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A view from Hong Kong

SOCIALISM TODAY interviews Alan Chen, a socialist in Hong Kong, who gives his view on perspectives for ‘the Chinese model’ and developments in Hong Kong itself, in the run-up to the WTO summit.

I think everybody has been impressed with the rapid economic growth in China, that has lasted 20 years, but when you look at what is behind this growth, it is fragile. One source of this fragility is the unheard of exploitation of workers and suppression of workers’ rights, which is really comparable to a ‘fascist’ state, if one wanted a comparison. Not only are trade union rights denied, but the state, including local government, has relied on paramilitary forces to suppress strikes and to make sure that workers can’t organise. But the workers are fighting back and there have been lots of spontaneous strikes occurring for several years now. The system itself is built on such inhumane exploitation, 13, 14 or 15 hours a day, that labour unrest could become ever more widespread, and if the resulting demands for higher wages and better conditions are successful, it would put a question mark over the Chinese model of development. This would be true at least in the southern part of China, where there is the Pearl River Delta model of development, which is highly export oriented and has low value added.

The second thing is that China’s rapid economic growth is financed very much by external and internal debt, we are talking about 20% of bad debts in the banking system. When you had 10% of non-performing loans in Thailand, you had the Asian crisis. In China, the 20% level of non-performing loans is really an element of crisis for the future. Of course, they can survive for the moment, because there is confidence that foreign direct investment will still flow into China, but I think that things will start working in the opposite direction soon, because of the coming of 2006, when the transition period to the accession of WTO is going to end. You will have the complete opening of the banking system, insurance, finance and so on, in addition to the opening of manufacturing and distribution in early 2007. It will exert tremendous competitive downward pressure on all Chinese domestic firms, especially the banks.

This is hard to tell, but China more and more looks like the weakest link of global capitalism today, because the Asian countries, the Tigers, very much rely on economic growth in China to continue their own growth. For instance, Taiwan and China are so integrated economically, that without China, Taiwan’s export earnings would be in the red. (Taiwan can still survive though, because there is a big surplus in her balance of trade with China, and the same goes for the Asian countries.) China is also buying huge sums of US bonds to prop up the dollar. The rise of China is more and more significant because it will soon be fifth or sixth in the world in GDP terms. Although in per capita terms it is in 100th place, in total GDP it is more and more a big player in global capitalism. But its growth is very much state led, built on huge amounts of debt and the completely inhumane exploitation of labour and also disregard of the environment.

However, the consequences of this are already appearing. Labour cannot any longer tolerate such exploitation. Ten years back, workers were more willing, in the sense that they did not object to overtime because they needed the money. They could work three or four years in the city and then they were able to save enough money to go back to their village to build a house and get married. For the rural migrant worker this was the paramount thing to do, since everyone, be it a female or male worker, had to contribute something to build a house in the home village. But because of the rise in prices, for the rural migrant worker, it is more and more impossible to save enough money to build a house over four or five years. They may save nothing even if they work seven or eight years and, as a result, there is much more discontent and hatred amongst migrant workers than there was even five or six years ago. This is why, when there are strikes, they are very violent. Therefore I don’t think the Chinese model is sustainable indefinitely, or even for ten or 20 years.

The problem here is that all these strikes are spontaneous and isolated, although the number of them is huge. For instance, in a small report in one newspaper it was reported that in one small county, where you probably have no more than 100,000 residents, in the last year they had 354 labour disputes. The main focus of the article was that although there were so many disputes they were able to settle them all peacefully. Imagine, it means that every day there is a labour dispute in just one small county, so the total number must have been very, very huge, at least in the Pearl River Delta. But linking them up is impossible at the moment, because this presupposes coordination, organisation. Rural migrant workers have had no preparation for creating genuine organisations. They have no collective identity as workers and, when they organise, they organise along the divisions of their home provinces: that you are from Hubei, you organise on a Hubei basis; you are from Sichuan, you organise on a Sichuan basis. So it is difficult to have a blanket organisation for everyone, because it was only four or five years ago that they left their home province.

