Capitalist China and the Plight of its Workers

One quarter of the world’s working class is now in China

Last November, a little radical bookshop in Durham City welcomed Hong Kong labour activist Au Loong Yu to give a short talk. For those unaware, the People’s Bookshop is located beside Waterstone’s, in the narrow passage on the way to Vennel’s Café. Au had been giving a couple of talks around the UK about his recently published book on Chinese capitalism and it was arranged that he should drop by The People’s Bookshop for an informal talk and book launch. The small and sprightly Hong Kong activist was eloquent as he delved into his topic of how China has transitioned from a communist state to a capitalist one, and has in fact evolved its unique form of capitalism – ‘bureaucratic capitalism’. China has become industrialized and urbanized to the extent that one quarter of the world’s working class is now in China, such that Chinese workers’ struggle for labour rights in an oppressively capitalist China has implications for workers all over the world.

Firstly, how did China turn from a revolutionary communist regime into a decidedly capitalist one? To give some historical background, it was Deng Xiaoping – one of the core leaders of the CCP – who after Mao’s death in 1976 began the political and economic reforms that would eventually pave the way to capitalism. His 1978 reforms introduced market mechanisms and caused the Chinese economy to take off through exports and the opening up of trading relationships with other nations. Now in 2012, Au asserts that ‘China is not communist anymore – it has privatised everything except the media’. (Which is still heavily regulated so that both internal and external perceptions of China can be controlled.) He also points out that capitalism was willingly embraced by China rather than forcibly imposed upon it by Western powers – it was after all in the bureaucracy’s interests to do away with common ownership, as their positions of privilege make them want to maintain that privilege.

Secondly, why bureaucratic capitalism as opposed to simply capitalism? For yet more historical background, it was the bureaucracy – as opposed to a noble class that gains and passes on its privileges through inheritance – that ran the show in China for the past two millennia. It was bureaucratic officials who held positions of status in their local neighbourhoods, who were responsible for things like local education and law enforcement, and who took orders from the central imperial court but nonetheless had a fair bit of autonomy in their own policies. A powerful bureaucracy still exists today, with China’s public service being 50 million strong. What’s new about the modern bureaucracy is that it is now capitalist – today’s Chinese bureaucrats have their own business interests, which they can easily use their political power to protect. Just as Egypt’s military is not purely a military, having major business interests of its own, it is common in China to see strange relationships such as police departments also running hotels in the area. China’s bureaucracy is now a capitalist class in its own right, and Au quotes Maurice Meisner in saying that we now see ‘the coercive power of the state combined with the power of capital’, where bureaucrats can use their political power to monopolize market share and profits. It is a capitalist system, but one skewed heavily towards those with political power.

What implications does all this have for workers’ rights in China? For one thing, if the police department also owns the local hotels, then hotel workers cannot strike even if they are mistreated because local security will be brought in to beat them up. Politics and economics are intertwined in such a way that those without political power will not have economic rights either. Au dismisses the notion that there are socialist elements left in China – ‘once revolutionary cadres within the party are now capitalists. State owned enterprises have changed to state share-holding enterprises.’ China’s meteoric economic rise is maintained partly by keeping workers’ rights stifled – Au describes the Chinese state as ‘paranoid’ in their fear of worker organisations and freedom of speech, quipping that ‘they even spy on Hong Kong Oxfam.’ He also points to the discriminatory Household Registration System in China which essentially demotes peasants to second class citizens and bars them from permanently living or being educated in the city, which keeps them ignorant of their rights and therefore cheap to employ.

Nonetheless, he is optimistic that ‘the new working class will soon pose a challenge to the one party dictatorship.’ Strikes are frequent, and the 2010 Honda strikes were a milestone that saw small concessions being made to workers. Significantly, today’s rural migrant workers have better social mobility than their grandparents, being city raised and educated (albeit in very bad schools). There is less a mentality of fatalism and conformism, and while the previous generation of rural workers would’ve been happy to fill their stomachs, this generation is more likely to demand better working conditions such as ‘I won’t stand for 10 hours’ – previously standing was thought to raise workers’ productivity. With corruption being so endemic to the system and with trade unions themselves unwilling to protect workers, it will take a while for workers’ rights to be enshrined in law – the process of fighting for them, however, will certainly be interesting.

Au Loong Yu’s book, China’s Rise: Strength and Fragility, is available at The People’s Bookshop in Durham.

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