China's Line of March

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CONTENTS page Foreword

2

1

Political and economic background

3

2

Economic reform and 'opening up' The 11th Five Year Programme Energy and the environment

6 8 9

3

Work and trade unionism The All-China Federation of Trade Unions Terms and conditions of employment Health and safety Labour relations and industrial action

13 13 15 16 16

4

Social development Crime and policing

19 21

5

Women and the one-child policy Population control

22 23

6

Foreign and military policy

24

7

Democratic reform National and ethnic rights – the Uygur people Islamic fundamentalism Religious freedoms Gay rights

25 25 26 27 27

8

The Communist Party of China

28

9

Conclusions and prospects Is China socialist?

Old and new contradictions The trade unions Economic relations Democratic reform Developing links between Britain and China

30 30 31 34 35 36 36

Boxes Beijing Administrative College Xi'an Hi-Tech Industries Development Zone Kami Chemical and Detergent Factory Beijing Hyundai Motor Company North-West No.2 Cotton Group Company Urumqi No.1 Primary Middle School Wanshou Hotel CPC Branch

5 10 12 14 17 20 33

China's line of march | 1

Foreword

T

he Communist Party of Britain sent a four-person delegation to China in April 2006 at the invitation of the Communist Party of China’s international department. The delegates were CPB general secretary Robert Griffiths, industrial organiser Kevin Halpin, women’s organiser Emily Mann and Morning Star editor John Haylett.

This was our party’s first official visit to China since 1997, when John Haylett was then also a member of the delegation.

The most recent initiative arose in the course of growing contact between the CPB and the embassy in London of the People’s Republic of China, and between the two parties directly.

These relations reflect at least in part the vigorous efforts of China’s Communists to strengthen relations with Communist and workers’ parties around the world in the wake of the collapse of the systems in the Soviet Union and eastern Europe.

It is no secret that in the serious disputes between the Communist Party of China (CPC) and the Communist Party of the Soviet Union from the early 1960s, Britain’s Communist Party made a critical assessment of policy developments in China which placed our party broadly in agreement with the stance of the Soviet party. At the same time, we emphasised the need to resolve ideological and foreign policy differences through dialogue and with the aim of restoring international Communist unity. We also expressed our solidarity with those forces in the CPC and China’s trade union movement who were struggling to defend the democratic norms of party and public life and the gains of socialism.

The Communist Party of Britain was therefore pleased to send a high-level delegation to China in April 2006 to learn first-hand about the important developments occurring in that country today. We believed this to be particularly valuable when these developments are now being reported so intensely by Western – and therefore mostly anti-Communist – mass media Before the visit, our hosts had asked us to indicate where we would like to go, what we would wish to see and with whom we would want to have discussions. Our requests were met without reservation. We received every assistance from central and local officials throughout our nine days in China; but we were also free on numerous occasions to go out unescorted and meet Chinese citizens, although the language barriers frequently made conversations difficult where not impossible.

This report reflects our experiences in China, especially what we saw and read while there, including our formal and informal discussions with CPC members and other officials and nonparty people. It is not intended to be a thorough and comprehensive survey or analysis of all the significant developments taking place in China. After all, we cannot lay any special claim to greater knowledge or understanding of matters we did not observe or discuss while there.

Nevertheless, the delegation can report on our first-hand experiences although our comments do not necessarily reflect the views of the Communist Party of Britain. Our party's intention is that this pamphlet promotes understanding and stimulates a more informed analysis of China in the labour and progressive movements in Britain and internationally.

Robert Griffiths Kevin Halpin Emily Mann John Haylett

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August 2006

Political and Economic Background

T

he Communist Party of China (CPC) was founded on July 1, 1921. In its early years, the party fought alongside the Kuomintang in an uneasy alliance against the country’s feudal warlords and their foreign imperialist allies, until the Nationalists violently turned on the Communists in Shanghai in 1927. This treachery provoked a civil war to which was added – from 1931 – a struggle for national liberation against the brutal occupation of eastern China by imperial Japan.

Recognising the reality of China’s position as a semi-feudal society, the CPC sought to work out a new theory of democratic revolution to be carried out by an alliance between the workers and a propertyless peasantry. In 1945, at its 7th congress, the CPC incorporated the principles of ‘Mao Zedong Thought’ into the party’s political and philosophical outlook. In essence, these principles can be summarised as: seek the truth from facts; adopt the road which proceeds from the people as its starting-point; be independent. Mao Zedong Thought included a theory of socialist construction which guided the establishment of socialism in China; and a theory of military construction which through the People’s Liberation Army could achieve and safeguard the revolution.

Mao Zedong Thought also emphasised the importance of policy and tactics including the need for maximum flexibility and the inter-connectedness of economics and politics. It aimed to build a scientific culture to serve the people, one which had national characteristics and which embodied the motto: ‘let a thousand flowers blossom and schools of thought contend’.

Following the revolution of 1949 and the proclamation of the People’s Republic, the Chinese Communists led by Mao Zedong set about modernising a vast country containing one-sixth of the world’s population, most of them living in the countryside in the most backward social conditions. With assistance from the Soviet Union, programmes of industrialisation and urbanisation were launched in the 1950s.

Then, in 1958, Mao instigated ‘the Great Leap Forward’ during which the whole population was urged to participate in industrial production of any kind, however small, even to the point of smelting every scrap of metal possible in home-made furnaces. In some primary sectors of the economy, production expanded rapidly at least for a time. But in many others, quality was sacrificed for the sake of quantity with chaotic and ruinous results.

In 1966, Mao and his closest allies launched the so-called ‘Cultural Revolution’ against those in the party and public life who, it was claimed, wanted China to take the capitalist road of development. As young Red Guards spearheaded the purge of alleged revisionists and renegades on a mass scale, the country descended into anarchy as economic development ground to a halt.

