A Model of New China

Long after a telephone pole fell on Lei Feng--a soldier so selfless he washed his comrades’ socks while they slept--he lived on as a pillar of virtue for the people to emulate. Now every May Day, China updates Lei Feng’s legacy and names a new batch of exemplary workers as ordinary heroes.

Recent model workers include Xu Hu, a tireless Shanghai plumber who worked into the wee hours unclogging people’s toilets for free. But this year, in a sign of the times, China will learn from businessman Bao Qifan.

Bao, a former longshoreman with thick unruly hair and unbuttoned shirt cuffs that flap from his suit sleeves, was first named a model worker in 1981 for his devotion to his job, country and communist ideals. Today, on May Day, he will be named one of China’s top 10 worker heroes, a model of the models, for leading the country away from communism and toward privatization.

Promoted from model worker to model manager, Bao now heads Shanghai’s largest port operation, built around a giant claw-like device he invented to safely unload cargo from ships. As it happens, the claw eliminated the need for hundreds of jobs--but probably saved dozens of lives.

Today, he’s not going to march in parades waving the flag of the nation and the Communist Party. “That hasn’t happened for 20 years,” he said with a laugh.

Instead, he’ll give his employees a day off with tickets to see “Titanic.” And then he’ll launch a new private company, providing technical services for shipping, where the employees will hold 90% of shares and the general manager will be democratically elected.

“You see,” he said with a broad smile, “the workers really are the masters.”

In a time when surging unemployment is one of China’s most pressing issues, Bao’s success can act as both a distraction and an inspiration for frustrated laborers. As China whittles down its inefficient state sector, more than 10 million people have lost their jobs and the family welfare benefits that were once part of the package. Nearly 10 million more may be laid off in the next three years, according to the Ministry of Labor.

Han Dongfang, a labor leader exiled to Hong Kong, has called the frustration of unpaid workers “a time bomb about to explode.”

Privatization of state-owned enterprises has been happening quietly for several years in China, but it was only last September that Beijing publicly embraced it as a way to accelerate reform. The elevation of Bao as a symbolic answer to China’s most ominous problems is important as an indicator of where China wants to go.

“In management of state-run factories, we have many problems: redundant personnel, oversupply for insufficient demand, and backward management,” he said at his headquarters overlooking Shanghai’s Huangpu River. “But as general manager who rose up from an ordinary worker, I understand the problems of a state-run enterprise. I think we are all model workers.”

His common touch inspires Lei Feng-like devotion. Just listen to the story of the bananas.

One of their major clients, a Singaporean company, shipped a boatload of bananas to Shanghai during a cold snap. The port workers worried that the fruit would freeze, Bao said.

“So from their own beds, they brought 1,100 quilts to put over the bananas to keep them warm.” They saved the bananas and won a long-term client. The client rewarded them with a $3-million cold storage system.

Bao may have inherited the spirit of Lei Feng, but his business sense seems to come from Adam Smith.

“The target of reform is to increase production and to improve the interests of the workers.”

He turned around a money-losing auto factory, his first attempt at privatization, after the workers bought 70% of the operation and had a stake in the system. Only then did the production--and the workers’ salaries--improve.

“Same workers. Same equipment,” he said. “But we went from a loss to a profit after we changed the system.”

Not surprisingly, Bao’s working model serves the government’s interests perfectly. Employees who become part-owners take the loss-makers off Beijing’s books and become responsible for disbursing their own benefits. The government is aiming to reduce the nation’s myriad state-owned companies to 1,000 conglomerates and let the rest sink or swim.

Bao, with his experience in shipping and his buoyant exuberance, is sure his companies will stay afloat.

“As general manager, I will try to make sure we have enough business for our companies,” he said. “As long as people work hard, we will have a job for them.”