Political and Economic Situation in China on the 9th Anniversary of June Fourth

By Zhang Kai, October Review, Vol.24 issue 5/6, 31 December 1997

It is nine years since June 4th of 1989. Despite the official propaganda about China's high growth rate and political stability, unrest has been on the rise.

The 15th National Congress of the Communist Party of China (CPC) decided on speeding up the economic reform, in particular the reform of state-owned enterprises. The impact of the Asian financial crisis also has effect on China, reducing its competitiveness in the world market, and both its export and foreign investment have decreased.

The government policy in the past few years has been to subsidize the five to seven thousand big and medium state-owned enterprises by reduced interest rates, privileged loans, or loan-converted investments, while at the same time abandoning about 300,000 small enterprises with a labour force comprising the majority of the 100 million workers employed by state-owned enterprises to their own struggle for survival -- allowing them to be closed, sold, leased, or rescued by workers' own funds.

Data on 58,000 state-owned industrial enterprises monitored by the State Statistical Bureau show that in the first quarter this year, the income from sales had dropped by 3.3%, and stocking had increased by 13%. The reasons given are mismatch with market needs, lower prices due to general depression, and impact of the South East Asian crisis. (May 18 Sing Tao Daily)

One reason for the weakening of social consumption needs is the sharp increase in unemployment and drop in household income. A recent survey by the State Statistical Bureau shows that 39% of urban households in China suffered a conspicuous drop in family income in 1997. 20% of the low-income households had as much as a 60% drop in income. (April 1 Apple Daily) It is reported that urban population now comprises about 42% of China's population.

Unemployment is now an explosive issue. According to an official report, by the end of 1997, workers temporarily laid off in the whole country amounted to 11.51 million, which is an increase of 3.36 million, a 41%, over the previous year. Of this number, 7.87 million are from state-owned enterprises. Official estimate is that in 1998, another 6 million workers will be temporarily laid off, of which 4.5 million will be from state-owned enterprises. (May 14 Wen Hui Bao)

The inadequacy of the social security system causes the unemployment problem to aggravate. It is estimated that 30 billion yuan is required for the social security funds, but in fact, the government has reserved only 1.2 billion yuan for unemployment relief (including medical subsidy), and the actual disbursement is only 0.53 billion yuan.

On the other hand, social polarisation is acute. According to statistics, in 1993, there were 5.3 million households with an annual income over 50,000 yuan, comprising about 2% of the total households in China. That year, it is estimated that about 30 million people had ascended into the noveau riche. Though they comprised less than 3% of the total population, their private savings comprised 40% of the savings of all residents in China. According to a sample survey of the National Industrial and Commercial Federation, in 1993, private entrepreneurs owned on average 527,000 yuan of home and enterprise property. Some owned several million yuan.

When social conflicts become more generalized and acute, large numbers of demonstrations have taken place, protesting against layoffs and delayed payment of wages and pensions. Just in the Wuhan city alone, within six days in mid June, 4 incidences of worker protests had occurred. In the fourth incidence, 2,000 laid off and retired workers demonstrated in the main street.

In the face of growing social tensions in the domestic scene, the CPC leadership has attempted to improve its international image. Before and after Clinton's visit, China has and will become signatory to two United Nations clauses on human rights. This may be intended to be cosmetic, but may also offer some space for civil rights struggles within China. As for Hong Kong that has returned to China, the central authorities have not yet explicitly intervened in the local affairs, and certain degrees of freedom continue to be exercised. Worth noting is the anniversary of June Fourth, when 2,700 people marched in the street and 40,000 defied the heavy rains to attend a candlelight vigil, chanting slogans that demanded rehabilitation of June Fourth Incident, inquiry into those responsible for the massacre, and end to one-party dictatorship. In the first election of the Legislative Council after 1997, of the one-third seats allotted for direct election, 14 out of 20 were won by democrats. Such elections are still impossible in other parts of China, but will certainly impact on the political scene in general.

Signs of political unrest can be seen in the activities of activists in the movement for democracy. Well known veteran activists Qin Yongmin and Xu Wenli had written to the CPC Political Bureau, requesting permission for the publication of a samizdat publication Human Rights Observer. In another petition, Qin Yongmin requested the release of all people jailed for their demonstration in the 1989 movement. A group of worker activists had applied for the setting up of an autonomous trade union. Dissidents Wang Youcai, Wang Donghai, Lin Hui and others had applied to set up an opposition political party—the China Democratic Party—and were subsequently arrested. Their arrest incurred 100 dissidents from 19 cities to send a joint petition to demand their release and the improvement of China's human rights situation.

In Hong Kong and overseas, over 500 journalists issued an appeal in a newspaper in Hong Kong on the eve of Jiang Zemin's visit to Hong Kong on July 1 to demand the immediate release of a Chinese journalist Gao Yu who was sentenced to 6 years in November 1994 on an alleged crime of providing state secrets to overseas institutions. At the same time, 125 dissidents signed an open letter to request Clinton to meet with Zhao Ziyang when he visited China.

These moves may be just some small steps, but they demonstrate an audacity on the part of the ordinary people to make political gestures and come out in the open to express dissent. They signal a change in the general political atmosphere conducive to the rise of the people to change the present.