In discussions with the CPB delegation, Vice secretary-general Gao Yongzhong of the National Society for Party Construction Studies declared that, while still revered for the achievements of earlier years, ‘in his later years Mao Zedong made mistakes’. The Great Leap Forward and the Cultural Revolution were ‘explorations’ of the road to socialism for which Mao bore major – but not sole – responsibility. According to Gao, the Great Leap Forward showed a ‘lack of realism about the country’s economy’.

Comrade Gao also made the important point that Kruschev’s condemnation of Stalin in 1956 had a great influence on Mao. It led the Chinese leader to conclude that Kruschev was a ‘revisionist’ and that right-wing revisionism posed the main danger to Marxism-Leninism in the international and Chinese communist movement. Hence the policy to wage the Cultural Revolution against this danger. So, in Gao’s view, the revolution began in 1966 ‘with good intentions’, but it adopted wrong measures to deal with the problem. Both the Great Leap Forward and the Cultural Revolution proved to be ‘costly mistakes’ which ‘set back the CPC on the road to socialism’. With the ‘Gang of Four’ threatening to take complete power and Mao dying in 1976, the CPC and China had to be ‘rescued from near disaster’.

Today the Chinese party characterises the Cultural Revolution as ‘counter-revolution’. Yet the China's line of march | 3

CPC makes a balanced assessment of the Mao period overall. Mao’s strategy to establish the People’s Republic through the application of Marxism-Leninism to China's conditions is still praised, as is his subsequent leadership of the effort to build the 'New China', while the follies of his later period are condemned. His memory is not defiled, he has not become a ‘non-person’ and his image is to be seen in major public buildings and on the latest editions of China’s banknotes.

Having lost credibility during the decade from 1966, the Chinese party faced the major task of regaining the confidence of the masses, including those workers in the towns and cities whose factories had been disrupted and their unions purged.

In 1978, new leader Deng Xiaoping insisted that the main contradiction within China was not that between classes, but between the people’s increasing material and spiritual needs on the one hand, and China’s low level of economic development on the other. What is now called Deng Xiaoping Theory therefore advances the following propositions: ■ The road to socialism in China will have its own national characteristics.

■ China was – and still is – only in the primary stage of the development of socialism, a stage which will last for at least 100 years.

■ The objective must be to end exploitation, reduce inequalities and produce common prosperity and common wealth for all.

■ Concentrate on economic development.

■ Science and technology are the primary forces of production.

■ Reform is a kind of revolution and should aim to develop productivity.

■ Public ownership should be maintained as the mainstay of China’s economy ■ Remuneration should be in accordance with one’s labour.

■ A market economic system should be developed but only in keeping with the previous propositions.

■ Co-operation between the different political and social forces should be strengthened in order to develop socialist democracy.

■ Opening up China’s economy to the outside world is vital for its rapid development – closing down will lead to backwardness.

According to Deng, it was essential to uphold four cardinal principles: first, the socialist road (he insisted that ‘poverty does not equal socialism’ and urged that ‘groups and regions of the population should be encouraged to become wealthy as the driving forces to bring others out of poverty’); second, the people’s democratic dictatorship (based on unity between workers, farmers and intellectuals); third, the solidarity and cohesion of all China’s peoples whatever their ethnic differences and the unity of all who ‘patriotically support socialism and the reunification of China’; and fourth, the leading role of the CPC and adherence to Marx-Lenin-Mao Zedong Thought.

Study of the Chinese party’s long history is regarded as very valuable at the Beijing Administrative College. Mao had argued that the party becomes more mature as the result of both its positive and its negative experiences. The college bases itself on the motto: ‘Let the facts speak, and we will seek the truth’. Achievements should be fully recognised, while not avoiding the discussion of difficulties including the ‘twists and turns’. In 1981, the CPC central committee had promulgated an important decision on the settlement of historical issues based on letting the facts speak for themselves, and this policy now forms the basis for many teaching materials.

‘Lessons from the Great Leap Forward and the Cultural Revolution are very important for us’ according to the professor in party history at the Administrative College, and a large number of researchers have been engaged in studying these periods. One lesson in particular had been learnt by the CPC as a whole – the need to switch the party’s line from one of emphasising the struggle between classes within China to that of concentrating on the task of economic construction.

Thus while professional experts in party history and party building engage in in-depth analysis of the past, courses at the Beijing party school now devote more time and resources to party 4 | China's line of march

construction. ‘There is no need for every cadre to be a professional historian in the area of party history’ was how one such expert put it to us. Students on short courses in particular are told that the party should move on from the negative periods; it must look forward rather than be obsessed with historical issues. Modernisation and construction are today and tomorrow’s key tasks.

BEIJING ADMINISTRATIVE COLLEGE In order to argue effectively for its policies and perspectives, CPC comrades need to develop their levels of Marxist understanding.The Beijing Administrative College is in effect a ‘Communist university’ organised under the authority of the Beijing Municipal Committee of the CPC. It has 400 staff of whom 200 are teachers or research workers, 120 of them full-time and 80 to 90 of them women. They provide courses in public administration, industrial and commercial management, philosophy, law, economics, social sciences,party construction,history and foreign languages, including to degree level.Threemonth courses are also run on the role of the party, together with studies into problems put forward by cities and regions.

Training is provided for high-ranking and intermediate municipal government officials in accordance with municipal rules and the party constitution, with 1,500-1,600 students from the Beijing city authority last year undertaking courses lasting for one week, 10 days or from between one and four months.The main content for many of the short courses is party theory and policy.

