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No Way Out: A report on the human cost of China’s economic miracle

A new report by China Labour Bulletin and Canada’s Rights and Democracy reveals how the lives of millions of workers were thrown into turmoil during the wholesale, shock therapy-style privatization of China’s state-owned enterprises (SOEs) in the late 1990s and early 2000s. 

No Way Out: Worker Activism in China’s State-Owned Enterprise Reforms is based on five years of research, and draws extensively on CLB’s litigation in defence of worker’s rights. The report uses five illustrative cases to explore the many ways in which enterprise restructuring and privatization violated the human rights of laid-off workers; including their systematic exclusion from official channels of redress, the criminalization of labour protests, and the denial of workers’ rights to social security, to an adequate standard of living, to freedom of association and to freedom from arbitrary detention.

The government’s failure to implement clear policy guidelines for enterprise restructuring, combined with a lack of transparency, flawed auditing of company assets and widespread official corruption, left millions of workers out in the cold, with no job and barely enough income to support their families.

Huge numbers of laid-off SOE employees sought redress, both through the official Complaints and Petitions (xin-fang 信访) system and through the labour arbitration and court systems, but in most cases to no avail. Eventually, they were left with little alternative but to demonstrate publicly to bring their plight to the attention of local governments. However, many local officials perceived these worker demonstrations as posing a threat either to “political stability” or to their own positions, and saw to it that the activities of the protest leaders were banned or arbitrarily punished.

Disputes arising from the privatization of SOEs have typically dragged on for many years, sometimes even for decades, as local governments, the courts and official bodies such as the All-China Federation of Trade Unions failed to address the widespread injustices committed against workers in the course of SOE restructuring. Indeed, these long-running collective labour disputes amount to a festering wound at the core of China’s economic success story. Workers’ leaders who fought for the rights of their colleagues have been persecuted, silenced or imprisoned, while the grievances of those they represented have been all but ignored by the authorities and the laid-off workers have been left to fend for themselves in an increasingly cut-throat market economy.

The report concludes that now, more than a decade after SOE managers and government officials tried to take an economic shortcut and avoid paying the full social cost of enterprise restructuring, it is high time that all those in China whose livelihoods were ruined or derailed in the process were properly compensated.

The report is published as a PDF in English, French and Chinese.