The Telegraph
Since 1st March, 1999
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Hiccups in reform road march
- Worried delegates lift veil on shutdowns & layoffs in New China

Beijing, Nov. 9: Bo Xilai represents the new generation of Chinese communist party leaders. He is believed to be the smartest of the pro-reform provincial leaders, an astute party mandarin and a ruthless opponent of political dissent.

Most important, he has the right credentials — he is the son of old revolutionary Bo Yibo, still a venerated name in Liaoning province in the northeast of China and elsewhere.

One would tend to think things should be going fine for Bo in New China’s march on the reform road. But they are not. And thereby hangs a different tale of China’s economic reforms — very different from the story that emerged from Jiang Zemin’s report card on reformist successes over the past 13 years.

Hours after Jiang’s speech, when Bo and other delegates from Liaoning sat to discuss the report in a chandeliered room on the second floor of the Great Hall of the People, they could barely hide their worries.

After the customary thanksgiving on Jiang’s speech, they held the mirror up to their wounds. And this in the presence of journalists — since the last congress, the CPC has opened some of the group discussions to the media.

The Liaoning discussion drew the largest number of mediapersons among five different conclaves in different rooms at the same time. The reason: for both the Chinese party and government, as well as foreign observers, Liaoning has recently been the most crucial test for China’s toughest new generation of reforms and their most severe pains. The leaders couldn’t push them under the carpet any more.

No other than one of Bo’s deputy governors, Zhang Xing Xiang, gave it in a capsule: “Liaoning has the country’s largest number of state-owned (and sick) industries, the largest numbers of laid-off workers and the largest number of retired (read “fired”) workers.”

The message from communist China to Calcutta’s reform-wary Marxist government which hasn’t been able to close even one of the 64 loss-making public sector units that add to Asim Dasgupta’s messy finances: in state-owned units in Liaoning alone, 489,000 jobs have been cut in just one-and-a-half years!

It is at Anshan city in the province where China’s showpiece steel unit — Anshan Iron and Steel Group Corporation — is located. Since 1998, 11,000 of the massive workforce of 139,000 have been “re-employed” (read “sacked”). Many more thousands are bracing to face the axe.

It is much the same story for Liaoning’s textile workers. “Liaoning may be an extreme case,” says a foreign diplomat, “but it’s happening everywhere. The textile ministry in Beijing had 500 employees two years. Today, the ministry barely exists in the form of a council with just 20 staffers.”

In steel, the countrywide picture is that 103 small steel units were closed down over a year, rendering 129,000 workers jobless. And the government itself announced this last April.

No wonder Liaoning has become a hotbed of protests by fired labourers. Only last week, several thousand sacked metal and textile workers demonstrated outside the office of the Liaoyang city government, sending out a signal to the leaders on the eve of the party congress.

“But those who predict that Liaoning will start the beginning of the end of either the party or the reforms is totally wrong,” says an analyst at the China Academy of Social Sciences. According to him, the critics are “deliberately” suppressing the fact that the reforms are opening up new roads to jobs, as they are downing the shutters on old and sick units.

Bo Xilai could, therefore, relieve the picture of gloom, at least partly, when he told the group meeting that the province had attracted investment worth $3.5 billion last year alone. This should give the macro picture of the country’s total new investment, from other countries, overseas Chinese and the new capitalists at home.

There is thus little hope of the reforms being stranded at Liaoning or elsewhere. As for the protests, the party bosses are sure they can take care of them.

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