Most students are from the Beijing area, but they also include officials from outside who have been appointed by the CPC to government departments.Their fees are paid for by party branches, regional and city committees and from the central committee. Other provinces, regions and cities have their own party schools under the leadership of the appropriate party committee.

Adult education courses are also offered to the general public, attracting 19,000 students last year. A postgraduate programme provides a masters degree in 12 different fields for, at present, 50-60 students.

The College also engages with the problems of gender inequality in Chinese society, which are the product of historical attitudes to women. Indeed, women are themselves under-represented in the College, reflecting the proportions of women in the party and municipal administration rather than in the population as a whole. Efforts are being made to reflect the role and position of women, with courses organised in conjunction with the All-China Women’s Federation who provide about 80-90 students for special courses at the school each year.

The party school publishes a regular journal in Chinese (although the contents page is also in English), Expanding Horizons, which circulates among students, staff, other HE institutions, cadres in government agencies and other party schools. It is also published internationally.

The number of researchers at the College points to its practical role in studying and solving social, economic, organisational and perhaps even political problems.Teachers and assistants set up taskforces and conduct research on topics proposed by the Beijing party committee and municipal government, some of which is subsequently published along with the product of self-directed research (notably on party history and construction). The institution is clearly a power-house for policy development and change.

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Economic Reform and ‘Opening up’

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he Cultural Revolution left many millions of people in the countryside with no means of support, prompting the 1978 CPC congress to adopt the strategy of reform and marketisation.

This began in the countryside with the inception of the ‘household responsibility system’ combined with greater security of family-based land tenure. Thus the peasant commune system was in effect dismantled in favour of family units. The compulsory state procurement of agricultural products was reduced, as farmers were permitted to keep and sell a bigger share of their output. At the same time, town and village enterprises were encouraged to absorb labour shaken out of the old system, as millions of people became free to leave the land. New problems of land redistribution and inflation later emerged, while many rural enterprises were opened up to private capital (notably from non-mainland Chinese sources) with positive and negative consequences.

A second industrial revolution was urgently required to avoid widespread famine and destitution but, unlike Britain in the 18th and 19th centuries, China had no slave trade nor colonies to set it in motion. Instead, special economic zones were established in south-eastern China in the 1980s, offering inducements to outside capital investment, much of it organised through Hong Kong.

Following a tour of southern China in 1992 to assess the performance of the 1978 reforms, Deng Xiaoping set out the main objectives of renewed economic and social development: firstly, to develop society’s productive forces – especially technology – including through a strategy of ‘opening up’ to the world in terms of investment and trade; secondly, to raise the living standards of the people; and thirdly, to end exploitation in the long run, but for now to use the tax system (eg. on luxury goods) to reduce inequalities. In order to guide progress towards these aims, the CPC 14th congress adopted the aim of building a ‘socialist market economy’ and elaborated a theory of development in response to the key questions: who is development for, why and how?

The main propositions of the party’s scientific outlook on development are: ■ Economic construction is always at the core of development.

■ The need is for the rapid, sound and co-ordinated development of China’s economy and society.

■ Development must be co-ordinated between the rural and urban areas; urban development must be made the driving force in society; and industrial development the driving force in agriculture.

■ Development must be co-ordinated between the regions, taking advantage of the different characteristics of different localities, and closing the regional prosperity gap.

■ Development must be sustainable, based on the relations between human beings and nature, its environment and resources.

■ Opening up (to the outside world) and reform are essential features of development, with coordination between the national and international aspects.

■ Development must put people first, proceeding from the fundamental interests of the majority of the Chinese people.

■ The above propositions require the strengthening of the ruling capacity of the CPC and the development of the advanced character of party comrades.

It is on this basis that the ‘opening up’ policy was extended into many more sectors and regions of the Chinese economy, hugely boosting inward investment and international trade from the mid-1990s. The resulting enterprises were and are either privately owned (notably when the capital is from non-mainland Chinese) or – more usually – jointly owned and controlled with an equal number of foreign and Chinese state-appointed directors on the company board.

Soon afterwards, the Chinese government mounted an extensive programme of redundancies and closures in those state-owned enterprises which were operating at a loss and could not adapt

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to the changing conditions. Many such enterprises were unwilling or unable to invest adequately in health and safety measures, thereby putting their employees at greater risk. As a result of the drive against deficit funding, unemployment in the state sector soared along with the need to organise mass retraining. At the same time, the CPC and the trades unions had to explain why wages should be curtailed in industry – including in profitable enterprises – in order to redirect at least some of the surplus into further economic development.

On the basis of research, the CPC central committee also decided that state-owned enterprises were spending too much time and money on social provision such as housing, health insurance, canteens and sports facilities. These were to be reclassified as commodities which the individual worker should have the responsibility to access and pay for. In particular, company housing would be sold off to workers, with unions negotiating terms during the change-over. Some companies subsequently decided to offer assistance to workers who found themselves in need of accommodation. The CPB delegation expressed its concern at this turn away from social housing provision, pointing to the gross inequalities and inefficiencies of the private housing market in Britain.

Enterprises would continue to provide industrial and occupational training to enhance skills, promotion and pay.

The other strategic objective of the CPC and the government was to extend the apparent prosperity of the coastal belt to the country’s backward areas. In particular, the transportation of goods is an enormous problem when even an aeroplane journey from one side of China to another can take more than five hours. Without transport infrastructure, whole regions of central and western China would remain in isolation, yet many of these autonomous regions and provinces have had no finances to build roads and motorways. One solution has been for the most developed cities to ‘sponsor’ the construction of a specific section of highway, often through desert or semi-desert conditions, sometimes in the face of local objections to such use of municipal funds.

