Reforms on Tap Evoke Hope, Worry


Not far from the Great Hall of the People, where China's parliament is in session, unemployed workers spread bedsheets along the sidewalk and peddle socks, underwear, plastic sandals, pirated movies and haircuts.

One block north, elderly men and women are occasionally seen milling around the Beijing municipal government compound protesting layoffs, unpaid salaries or a lack of heat or housing. The protests are small and quiet; placards and slogans are rare.

The peddlers and protesters have been on Chinese streets for much of this decade. But they will probably increase in number under a proposed program of economic liberalization and government downsizing now before the National People's Congress.

Under the proposed reforms--to be orchestrated by China's economic czar and probable next premier, Zhu Rongji--thousands of state-owned businesses will lose their government life preservers and be left to sink or swim. In addition, as many as 4 million government workers will lose their jobs with the elimination of 11 ministries.

As it did during the reforms of the late "paramount leader" Deng Xiaoping in the 1980s, the government is betting that the economic payoff from dismantling the command economy will outweigh the social discontent caused by rising unemployment.

Recent opinion polls and interviews with Chinese citizens indicate that the public is too deeply divided to give the reforms either a sweeping mandate or a crushing setback.

Much of the support for the reforms comes from China's emerging entrepreneurial class, which stands to gain from economic decentralization.


"Most business leaders have finally decided that they will profit more with the reforms than without them," independent pollster Victory Yuan said.

While the reforms will drive unprofitable state-owned enterprises into bankruptcy, Yuan said, many of the survivors stand to profit.

The abolition of several ministries that regulate industry will give managers autonomy to make decisions based on market conditions, not bureaucratic expediency.

Managers also know that, without the ministries' supervision, they will be freer to shed the burden of excess workers and line their personal pockets with state assets as their firms are privatized.

Workers facing the layoffs express a mix of resignation and resentment.

"Our firm is just not going to make money, so they'll have to cut us loose eventually," said Wu Yong, a young worker at a state-owned refrigerator factory whose obsolete products are shunned by consumers.


Wu said that his office building is piled high with surplus inventory and that his paychecks have been shrinking.

His bitterness about his disintegrating "iron rice bowl," as the Chinese call their socialist system of job security and welfare benefits, is diluted by the knowledge that many of his friends who were laid off are now making much more money in the private sector.

But for decades, Communist propaganda has taught workers like Wu that they are the "masters of their country" and as such are entitled to a leisurely job and lifelong housing and medical care.

Political dissidents are increasingly using the unemployment issue as a rallying point for anti-government activity. In recent days, dissidents have petitioned parliament, calling for independent labor unions, freedom of the press and the release of political prisoners.

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