Chinese Conservatives Reverse Factory Reforms

CONSERVATIVE leaders here - intent on deterring anticommunist unrest among China's 136 million factory workers - are seizing power from factory directors and giving it to party loyalists, Chinese officials say.The conservative campaign reverses reforms begun in 1984 limiting party influence and granting factory directors unprecedented authority over production, promotion, hiring, and firing. The reforms significantly raised efficiency and output over the past decade. Now, however, "the power over management of the factory will no longer remain in the hands of factory directors alone," says Chen Ji of the All-China Federation of Trade Unions. The conservatives promote their campaign to "make workers masters of their enterprises" as one step in the urgent national effort to streamline factories. But the campaign is likely to backfire. By putting Marxist purity before profit, the effort contradicts market-oriented reforms needed to enliven factory workshops, diplomats and analysts say. At the very least, the renewed stress on ideology and party influence could revive the Maoist tenet of equal wealth for all, which has hobbled industrial growth for years, officials acknowledge. Despite the reforms of the last 10 years, state industry in China threatens to cripple the economy, with nearly 40 percent of factories operating in the red. They will sap the treasury of an estimated $17 billion in subsidies this year. Conservatives have targeted all of China's 440,000 state enterprises in their campaign, but it is not known how many factory managers have lost power to party officials. Also, only one in four factories have effective in-house party committees, according to Mr. Chen. And the success of the hard-line push is likely to vary greatly from factory to factory because of resistance from workers, factory managers, bureaucrats, and leaders who advocate reform. Hard-liners began strengthening the role of the party in factories after workers joined nationwide liberal demonstrations in the spring of 1989. Premier Li Peng told the party's central committee recently that it must continue to "improve the internal leadership of enterprises." "This means further exploiting the leading political role of party organizations ... and wholeheartedly relying on the working class," Mr. Li said. The party flexes its power primarily through workers' congresses, so-called representative bodies of employees in each factory that oversee the work and decisions of the factory manager. "The workers' congress is the highest organ of power in the factory," says Huang An, a spokesman for the Capital Iron and Steel Works, the official model for the conservative campaign. Managers "dare not and cannot appeal because there is no place for them to appeal," the China News Service reported last month. China's 370,000 congresses are apparently not holding back in their confrontations with management. They vetoed one-fifth of the 1.9 million proposals submitted by factory directors last year, says union leader Chen. "Formerly the factory director had the final say, but now he must follow the production commission and the workers' congress," says a report in Organization and Personnel News, a newspaper banned to foreigners but obtained by the Monitor. Chinese officials say the Capital Iron and Steel Works demonstrates how factories can avoid the strife between a factory's party secretary and its director as the workers' congress flexes Beijing-backed muscle. But some circumstances are peculiar to the ironworks: It is allowed to retain 40 percent of its profits compared to 10 percent in other state factories. By holding on to a high proportion of revenues, the factory director and party secretary have less cause to differ over spending than their counterparts in needy factories do. And finally, the director and party secretary at the steelworks are unlikely to quarrel: They are the same person. Still, some workers apparently do not feel they are the "masters" of one of China's most exalted factories. One brawny steelworker, standing with folded arms next to his workmates in the acrid, yellow haze outside a blast furnace, said, "There's been more consultation with us since the crackdown." "But the factory director and foremen still sing the same old song," he added.

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