Over the past decade, about 25,000 miles of expressway have been laid across China. When the network is completed by 2010, 40,000 miles will link all those provincial capitals and cities with a population above half a million. This will assist the freight industry, where 60 per cent is carried by road, but the intention is also to place all citizens of eastern, central and western China within half an hour, one hour or two hours drive of good-quality roads.

New and faster railway routes are being built in order to create a national system which links the main cities across China. Work on an 820 miles high-speed (220 mph) rail passenger link between Beijing and Shanghai begins this year, to be opened in 2010 and cutting journey time by 8 hours. The old line will be given over to freight.

The new 710-mile railway line across the ‘roof of the world’ between Golmud in Qinghai Province and the Tibetan capital Lhasa is a miracle of engineering which will help end Tibet’s isolation and severe underdevelopment. Yet the opening of the line was greeted in Britain with headlines about ‘cultural genocide’ and ruining Tibet’s eco-system, with British, US, Canadian and local demonstrators staging protests in Beijing and elsewhere. This despite the fact that Tibetans comprise 95.93 per cent of Tibet’s population, that 1.5 billion yuan (about £100 million) has been set aside for environmental protection along the route, that passengers can now commute directly between Lhasa and Beijing, and that the dependency on carrying freight by truck along often impassable roads has been broken.

Of course, extending road and rail links through Tibet also serves to undermine the politics of separatism, upholding the Chinese Communist Party’s policy of maintaining the unity of China by ensuring that all the people of the republic share the benefits of economic growth and social progress.

Vice-minister Liu Shijin of the State Council (ie. the government’s) Development Research Centre summarised for us the three main achievements of the reform and ‘opening up’ process since 1978, and especially since the pace of development accelerated in the early 1990s: an average annual growth rate of 9 per cent a year over 27 years; a big improvement in urban living standards; and a reduction in the number of people living in poverty from 200 million at the beginning of the last Five Year Plan in 2000 to around 120 million today.

China's line of march | 7

The extraordinary extent of China's recent urban and industrial development was evident everywhere the CPB delegation went. Spectacular construction projects employing a wide range of architectural designs have transformed large areas of cities such as Beijing, Xi'an and – on a lesser scale – Urumqi. It is estimated that half of the entire world's construction work by area is currently taking place in China.

The World Trade Organisation which China joined in 2001 confirms that both gross domestic product and per capita production have grown ninefold since 1978 and that ‘the proportion of China’s population living below the poverty line ($2 a day) fell from nearly 73 per cent in 1990 to 32 per cent in 2003’. This means that some 400 million people have been lifted out of poverty in just 13 years.

Nevertheless, Liu emphasised that despite the successes, ‘China is still a developing country and will remain so for a long time’. Indeed, even now the average annual GDP is only at the level of about $1,700 (less than £1,000) a head.

He was frank about the extent of the problems still to be tackled. In particular, Liu highlighted the large disparities of income between different sections and regions of the population. China’s level of inequality as measured by the Gini coefficient (where 0 represents equal distribution of wealth and well-being while 100 means the maximum possible inequality) was 44.7 in 2001, the latest year for which comparable figures are available. This is better than Brazil or South Africa on 59, but more unequal than the Scandinavian countries, the Czech Republic and Slovakia (all on 25), India (33) and even Britain (36).

Liu also highlighted other problems: the environmental damage being done by rapid, largescale development; shortages of key resources needed for further growth; over-capacity (which has existed in the automobile component, electronics and construction industries); relatively low levels of technology; and the financial risks arising from China’s position as the world’s third biggest exporter, whereby it now faces trade barriers to further expansion.

In addition, other officials we met referred to the 180 million migrants from the countryside who were now in urban areas and looking to be absorbed into paid employment. Director-general Liao Dong of the CPC international department also pointed to the continuing losses made by state-owned enterprises (£7.5 billion in 2005), and rising energy and raw material prices (a government ‘windfall’ tax on oil company revenues was introduced on April 1 on crude oil sales above a price of $40 or £24 per barrel) The 11th Five Year Programme In March 2006, the National People’s Congress – China’s supreme legislative body – approved the country’s 11th five-year plan drawn up by the State Council. It has, however, been renamed a programme because its remit goes wider than purely economic matters. Moreover, it focuses on the general direction of development rather than on detailed targets in seeking to apply science to production across the whole economy. Significantly, too, it does not concentrate excessively on securing GDP growth, but emphasises social development and the need to ‘build a harmonious socialist society’. Some elements of the programme are being introduced in 2006, others have still to be formulated in detail.

The main tasks of the 11th five-year programme are to: ■ Transform growth from an extensive model (ie. emphasising quantity) to an intensive one (ie. deepening quality) based on productivity and efficiency, with R&D rising to 2 per cent of GDP and more research initiated at enterprise level.

■ Encourage innovation, openness and self-reliance while remaining open to the outside world economy.

■ Emphasise energy conservation (energy consumption per unit of GDP to decrease by 20 per cent and water consumption per unit of industrial added value by 30 per cent; irrigation efficiency to rise) and environmental protection (industrial solid waste recycling to grow by 60 per cent; pollutant discharges to be cut by 10 per cent).

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■ Improve government services in education, health and employment.

■ Resolve problems of regional and urban/rural disparity, including through more government support for low-income groups (with both urban and rural per capita net income to rise by 5 per cent a year).

The programme provides for the addition of 6,200 miles of freight railway line and 4,400 miles of passenger line, with the highway network reaching 1.4 million miles (of which 40,000 miles will be expressways) by 2011. Waterways and navigation routes will be built in the Yangtze and Pearl river deltas and international shipping centres constructed in cities and ports such as Shanghai, Tianjin and Dalian.

Over the next five years, too, 48 new airports will be built taking the total number in China to 190, while some existing sites will be upgraded as regional hubs to serve the most remote areas.

