Rioting Chinese Steel Workers Kill Boss Over Layoffs

Posted by: Frederik Balfour on July 27, 2009

Some 30,000 angry Chinese workers staged a riot at a steel factory in China that resulted in its boss getting beaten to death, underscoring just how quickly economic problems can stoke social unrest. The workers were protesting the sale of state-owned Tonghua Iron & Steel in Jilin province to a private group which they feared would lead to the loss of jobs. The manager, Chen Guojun, who died on Friday, had been sent to the steel plant by its new owners, Jianlong Group. According to the Financial Times, the unrest has prompted the government to scrap the privatization deal.

China’s communist leaders are obsessed with keeping social unrest under control, but the frenetic pace of economic transformation in the country often sparks uprisings. The clash between Uighurs and Han Chinese that caused nearly 200 deaths in Urumqi earlier this month was in response to labor problems at a factory thousands of miles away in Guangdong province. However it also layed bare the dangers of a fast growing economy that creates a widening gap between the haves [the Han Chinese] and the have-nots [the minority Uigyurs and Tibetans] that causes envy and resentment.

Chances are China will be faced with more violent incidents at the factory gates in the future. The export slump has led to widespread closures [in some cases with the bosses literally sneaking over the wall to escape the wrath of workers, as my colleague Dexter Robert chronicled in this labor story] and many industries are still experiencing a shake out due to overcapacity. The government has been pushing for greater consolidation, but mergers and acquisitions can turn very nasty if labor problems aren’t properly anticipated.

Multinational companies have often resisted firing workers for fear of backlash. It’s customary to keep factories open even when they aren’t producing, rather than risk having the plant looted or the foreign managers targeted.

Although China stopped publishing figures on mass incidents [read unrest] in 2005, Geoffrey Crothall, spokesman for China Labor Bulletin, and NGO based in Hong Kong that promotes labor rights in China, there were 127,000 such incidents last year, of which at least 25% were labor related. Others would be connected to environmental problems, land use disputes and local corruption.

Crothall says the working conditions at Tonghua were already bad before Friday’s uprising. Workers complained that neither the factory floor nor their dormitories were heated in the winter. And factory union provided no assistance. “State owned enterprises all have their official union but they are next to useless, they just represent management’s interest,” says Crothall. “They are out of touch with the workforce and have no power. In many cases workers left with no option but to resort to drastic measures.”


However most confrontations between labor and management rarely turn as violent as the Tonghua case, though in 2007 two people, a worker and a security guard died during a miner strike in Hunan.

Reader Comments

Mike

July 27, 2009 10:48 AM

Scary, internal unrest can often lead governments to look for external enemies in order to unify it's people.

This could mean the US will be dragged into a conflict between China and Taiwan (in addition to Afghanistan and any conflict between Isreal and Iran or Russia and Ukraine).

Maybe China will "make" North Korea the external threat so as not to cause a World War.

Westernfan

July 27, 2009 1:41 PM

Sounds like the labor unrest early in the development of organized labor in the U.S.

DanTe

July 27, 2009 3:34 PM

Looking for "external enemies of the State" won't work here. The inbred cadres have lied so much so often, that The People just doesn't believe them. This is why there is an increase in murderous attacks on police and military installations - even in Han China. No, continued privatization is what is needed. But the people will not be placated until all those corrupt commie oafficials stop flaunting their ill gotten gains in front of the people's faces. Make is a true privatization where everyone can benefit, and not just the corrupt few and you won't have the unrests you fear.

peace4all1

July 27, 2009 4:07 PM

It seems that this reporter doesn't know Chinese. Otherwise a better cause analysis should be provided in BW as was done in http://dailynews.sina.com/bg/chnpolitics/thebeijingnews/su/20090727/0009510862.html
In short, this private company withdrew its original capital investment of 50% of ownership and abandoned that steel company during the economic slump in the 4th quarter of 2008. Now the steel industry has been revived due to Chinese stimulus package and this private company with apparent collusion with the provincial officers gets permission to regain 65% of the ownership with the plan to replace the existing staff with cheaper employees. Injustice and unfairness were what triggered the massive company-wide strike. Anyone advocates democracy and labor's rights should be on the side of the striking Chinese steel workers.
While I condemn violence, any manager with monthly salary of U.S. $36,000.00 threats to fire angry works on strike, who are paid as little as U.S. $30.00 per month, bad thing will certainly happen in every country of this world.

blowfish

July 27, 2009 4:36 PM

Crothall says the working conditions at Tongua were already bad before Friday’s uprising. Workers complained that neither the factory floor nor their domitories were heated in the winter. And factory union provided no assistance. “State owned enterprises all have their official union but they are next to useless, they just represent management’s interest,” says Crothall. “They are out of touch with the workforce and have no power. In many cases workers left with no option but to resort to drastic measures.”


That very much speaks for itself.
Aren't we & Wallymart looking for better deals?

Texas_Dave

July 27, 2009 5:19 PM

ahhhh the ups and downs of capitalism...

Tom Hunter

July 27, 2009 6:37 PM

The Chinese govt is planning to blame it on USA. It says because USA is not importing as much as it used to, they had to layoof workers.

NC

July 28, 2009 10:55 PM

China must be a Republican's wet dream. Little recourse to courts, unions work for management, low pay, no more universal health care, and all backed by underground deals between the gov't and private industry.

@tomhunter

July 28, 2009 10:55 PM

Do you work for the Chinese govt? How do you know about their plans? Or do you work for the American govt as a spy against the Chinese govt?

rob

July 29, 2009 11:10 AM

This is natural. CHINA is a vicious dictatorship where workers are treated like cattle. INDIA is where the action is at, where democracy and growth and freedom rule.

David King

July 29, 2009 11:13 AM

This case is not a simple privatization case.

Corruption is the cause of employees' anger.

Based on what I learn from other media reports, the factory was sold very cheap to businessmen with family and business ties to officials.

The same company took over this factory before but could not make it work so it abandoned it. Government took over several years ago and thanked for the high steel price, the factory survived and made modest profits.

Then the company came back to buy the factory for a low price and planned to laid off every worker with the help of government officials to cheat their "pension" and "benefits"

@ "Rob"

July 30, 2009 9:25 AM

Take a sip of your uniquely made-in-india "soft drink" and dream on, as there is no income tax for cheating.

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