I cannot go into details because it is a sensitive question. However, there are thousands of spontaneous strikes, but if socialists walk into them directly they will immediately be killed off, immediately sent to jail, and so, especially considering there are so few socialists in China, I think that the most important thing today for socialists is to be involved in cadre education, it is more important than a direct counterattack on the employers in one of these spontaneous strikes, because preparatory work is needed, so rural migrant workers can build genuine organisations.

State-owned enterprise workers have a collective identity as workers but their struggle has largely failed in the past ten years: 30 million state workers have already been sacked and they have in the main lost the battle. On the other hand, migrant workers are badly needed by companies, so they are in a position to fight, but given their subjective weakness, it is extremely difficult for us to be directly involved in organising. For the moment, I think it is necessary to attract individuals, open-minded, class-conscious workers, to attract them to socialism, to do serious agitation among them, no matter how small the numbers, how few of them. It is important to do groundwork according to a plan, to gradually train a dozen and then two and then three dozen. To train up a handful of locally recruited activists is important and possible. The second thing is to get international support.

Yes of course. Yes.

Well, it is over many things. They are not paying the minimum wage as stipulated by law, they are poisoning workers, they are forcing them to do overtime, they beat them up. These are common grievances that workers will bring up. One good thing is that, even compared to five years ago, workers today are more conscious of their rights, that they are entitled to a minimum wage and so on. So there are many many disputes originating from wages and overtime issues.

There will be, but maybe 80% will be foreign participants. Local mobilisation is very difficult, because the left has been marginalised in the past 20 years. In the early 1970s there were some left groups in Hong Kong but they are not very big today. So the preparation is mainly done by some small left groups in Hong Kong, but under the banner of trade unions and NGOs. I think that the local presence will be weak, but I think it will still mean something positive because of two things. One is that, in Hong Kong, trade unions have never come out against the WTO before. I think some socialists here have done good work promoting an anti-corporate, anti-globalisation agenda and have succeeded in convincing the trade unions to take part in this [WTO] preparation. This is significant in such a conservative region.

The second thing is more important. It is that this will be a good education for Chinese activists, for workers and farmers, because the Chinese government has always told the people that the WTO is a good thing. In December, if there are 10,000 demonstrating against the WTO, it will come across in China and it will be reported all over the world, on the internet and so on. It will be a good opportunity to tell Chinese working people that these are not some mad ultra-leftist guys who are against the WTO, but it is common farmers and workers who have come to protest against the WTO, which the Chinese government has always hailed as a great success.

A question is, will our government succeed in buying off all the important sections of the democratic movement, the petty-bourgeois democrats? In fact, the democratic movement will be going through a new stage soon, because in the past 20 years there has been no class differentiation in it. The so-called democrats don’t mention which class they are from and people don’t know who they are. Some socialists as well, they are just a handful of dinosaurs, who we don’t hear from.

I think a good thing is that the Hong Kong miracle ended, to a certain extent, after the Asian crisis [1996-98]. There will be economic upturns in the future, but it is the end of the Hong Kong miracle. For many years, even after the 1974 global downturn, Hong Kong experienced high growth rates and workers were accustomed to a two or three percent unemployment rate. This influenced their mentality up until the Asian crisis. After the Asian crisis, the same mentality existed, it did not go away easily, but there is more and more questioning. This is because the economy slowed by three or four percent, unemployment is more than five or six percent and wages have gone down by a third for many workers.

On the other hand, the petty bourgeoisie, the democrats, they are more and more being exposed as their class limitations are more and more revealed. They are even against the minimum wage, for Christ’s sake! And that is why the Democratic Party is losing support. It is clear they are losing significant support because they are against the minimum wage. Today, as opposed to ten years back, more and more workers, even the middle classes, at least some of them, consider that we really need a minimum wage, because wages have gone down a third in a year! So the mentality is changing and the Democratic Party is being exposed, more and more, as having a petty-bourgeois, or even a bourgeois character. This greater class differentiation may result in the upper layers of the petty bourgeoisie, or certain layers of the bourgeoisie, succeeding in reformulating a bourgeois party, which they did not have in the past.