Although this news was reported in the West primarily as a threat to the environment, it should be noted that the USA has 346 major airports (and 15,000 airfields) with only one-quarter of China’s population. Partly in response to higher costs, China’s state-owned domestic airline companies have recently embarked on extensive fuel-saving measures, using more direct flight paths and flying at higher altitudes.

With two-thirds of China’s people still living in rural areas, the programme puts forward the strategic objective of building a ‘new socialist countryside’ by increasing grain production to around 500m tons; developing farm produce processing, freshness preservation, storage, transportation and other services; providing clean water supplies everywhere; perfecting the rural power grid; ensuring access to all towns by asphalt road; establishing telephone connections to all villages and internet access to all towns; and providing basic health and nine-year free education services in all rural areas.

Nationally, the programme aims to maintain the level of economic growth at around 7.5 per cent a year in order to double GDP per head by 2010 (compared with 9.9 per cent in 2005 and 8.5 per cent forecast for 2006). Total population will be kept at below 1.36 billion. By 2010, it is intended that nearly half (47 per cent) of the population will live in urban areas.

To help integrate the plans for population redistribution, economic development, natural resources and environmental protection, all land space will be classified into four categories ranging from zones for maximum development to zones where all economic development will be banned.

Tighter controls will be imposed on the transfer of agricultural land to other uses and, by 2010, it is intended that forest coverage will be increased to embrace 20 per cent of China’s land surface.

Energy and the environment Government, state and party officials are well aware of the environmental and sustainability problems posed by China’s energy-hungry development – signalled by adoption of the concept of ‘Green GDP’, which takes into account costs to the environment. Coal-fired power stations and heavy industry, as well as increased individual consumption of energy and the boom in car travel, are undoubtedly creating dangerous amounts of pollution (we certainly didn’t see much blue sky over Beijing). Coal will continue to be a major source of energy, producing more than two-thirds of the country’s electricity, although China needs the technology to mine and burn it more efficiently while minimising environmental damage.

Supplying, installing, developing and managing such ‘clean coal’ systems could be a major source of trade and employment for Britain although, to take full advantage of it, British governments would have to engage in substantial planning, investment and public ownership in our coal and energy policies here at home.

One of the main areas earmarked for further expansion of China’s coal industry is the XinjiangUygur Autonomous Region in north-west China, where 40 per cent of the country’s coal reserves are located and 95 billion tons of which are classed as recoverable.

According to the State Environmental Protection Administration, high consumption of energy – especially coal – meant that eight of the 20 environmental goals in the 10th Five Year China's line of march | 9

XI’AN HI-TECH INDUSTRIES DEVELOPMENT ZONE Xi’an is one of the great historical and cultural centres of China, in the Shaanxi Province which is thhistorically a bastion of the Chinese Communist Party.Today, the city has a population of just below 5m and a CPC membership of 60,000.It receives 20m visitors a year from home and abroad, many of them going to see the magnificent Mausoleum of the First Qin Emperor nearby and its world-famous ‘terracotta warriors’.

A huge construction programme over the past decade has given rise to many new apartment blocks, spectacular civic parks and gardens, the most luxurious shopping malls and department stores,office blocks,banks,cinemas and restaurants.At the same time,the ancient city walls and pagodas have been preserved and illuminated so that traditional Chinese architecture remains prominent amid the wide range of styles to be seen.A short distance from the central avenues and squares, the 1950s (and older) Xi’an can be seen with its run-down tenements and rows of small business shops and workshops.

The decline of the textile industry and other restructuring has produced an unemployment total of 6-7 million people in Shaanxi Province with its population of 37 million, although the rise of aerospace, electronics and tourism has absorbed many workers. In addition, the Xianyang municipal authority together with the trades unions have undertaken counter-unemployment schemes to provide domestic and hotel work, landscaping projects, traffic control jobs, childcare services and retraining for the unemployed.

The Hi-Tech Industries Development Zone was announced in 1991 – as part of a central government initiative to set up 53 such centres across the country – to boost economic development in central China.The city is also designated as one of the country’s four hub airport centres, with five civil airports, 25 international routes and two provincially-owned airlines.

Located 4-5 miles south west of the city centre, the first three phases of the zone included an electronics park, followed by a manufacturing park in the north-west specialising in biopharmaceutical and optical-mechanical products.A new redevelopment in the centre of Xi’an includes commercial office, sulphur industry and software development parks (not all operational yet).The total area of the zone upon completion will be about 35 square miles.

The zone hosts local private and 700 transnational enterprises together with many of the 672 R&D institutes (linked to universities and colleges) administered by municipal, provincial and central government. Typically, enterprises offer commissions and scholarships to the institutes, while in turn the HE institutions offer courses and specialised services to the enterprises.Together, the city’s 34 public sector and 68 private universities and colleges, 172 technical schools, 129,000 university graduates and 560,000 technicians and engineers help make Xi’an China’s third city in the field of science and technology.

At the end of last year, 290,000 people were employed in the zone, which accounts for onethird of the city’s GDP.The priorities for future development are in the areas of mechanical equipment and automotives, software and IT services, telecommunications equipment, semi-

Plan (2000-5) had not been met. Notably, these included targets to cut sulphur dioxide emissions by 10 per cent (they rose by 27 per cent in 2005), to reduce carbon dioxide discharges and industrial solid waste, and to improve treatment of waste water. A three-year pilot project in partnership with Dow Chemical company has, on the other hand, proved to be very successful in showing how these targets can be achieved in individual enterprises.

