Taking the Bosses Hostage

Joshua Kurlantzick

  • Factory Girls: Voices from the Heart of Modern China by Leslie Chang
    Picador, 432 pp, £12.99, February 2009, ISBN 978 0 330 50670 0
  • BuyCapitalism with Chinese Characteristics: Entrepreneurship and the State by Yasheng Huang
    Cambridge, 366 pp, £15.99, November 2008, ISBN 978 0 521 89810 2

The riot started, last December, in the wake of a simple pay dispute at a small Chinese factory that manufactured cheap suitcases. Orders had been dropping, and the factory closed down without warning, leaving wages unpaid. The workers started to smash up the factory, and looked for managers to attack. The police arrived on the scene, and attempted to restrain the workers by locking them inside the factory compound while the managers offered them a deal – part of their back wages would be paid if they left town. This strategy failed; according to an account in the Washington Post, more than a hundred workers fought their way past the police, scuffling with the security forces and chanting: ‘There are no human rights here!’

To outside observers used to thinking of China as a repressive state, such a protest might seem surprising. But even more surprisingly, the riot erupted in Dongguan, a humming industrial city in the Pearl River Delta, the manufacturing hub of southern China. The delta, which has cultural and commercial ties with Hong Kong, is the world’s workshop. Nearly every major Western company dependent on overseas manufacturing sources products in the low-slung factories that line its highways; inside, teams of young women, sought after for their manual dexterity, put in long hours assembling everything from children’s toys to computer chips. According to one estimate, the Delta, home to just 60 million people, produces 5 per cent of the world’s manufactured goods.

Yet even the Pearl River Delta can’t immunise itself against the wave of protest sweeping across China as the global financial crisis batters the country’s economy, which is heavily dependent on exports to Western nations. Most Chinese economists believe the country needs to grow by at least 8 per cent each year to absorb those entering the job market, from peasants migrating to big cities to young people finishing university. But the Royal Bank of Scotland’s economic research unit predicts that this year China will grow by only 5 per cent, and others argue that it may already have fallen into recession. Twenty million migrant workers have lost their jobs since the beginning of the crisis, and more than 60,000 factories have closed over the past year, as orders from Western companies have plummeted and foreign investment has collapsed. Government officials privately estimate that the unemployment rate now stands at its highest since 1949, the year the Communist Party took power.

The downturn could prove the first real threat to the regime since the 1989 Tiananmen protests. It challenges the wisdom of Beijing’s economic model, and threatens to break the implicit bargain between China’s middle classes and its rulers, whereby the regime will deliver high growth rates, and in return, the middle class, who benefit most from growth, will tolerate authoritarian government. In recent weeks, protests have erupted in other manufacturing cities: fearing lay-offs, workers are taking their bosses hostage, marching through the streets and smashing up factories, police vehicles, and even Communist Party offices. Some protesters have begun to organise across provinces, realising the party’s greatest fear, since it remains the country’s only truly national institution and is keen to prevent any other group from following suit. Over the winter, tens of thousands of taxi drivers, in a number of provinces, abruptly went on strike, to protest against the high price of renting their cabs. Last autumn a group of prominent intellectuals published Charter 08, an online manifesto calling for an end to one-party government and the establishment of a real rule of law. Within weeks, it had supposedly gathered more than 10,000 signatures, even though signing it potentially meant arrest. ‘It’s not that there is no anger there,’ Li Datong, one of China’s best-known political analysts, told me when I met him in Beijing. ‘The government has been skilful in convincing the middle class it’s futile to protest . . . but you only need one spark for that to change.’

In 1979, China would have been unrecognisable to someone visiting big cities like Shanghai today. What is now the eastern part of Shanghai’s commercial district, Pudong, was then just a long stretch of rice fields. Abandoning Mao’s constant internal warfare and his belief in state dominance of the economy, Deng Xiaoping launched what would become known as ‘reform and opening up’. He disbanded farming communes, began to allow private businesses and encouraged ordinary Chinese to embrace a capitalist economy, though he was always careful to describe his new ideology as a form of socialism. With Deng’s blessing, local governments started investing in light industry and other private enterprises. Realising that China desperately needed large-scale foreign investment, Deng created special economic zones in southern China to showcase to investors the country’s new openness and the availability of cheap labour.

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