innovative new tactics in the struggle too. For instance male workers are thought to be more vulnerable to arrest, so their female colleagues often come to the fore in confrontations with police: “female workers who used to be docile and obedient on the job became very brave and militant; they stood in the front to protect the male strikers”. This is another example of the way in which attempts to control workers—the employment of supposedly more subservient young women—are being undermined by the experience of struggle.

For many writers the Chinese working class is divided into distinct interest groups—formal versus casual, migrant versus indigenous, state versus private sector—with little in common. These divisions supposedly prevent the emergence of a national labour movement. But do they really present insurmountable obstacles? The introduction of “dualism” in the workforce and the widespread use of casual labour was clearly intended to weaken worker unity as well as being a cost cutting measure. But, as Zhang shows, it can just as easily cause resentments that fuel militancy. Resentment at arbitrary and unequal treatment, for instance doing the same work as formal workers for less pay, in breach of the Labour Law, has provoked temporary workers into striking. The low pay of parts workers as against assembly workers was one of the main grievances in the high profile Honda strike in 2010. This was the most significant strike in recent years and initiated a wave of copycat strikes across the motor industry.

These workers are by no means powerless. Many supposedly temporary workers stay long enough to develop skill levels useful to their employers that may not be so easy to replace. The widespread use of “just in time” production leaves plants vulnerable to action by relatively small sections. And the workers know it: “In our work group there are 21 workers, and 12 of us are laowu gong [agency ­workers]. The whole shop has 500 workers and almost half are now laowu gong. If we stop working all together, the whole shop will stop”.

Relentless competition pushes the auto makers to attack the conditions of formal workers too. A heavy workload and increasingly stressful environment were among the grievances cited. The hierarchy of the workplace, with management earning up to 20 times the wage of the lowest paid in one factory, is another source of discontent. These workers can often win concessions without having to resort to strike action. But the distinction between formal and informal is becoming blurred, increasing the basis for unity.

More generally, the ongoing crisis of profitability is intensifying competition between capitalists, pushing them to drive down workers’ conditions and undermining the divisions they had previously fostered. For instance, the ongoing slowdown in economic growth is putting pressure on the state-owned sector as well, leading managers to adopt the methods of the private sector. SOE workers, long seen as a privileged group, are now facing the long hours and unpaid wages that have caused many migrant workers’ struggles. Early in 2016 the Ministry of Human Resources and Social Security announced plans to lay off nearly 2 million workers in the coming years. But this was already provoking a reaction. CLB reported strikes against lay-offs at Ansteel in Guangzhou and at the Jiangxi-based Pingxiang Mining Group. In other words the pressure of capitalist competition is forcing state sector workers to adopt the same tactics as their private sector brothers and sisters.

So the pressure of capital accumulation is tending to homogenise workers’ conditions. As William Hurst puts it: “the various segments of China’s working class have come to share the rhythms of working life, similar places on the social ladder, precarious economic livelihoods, and political mobilisation in the face of repression to a remarkable degree”. This is producing “a far more unified and potentially assertive Chinese proletariat than has existed for at least the last several decades”. Proletarianisation of the peasantry is also drawing the rural population into the working class.

Hurst goes on to argue that “protracted or broad-based class conflict” can be avoided by the “institutionalisation of class compromise and incorporation of workers into the polity”. The government has attempted to do this by, among other things, introducing a series of labour laws, minimum wage rates and trying to give greater credibility to the state-run unions. But these reforms are also constantly undermined by the imperatives of capital accumulation. For instance Lee shows how local government in Guangdong abandoned implementation of the 2008 Labour Contract Law when the onset of the global crisis threatened local employers later that same year.

Conclusion

Despite the transformation of the economy and the consequent changes in class relations, the Communist Party has managed to maintain its rule. It has done this by accommodating the new private business layer to become the party of an integrated state-private ruling class. To a lesser extent it can also appeal to the new middle class as a provider of employment and above all as the most obvious guarantor of stability.

In Mao’s time the CCP developed an incredibly intrusive system of patronage and surveillance of all aspects of workers’ lives based on the work-unit. This is referred to by Dickson as a deep “penetration of the state into society”. Dickson argues that the cooptation of capitalists provides a partial substitute, as a social base, for this earlier focus on workers and peasants. But this is a much narrower base that doesn’t provide anything like the same bulwark against opposition from below.

Since the suppression of the democracy movement of 1989, that opposition has come almost entirely from workers and peasants with students and the middle class largely quiescent. But the movement is still very uneven. The confidence and level of organisation shown by the 2010 Honda strike is the exception rather than the rule. So in a number of the cases cited in Hao Ren’s book China on Strike it was lower level managers who took the lead in taking action, ordinary workers being more frightened of losing their jobs and still deferring to their immediate superiors. In another case senior workers with “networks that helped to bring people together” formed the core of the strikers. But the newer workers gained confidence in standing up for their rights from the strike: “We would still choose to strike if all this happened again. We have more experience now”, the interviewee explained.

The description of most disputes as localised and self-limiting is largely accurate. But it doesn’t follow that this can only change gradually. The whole history of labour movements globally is one of long periods of little or no change, punctuated by sudden upsurges that develop a momentum of their own, the most obvious recent example being that of Egypt in 2011. Over the last 10 or 20 years millions of Chinese workers have shared the experience of striking or protesting against their employers. Some of them, often those in factories with better pay and conditions, have taken repeated action, developing a higher level of confidence. In the event of an upsurge in struggle this layer can act as a vanguard showing the way for the wider working class.

One of the first demands of any such movement is likely to be for independent unions as the existing unions are an arm of the state intended to act as a brake on workers’ struggles. The establishment of autonomous workers’ organisations would necessarily call into question the existence of the authoritarian state and raise the prospect of a democratic revolution. Or to put it another way, the working class is the social force that offers the best prospect of ending ­authoritarian rule.

However, the overthrow of Communist Party rule would not be the end of the story. An elected government under capitalism would very likely continue to push neoliberal policies, clashing with the expectations of a newly confident working class, and opening up the possibility of a struggle for a very different kind of society.

Simon Gilbert is a member of the SWP based in Oxford.

Notes

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