Concerning privatisation in China

By Gerard Greenfield, 20 November 1997

Comrades,

In response to Anna Weekes (South African Municipal Workers Union) message concerning privatisation in China, here is some more information:

First, the privatisation programme includes the sale of state-owned factories and processing plants, services, and public utilities. This involves 304 000 state enterprises. Many collective enterprises, such as Township and Village Enterprises (TVEs) are already effectively privatised, either through linkages between local capitalists and township and village officials or though joint ventures with foreign capital. Less than 7 per cent of the 25 million TVEs (employing 123 million workers) are collectively owned. (More about this in this year's _Socialist Register 1997_.)

Second, overseas fund managers are actively seeking out and buying up state enterprises which then sack well over half the workforce. These fund managers are using pension funds from the US and Europe - so workers' pensions in the US and Europ are being used in the ransacking of public enterprises and mass dismissals in China.

More information about privatisation in China can be obtained from _China Labour Bulletin_ published in English in Hong Kong. Their most recent issue carries an article of lay-offs in the state sector and ongoing demonstrations by dismissed workers who are demanding *the right to work*.

_China Labour Bulletin_ can be contacted at the following email address: clb@hkstar.com

In solidarity

Gerard Greenfield

Again on the issue of privatisation in China, with the sacking of 50 million workers.

I have written on privatisation in China in more detail in an article co-authored with Apo Leong. The details are:

Gerard Greenfield and Apo Leong, China's communist capitalism: The real world of market socialism, in Leo Panitch (ed.) _Ruthless Criticism of All That Exists. Socialist Register 1997_. London: Merlin Press/New York: Monthly Reviews Press, 1997, pp.96-122. If you are interested in getting a copy of Socialist Register 1997, please email our comrades at Merlin Press: merlin@merlpres.demon.co.uk or in Canada, Ferwood Press: fernwood@istar.ca

Also, the following is excerpted from a report I wrote criticising the World Bank's *new* vision of an *effective state*:

Despite the complexity of these issues - and a range of possible solutions - the World Bank's privatisation agenda continues to impose its 'one and only' solution, without public debate or participation. This 'one and only' solution has finally become policy in China. After years of insisting that state-owned enterprises be privatised, the World Bank's advice been realised. In May 1997 President Jiang Zemin outlined a privatisation programme which reflected the same recommendations made in the World Bank's report, _China's Management of Enterprise Assets: The State as Shareholder_, later released on July 25, 1997. In the privatisation programme outlined by in this report, there is a two-track process of dismissing workers from the state sector (understood in terms of saving money) and implementing a market-oriented social systems such as pensions. As a result of this policy, up to 50 million workers will be laid off over the next year. There have already been widespread demonstrations by workers faced with the destruction of job and income security. In a direct challenge to the new orthodoxy of 'labour flexibility', workers are demanding the right to work.

Although the World Bank is promoting the positive prospects of private sector growth and new employment, it is already clear that there will be a massive increase in unemployment. It is also clear that women workers will face greater discrimination and wage inequity in the private sector. In the World Bank's own report, Income Inequality in China, it is stated explicitly that equal pay for equal work for women is better in state-owned enterprises, though recent economic reforms have led to increasing inequality, as well as the forced retirement of women between 30 and 40 years of age. However, wage inequality and gender discrimination is recognised as being much greater in the private sector. Moreover, in the private sector there is an emerging bias against women of child bearing age. As workers' experiences in foreign-owned and foreign joint ventures have shown, there is no way of ensuring equal pay for equal work and freedom from discrimination according to gender. In fact gender discrimination, discrimination against women over 30, and the systematic undervaluing the work of women has become part of the work regime in the private sector.

This discrimination has become institutionalised in the foreign-invested factories in the 'economic miracle' province of Fujian, where women workers must show proof of sterilisation cards issued by family planning centres when they apply for jobs.