Vol. 73/No. 30      August 10, 2009

The widening social inequalities caused by the proliferation of capitalist methods in China, in the midst of a worldwide capitalist crisis, is generating tensions between toilers in city and countryside on the one hand and ruling petty-bourgeois layers on the other.

A group of 3,000 angry workers gathered in the company’s office building that morning after learning that the workforce at the steel plant would be cut to 5,000 from about 30,000 as a result of the privatization.

The protest then turned violent, according to China’s Xinhua news agency, as the workers rushed into the factory to stop production. Chen Guojun, a manager from Beijing-based Jianlong Group who had been sent to oversee the privatization, was injured and then beaten by a small number of workers who found him hiding. Trapped by workers blocking the roads on factory grounds and fighting thousands of riot cops with bricks, Chen was not taken to a hospital until later that evening, where he died.

The protest led to a halt in production at all of the factory’s seven furnaces, reported Xinhua. The privatization plans have been shelved.

The takeover of Tonghua Iron & Steel by the privately held Jianlong Group, one of China’s largest private steel companies, has been years in the making. In 2005, Jianlong bought a 36 percent stake of Tonghua as part of privatization of the provincial government-owned company. Following Tonghua’s posting of a $6.3 million profit in June, Jianlong made a bid to become the majority shareholder.

“The plan on a payroll cut disillusioned the workers as many of them expected the factory would work out of a financial plight, because the price of steel continues to rise,” said Xinhua.

Steel companies and speculators have sought increased profits as the demand for steel in China shot up propelled by a “stimulus package” launched by the Chinese government earlier this year.

At the same time, the Chinese government is in the midst of restructuring the country’s steel industry in order to run them “more efficiently,” which includes massive layoffs.

Similar moves are being taken in other sectors, throwing millions of workers onto the streets. A large percentage of them are “migrant workers” from the countryside who have swelled the size of China’s working class.

The growing social inequalities, unsafe working conditions, attacks on gains made by toilers after the landlords and capitalists were swept out of political power in 1949 (like selling off collective land and state enterprises), corruption, and discrimination against national minorities are all fueling protests by Chinese workers and peasants.

In 2005, the last year the Chinese government released statistics on “sudden mass incidents,” 87,000 of these protests took place across the country.
 
 
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