In the view of Chinese state and party representatives, nuclear power comprises part of the solution. The new five-year programme’s energy strategy contains plans for new nuclear plants, although it was accepted that the cost of nuclear-powered electricity is comparatively expensive (twice the cost of hydro-electric power in China, for example). State officials also ackowledge the need for more research into the treatment of radioactive materials in order to reduce the danger and expense of waste disposal and plant decommissioning. Furthermore, in collaboration with other 10 | China's line of march

conductor components, bio-medical technology and aviation.

A vital feature of the zone is the availability of ‘business incubators’ – agencies which facilitate shared premises;training in management,marketing and human relations;and financial advice and access to state funding. Universities and colleges as well as local enterprise take advantage of these facilities to set up small companies in the zone which can then grow.

Wages are fixed according to the labour contract negotiated between the employee or the union and the employer.Some contracts voluntarily include an extra one or two months salary for the employee to take at holiday time. Unskilled workers earn about 400 yuan (£29) a month when starting, rising to the highest scale of 600Y (£44); a skilled worker could expect from up to 1,000Y (£73), a production engineer 2,500Y (£182) and an IT graduate from up to 7,000Y (£511).Income tax is levied on salary bands from 5 per cent up to the top rate of 45 per cent on income above 100,000Y (£730).

Pension fund contributions are also voluntary, but will often provide for the employer to pay 20 per cent of salary and the employee to contribute 6 per cent.Unemployment insurance may require another 2.5 per cent from the employer and 1 per cent from the employee (pending the introduction of a statutory compulsory scheme in the near future). Under Shaanxi Province regulations, health insurance is compulsory (7 per cent and 2 per cent) as, it would appear, is an ‘accumulation fund’ of between 5 and 20 per cent from the employer and 5 per cent from the employee.

Provincial regulations also provide for a standard working week of 40 hours,with workers to receive time-and-a-half for weekday overtime, double-time at weekends and during annual leave (negotiable but usually 5 days),with triple time during the 10 statutory holidays (our ‘Bank Holidays’).

Companies in the zone,especially Foreign-Invested Enterprises,enjoy a preferential tax regime and other benefits. A range of incentives aim to encourage investment in fixed assets, R&D, technology transfer, software production, foreign language training and high-level management and to attract Chinese graduates back from overseas to start their own businesses.

In addition to variable VAT (3-17 per cent) a 7 per cent urban construction tax is payable on materials consumed, along with a 3 per cent education supplementary charge and an uban real estate tax at 12 per cent of rent paid.There is also a noise tax set at three levels according to decibels emitted.

After two years tax-free, corporate income tax begins at 7.5 per cent of profit in the third year and 15 per cent thereafter (but only 10 per cent for exporters and for approved ‘advanced technological companies’), with refunds for reinvestment.

The Xi’an HTIDZ administration appears to be actively engaged with enterprises in assessing which benefits and concessions they should receive in return for meeting the administration’s development objectives.

scientists around the world, China is involved in research into the nuclear fusion process which would minimise the production of nuclear waste. Chinese scientists have announced that they will build the world’s first experimental semiconducting device in this field by the end of 2006.

But there is also considerable research and investment in greener, renewable energy – for instance wind and solar power (notably in so-called ‘Solar Valley’) and hydro and thermal electricity. The country’s major power stations have been instructed to fuel at least 5 per cent of their power generators from renewable sources within the next five years. In Xinjiang Autonomous Region, we drove through a huge windfarm which powered much of the capital city of Urumqi, and elsewhere saw widespread use of solar panels on the tops of buildings.

In otherwise arid areas in western China, there are mountain ranges where snow and rain shower the peaks. While this water could be piped or pumped down to irrigate farmland and China's line of march | 11

KAMI CHEMICAL AND DETERGENT COMPANY This was once a military factory in Xi'anproducing explosives, before turning its processes and technology to the production of a range of detergent products. From 1992 until 1997, it was a joint venture between a state-owned military company and a private Japanese enterprise, before turning into a private Chinese company with five partners – including a woman chief executive – after a management buy-out with a bank loan.

Its products today contain no phosphates or other toxic elements and so are especially useful for cleaning fruit and vegetables.The water purification equipment it employs was formerly used in the manufacture of military hardware.The company regards its environmentallyfriendly approach as a major selling point.

Kami products are exported to Russia and south-east Asia, with longer-term plans to enter the EU market.The company also acts as an import agent in China for cosmetics (which it does not produce itself) from Germany.

The plant employs something over 100 workers on an 8-hour day (plus a half-hour unpaid dinner break), and made a profit last year of around 300m yuan (£22m).There is a union in the factory, although we were told by a company guide that the workforce in each department did not know the pay levels of those in the other departments.

The work process is based on the ‘just-in-time’ approach,with no stockpiling of inputs or outputs. It also operates a ‘no waste’ production principle which means that there are no gas or water emissions or other non-recycled residues.

vineyards in the plains below, in an area near Turpan a system of underground tunnels was created 3,000 years ago to enable the water to run down to to underground storage areas. At various points, it can be drawn from the tunnels near the surface and used for irrigation. Farmers open the sluice and pay by the hour; they record the time on the basis of trust – any idea of taking water without paying in full appeared to be utterly alien to them.

It is intended that up to five ‘eco-cities’ planned for across China will show the way for the future. These urban centres – being designed by British engineers and technicians – will be selfsufficient in energy, water and most food products, with the aim of achieving zero green-house gas emissions from their transport systems. By 2010, the first such city will be completed at Dongtan by a partnership between the partly state-owned Shanghai Industrial Investment Company and foreign design, engineering and property firms.

Individual companies and factories are being encouraged to be more energy-efficient and more ecologically sound.