On the other hand, a party based more on workers is not on the agenda in the foreseeable future, because the workers’ movement is in demise. There is class differentiation, but it is not happening very fast.

Not in the near future, no. To a certain extent the December event against the WTO will hopefully give a small push towards the left because, as I said, five years back when we went to educate the trade unions on globalisation and the WTO, they weren’t interested. They thought we were just nuts. That was five years back, whereas today, I have been doing lots of courses on globalisation, on the WTO and corporate greed and so on. There are many trade unions who raise interesting questions and like to hear what I say. That is a difference, but there is just a handful of them, so I don’t think that in the near future we can talk about a workers’ party.

It is a very dangerous course of development, very troubling, because the rise of China as a big capitalist state is very threatening for workers, as it creates a global race to the bottom. With the help of nationalism, the Chinese Communist Party will be more effective, in the sense that, if there is great labour unrest or a big internal crisis for the Communist Party, the highest leaders always have the option of making use of nationalism as a way out. There are various important sections among the bureaucracy who support such nationalist propaganda and there is lots and lots of talk about revitalising ‘our glorious imperial past’. That’s why we have programme after programme on TV telling the story of the great imperialist Chinese emperors. There is programme after programme like this about the great emperor of the Han dynasty, or even the great emperors of the Qing dynasty. The people love it, many people do anyway, because these programmes are all put out by government TV. The ruling class, the officials, they are consciously rewriting the old imperial ‘glorious past’ of the people. It is a dangerous, very dangerous course they are adopting.

I think they have multiple purposes. First of all, from a societal and historical perspective, nationalism becomes a kind of opium to fill in the political vacuum after the total collapse of socialist ideas, and important sections of intellectuals buy into this nationalism, because they have no more faith in socialism. Nationalism is becoming a viable ideology that they buy into, that they can conceive of. This factor should not be overlooked. Second, from the perspective of the leadership of the Chinese Communist Party, they are cautious. They are not making political propaganda as such, because they know that the Americans will monitor it and the Chinese Communist Party is very careful to maintain friendly relations with the United States. It does not want to anger the United States, so we are not talking about political propaganda, what we are talking about is cultural propaganda which is not that carefully monitored by the US. In this cultural area the official propaganda is really terrible, glorifying the great emperors of the past.

Nationalism is doing a favour to the Chinese capitalists, because they are using it not only to protect their position. This new leadership has an ambition, which is more and more clear, to secure a greater and greater market share of global capitalism, it is a very clear programme of conquering market share for big Chinese enterprises. However, the Chinese Communist Party is very cautious in creating big Chinese trans-national corporations. The big international corporations, the oil industry, television and even train and car making are not that successful, building them is not that easy. You may have already heard about PetroChina and Haier, and so on: big Chinese corporations who have great ambitions in the global race for profit, but who are very cautious. Chinese nationalism will help them to succeed.

To a certain extent nationalism affects workers, because it is very common when foreign reporters approach labourers who are protesting or striking, for them to say: ‘I don’t want to speak too much because I do not want to say bad things about our country in front of foreign reporters’. For Chinese people of the present generation, although they have no memories or experience of the anti-Japanese war, the legacy is still there. The CCP has been fiercely nationalist for many years, it has never been internationalist, so nationalism is a very important weapon in the hands of the bureaucracy, that is used to numb the workers, to tie them down, at the very least to weaken their will to fight back as workers.

We have still to see because China is a big book with tens of thousands of pages and we are only looking at one or two pages of the whole book! Until there is greater unrest, where much deeper things below the surface of society are involved, we cannot answer. It is a difficult question in China because the future course of developments is hard to define. There are bound to be crises, and they will not be that far off, but which direction they will go in, I don’t know.

