Industrial unrest and mass unemployment have emerged as the chief threat to Communist Party rule in China, eclipsing separatist movements in remote provinces like Tibet and Xinjiang.

The economic slowdown in the world's second biggest economy has driven strikes to record levels.

Last year, there were nearly 2,800 strikes, on average about eight a day — twice as many as the year before.

And so far this year, the number is up 20 per cent despite a nationwide crackdown.

Jobs have also been shed as factories close or cut production.

When Foreign Correspondent visited an itinerant labour market in China's north-eastern rustbelt, laid-off workers exploded in anger.

"This is the most corrupt dynasty in human history," one man shouted.

Another said: "They say the happiness level of Chinese people is rising. Bullshit! You must come to a place like this to see the real China."

The strikes are often big and violent, as China scales back traditional industries like coal and steel.

Even in the relatively-prosperous south-east, plants are closing or being relocated inland or elsewhere in Asia in search of cheaper labour.

The unrest has threatened to disrupt China's plan to remake its economy into one driven by consumption, technology and services.

While worried authorities have now slowed the pace of job cuts in inefficient state industries, they still plan to scrap 6 million jobs in coal and steel.

Prominent labour activist Zhang Ziru, who has been involved in much of the labour unrest in China's south, had a dire warning for the Government.

"If China's system doesn't improve and the Government fails to make political reforms, the grievances and grudges will grow until society explodes," he said.

Zhang Ziru lives under constant surveillance. ( ABC News )

Activists silenced, detained, disappeared

Mr Zhang is a nemesis of Chinese authorities.

While most labour activists have been silenced or detained or have disappeared, he has continued to speak out.

He lives under constant surveillance and said he has lost count of the number of times he has been arrested.

But he is not deterred.

"Even if I'm falsely accused of disrupting social order, I will only get a three to five year jail sentence. I can accept that," he said as he shuttled between meetings of workers.

He wants workers to understand their rights and mobilise as a political force.

"Chinese workers should have a group of their own," he said.

"We need changes to the system and laws to solve social and political problems."

Mr Zhang is pitiless in his criticism of the Communist Party, which he said lost its mission long ago.

"Today's Chinese Communist Party does not represent the interests of the majority of Chinese people, just the wealthy minority class," he said.

"In many conflicts between capital and labour, the party naturally sides with capital."

'Why the Government is so corrupted?'

At a pop-up labour market in the north-eastern city of Shenyang, where hundreds of jobless men hustle for a single day's work, the Government is also the target of anger.

"The bosses exploit us. It's like a slave system," said Yao Mingjun, a coal miner for 33 years before he was forced into early retirement.

"In Chairman Mao's time, there was nothing like this market.

"If society was well managed, nobody would starve. We would all have work and food on the table. I demand to know why the Government is so corrupt.

"Why can't it give us a good life and a stable job?"