There is also a drive against the pollution of rivers and lakes by chemical and petrochemical companies. A thorough inspection of the country’s 20 biggest such operations in the most sensitive locations has just been completed, and some of their expansion programmes made conditional upon measures to safeguard water quality. Another 107 major enterprises have also been inspected by the State Environmental Protection Administration. Future development plans will be subjected to a new system of environmental impact assessments. In the Fujian Province, meanwhile, an army of 7,000 enforcement officers has surveyed 2,300 factories over the past six months, closing down the worst polluter – a papermaking company – and issuing improvement notices to 27 others.

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Work and Trade Unionism The All-China Federation of Trade Unions There are an estimated 752 million workers in China's labour force, 45 per cent of whom are women.

The All-China Federation of Trade Unions was established in 1925 and currently has 150 million members (about 63 per cent of the urban workforce), 55 million of whom are women.

The federation is organised through 10 national trade unions based on occupation, with 31 regional and provincial federations. Higher bodies guide the work of lower ones.

Three-quarters (580,000) of trade union branches are organised in the mainland private sector and one-quarter (190,000) in the public sector. Around 160,000 branches are in one-third of all Foreign-Invested Enterprises (FIEs) covering 38 per cent of the workforce in this sector. Some 15,000 (2 per cent) of ACFTU branches are in Hong Kong and Macao-funded private enterprises, many of which are very small or transitory, do not observe laws and regulations and employ Hong Kong and Macao workers who have no trade union tradition and might even be hostile to trade unionism.

Unionisation is lower among women workers than men, and this inequality is reflected in the composition of trade union leaderships. The law provides for equal treatment of women at work, although as in Britain the situation is often different in practice.

To address these issues more effectively and alongside the government, employers and the AllChina Women’s Federation, the ACFTU has just completed an International Labour Organisation gender-based training project devised with Dutch assistance. Its aim was to facilitate the promotion of women in the workplace and the trade union movement, and the project also set out the case for equal sharing of housework (which is already demanded by law). Gender equality and diversity in the workplace are now likely to feature in a new draft law on employment promotion.

The ACFTU and its affiliated unions are involved in developing economic, social and labour and welfare policies nationally and within each industry. Within state-owned and other collective enterprises, notably through the mechanism of workers’ congresses, trade union committees wield considerable power through participation in the ‘democratic management’ system.

There is a legal right to recognition for trade unions upon their request. Even the US transnational corporation Wal-Mart has been compelled to recognise a union after setting up shop in China, with the successful fight at a store in Fujian Province spreading to other sites. In some cases, the unions have negotiated an agreement before recruitment of the workforce has been completed, in which cases the agreement is put to the membership for endorsement or renegotiation. Union officials also have the right to enter the premises of non-union enterprises in order to recruit.

The ACFTU unionised an additional 17 million workers in 2004 and aims to recruit 6 million new members a year over the next five years. Propaganda is conducted in FIEs to counter the arguments of employers in favour of the right not to join (as well as to join) unions. A major problem for recruitment is the fact that many workers in urban and industrial areas come from a rural and peasant background and have no knowledge of modern industry including employment and health and safety rights.

Trade union dues are about 0.5 per cent of the monthly wage, with employers also paying 2 per cent of wages costs to the union.

The federation seeks to improve its training of union officials who are more used to organising under the planned, state-owned economy. In particular, they need training in such fields as recruitment, collective bargaining and agreements, and ‘social dialogue’.

According to Deputy director-general Liming Wang of its international liaison department, the ACFTU has set itself four major tasks in 2006: first, to ‘improve the qualifications of workers so that they can adapt to a market economy and its industrial relations system at enterprise level’, within the context of the 11th Five Year Programme; second, to ‘better represent workers against China's line of march | 13

encroachments on their rights and interests’; third, to organise more research on labour issues; and fourth, to provide more protection to rural migrant workers in the urban centres especially on such issues as occupational health and safety, payment on time and social insurance.

Massive closures of outdated and uneconomic enterprises have put 8.3 million people out of work. In response, the trade unions have organised vocational retraining for 2.2m members. They now aim to put about 1.5m workers into training each year. Working with the government, the unions help to ensure that laid-off workers have a guaranteed basic livelihood. One ACFTU initiative has been the Warmth Project whereby 62 million redundant workers in urban areas have been assisted over the past 10 years with cash payments, food, fuel and employment and training places. The Chinese unions have created an extensive network of agencies and co-operatives in a wide range of fields, from insurance and credit unions to health centres and export-oriented manufacturing enterprises.

Although the national unemployment rate is around 4 per cent, this figure does not include the hidden unemployed in the countryside nor many of the 180 million migrants from rural China seeking work in the cities. Most such migrants have no sense of trade unionism and are often ready BEIJING HYUNDAI MOTOR COMPANY This enterprise was founded in 2002 with an investment of 3.8bn yuan (£277m) as a 50/50 joint venture, between the South Korean corporation and the Chinese state.The company’s management board comprises four South Korean and four Chinese directors, with the chair of the shop stewards committee also attending meetings in a speaking capacity.The chair of the company board of directors is Chinese while the manager is South Korean.

The company employs a workforce of just over 3,000, most of them Chinese (including 550 CPC members) and about 60 South Korean, many of the latter being technical staff.Women comprise one-quarter of the workforce, concentrated in the non-manual grades except for some women drivers. Most of the manual assembly line workers are young men, with an average age 25.

Beijing Hyundai produced 300,000 cars in 2005, all of them for the Chinese home market.

By 2008, production will reach 300,000 engines and 600,000 cars.Already the company is the fourth-largest producer of saloon cars in China.