It happened in the past, especially under Jiang Zemin, because at that time the Chinese Communist Party was still over-enthusiastically embracing western imperialism. I think that, at the turn of the new century, it is still not very clear as to which direction Chinese capitalism is going in, whether it is going to be more accommodating to US imperialism, with a dependent mode of development, or more self-reliant. Before the 1999 bombing of the Chinese embassy in Belgrade, Jiang Zemin may have been open to some kind of illusion that by accommodating to US imperialism, by opening up China to US capitalism, the US would be a friend of China. That explains why the Chinese government adopted a cautiously dependent neo-colonial model of development. For instance, the tax on local enterprises is 33% but only 15% for foreign capitalists. This is outrageous, not even India would do that, but China would do that, Deng would do that, because he was seeking a more dependent mode of development. But after the 1999 bombing, in the bureaucracy there was a call for a more self-reliant mode of development, with good reason: ‘Look here, from this building, they are bombing us’.

The US would not tolerate a big capitalist China, it was just an illusion, so from then on there was more emphasis on self-reliance. In fact, it seems that the leadership has already taken a decision that, sooner or later, and the sooner the better, there must be an equalisation of tax, this is a signal, among many others. For example, the new eleventh economic plan is emphasising giving more state money to promote national unity. That’s why in the past, when there was anti-Japanese feeling, the government just wanted to crack down on it, because they wanted to have a co-partnership with Japanese and US imperialism. But today, I think they know that it is not that easy.

As regards the Japanese, the government are trying to be more high profile in asserting the national interests of China and condemning the Japanese government for going to the Shrine [for Japanese war leaders]. They are more high profile today. Of course, they crack down on some people who are going too far, but important sectors of the bureaucracy, the nationalists, today feel comfortable that the new leadership is doing the right thing. So it is different from five or six years back, the situation is in flux, the CCP will react differently in the future and we don’t know what will develop.

Absolutely. Today, the environmental problem is part of the workers’ and farmers’ problem, because with high economic growth, huge urban developments and factories have been created and tens of thousands of hectares of arable land have been cleared, land which was taken from the peasants. The big factories pollute the air, the water, the underground water, everything, and the peasants and workers are poisoned. The environmental problem in China is very much a workers’ and farmers’ problem.

Yes, absolutely. Environmental demands, economic demands and political demands for democracy go together.

Even if it’s only just the beginning, we should really study this matter seriously. It is too early to talk of developing a concrete and mature programme, a complete programme for the future labour movement, because there are still many things that we don’t know. There are some elements of the programme that are already in place, but only parts, not the complete thing.

The key themes are: to give an evaluation of the rise of China as a big capitalist state; that China is full of contradictions; that, in crude terms, it is a huge country with a huge population and GDP, comparable to developed countries, with very developed coastal areas where manufacturing is growing quickly; but, at the same time, there are peasants still working with their hands; that the west of China is largely being forgotten in the course of modernisation. China is, I think, the most contradictory big capitalist state in the world and we have to look at the position of China in world capitalism today, in the 21st century. What it means for working people in China and in the world.

In a recent issue of New Left Review there was an interview with Han Dongfang, the director of the China Labour Bulletin Team. In fact, this China Labour Bulletin Team is politically supported by the American AFL-CIO, and that means, indirectly, by the American government. It has ambitions to build right-wing trade unions, if there is an opening, but for the moment they have no base in China, they are mainly based in Hong Kong. I don’t understand why the New Left Review is giving space to a right-wing trade unionist to put his case, the interview is really ridiculous. For many years the China Labour Bulletin Team has tried in their publications to convince workers not to revolt, not to take so-called ‘illegal’ action but, instead, to turn to their official trade unions for help. They have never been against privatisation of state enterprises and The New Left Review gives this coverage. Do they know anything about his politics? Of course, you can do interviews with the most right-wing people, if you have editorial notes or bring in some other commentators to have a balance from the left. But there’s no such attempt. We know that New Left Review has been turning to the right for a long time, but it is outrageous to read that interview. I think that the British left should say something about this.

This is ridiculous. The Chinese government is not anti-imperialist. It collaborated with the US, it is not going to defy them. Of course, as I have said, the Chinese government after the bombing [of the Belgrade embassy] has come back to its senses a little bit, and realises that the US is not really a faithful friend after all. However, even if they emphasise a more self-reliant line, they will not give up the prospect of developing capitalism in friendship with the US, because China has to rely on US imports, they are interdependent.