The plant has a relatively high level of automation and low intensity of labour (the Shanghai Volkswagen and GM plants employ 10,000 and 7,000 workers respectively to turn out the same number of cars as Hyundai).Automated engine fitting and moveable work stations in the assembly plant make the work less arduous than in comparable British plants. Productivity at Bejing Hyundai is 66 units per hour, although the management want to reach the highest international standards (eg.Toyota at 72 UPH). Management set the UPH rate and the line speed (which appears to be quite relaxed by British standards) by agreement. Plant-level negotiations take place at Beijing Hyundai on line speed – where the union’s approach to raising the UPH rate is that the issue must be scientifically assessed to take account of equipment quality, with improved payment for workers – and on staffinging levels and overall output targets.All agreements are put to the members for acceptance. Unlike some plants in Britain and other Western countries, the line speed is never altered by management arbitrarily, and more workers are brought onto the line when the speed is increased.

Trade union membership at the Hyundai plant is open to South Korean as well as Chinese workers.Although apprentices are not recruited, 98 per cent of the other workers are in the union, which has sub-committees and sub-branches in different parts of the plant.The union branch has six full-time union officials elected by the company congress of trade union representatives, and they meet regularly with the board of directors.

According to Li Zhi Li, trade union chair and CPC secretary at the plant, the union sees its main functions as, first, ‘enhancing the enterprise’; second, ensuring that employment, trade 14 | China's line of march

to accept low wages, one-day contracts and unsafe conditions, notably in the demolition industry.

There are widespread problems of employers not paying migrant workers for their first period of work, delaying payment, underpaying them or trying to avoid paying them altogether. These malpractices are particularly rife in the construction industry. The ACFTU is putting pressure on the government and employers to ensure that migrant workers are paid from the beginning of their employment. Most legal cases taken on by union organisations have proved successful.

The ACFTU has formal links with 402 trade union organisations in 155 countries and regions, and would like to expand and deepen its international relations. In particular, it wants to learn more from them about labour standards, collective bargaining and participation in enterprise management (eg. in countries such as Germany with its co-determination system).

Terms and conditions of employment In the workplaces we visited, wages varied from 600 yuan (about £44) to 2,000Y (£146) a month.

This differential was explained at least in part by the fact that many new workers from rural areas had no experience of industrial or modern life and could add little value to production without

union and company law is implemented in the interests of the workers; third, monitoring the company’s operations and performance in order to press for improvements for the workforce; and, fourth, improving the skills training, living standards and cultural life of the workforce.

Every year the union applies for a pay increase, which is considered by a joint committee of management and union representatives.Any recommendation or failure to agree will then be considered by the company board of directors, which will then make an offer to the union.

The union chair has the statutory right to attend and speak at this and any other board meetings where the workers direct interests are being considered, but is not a member of the board to be bound by its decisions.The management’s proposal will be considered by a special payment committee made up of ‘grass-roots representatives’ of the union. They can either accept the proposal or send their officials back to negotiate an improvement. In informal conversation, comrade Li indicated that CPC members on the board of directors would be contacted if there needed to be pressure on the South Korean directors to be more amenable to a settlement.

Disagreements with Beijing Hyundai management are settled without recourse to strikes, which Li regarded as unnecessary, although he indicated that sometimes workers will carry out a 'go slow' to put pressure on management.

The law limits the standard working week to five 8-hour days, although continuous production at the plant requires up to 36 hours overtime a month.The overtime pay rate is time-and-a-half on weekdays, double-time at weekends and triple-time on public holidays. During the working day, workers have a 10-minute rest break every two hours, with an unpaid one-hour break for dinner (the lunch is free).

Average annual income at the plant is 40,000Y (£2,920) – very high by Chinese standards – so it would take a worker between two and three years to earn the equivalent of the cost of a Hyundai saloon car. The union is currently negotiating a purchasing discount for employees, asking for 20-30 per cent off.

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extensive initial training. A monthly wage of, say, 1,500Y (£109) should be set against mortgage repayments of around 800Y (£58) for a two-bedroom flat, which means that sharing with a working partner or friend could make a big difference. Despite the financial difficulties, demand is such that in one province alone – Shaanxi – thousands of flats are being built, many with airconditioning.

While it is the practice for management to give the workers bonuses at festival and holiday times, such payments are not a way of evading wage restraint as they have to be reported to city or regional authorities. Nonetheless, they can make a big difference to a worker’s annual income. For instance, profit-sharing at the General Motors Shanghai plant, where the average monthly wage is 2,200-2,500Y (£161-183), results in workers taking home 25 months salary a year.

Practices vary widely in terms of the standard 5-day working week. In state-sector industry the tradition is for an 8-hour or 9-hour day which includes a two-hour unpaid dinner break; in other state-owned enterprises, the hours may be from 8am until 5pm with an unpaid hour break at midday. In joint ventures or FIEs a common practice is for the working day to run from 8.30am till 5pm, with half an hour unpaid break at midday. Many of the most recently arrived Western companies work from 9am to 5pm with one paid hour for lunch.

Health and safety The Chinese unions bear a heavy responsibility for enforcing health and safety standards in conditions where there is no tradition of taking such matters seriously. Workers who contract dust, for example, may still be sacked for becoming ill and left to die, as was the case in Britain until the 1940s. Now China’s unions fight management to enforce health and safety legislation and for compensation and medical treatment.

But there is a problem where local authorities may want unsafe or obsolete enterprises to continue operating even though their profitability depends upon inadequate health and safety standards including, for instance, the denial of protective goggles and masks required by law.

Sometimes, in a huge country where corruption is difficult to stamp out, local council representatives or staff may have had a financial interest in keeping a dangerous enterprise open.

This has been a particular problem in the coal industry, where local officials have been unwilling to prosecute mineowners who breach health and safety regulations. After enormous pressure from the ACFTU, it is now illegal for councillors or council employees to have shares or deeds in local businesses.

There is also concern about levels of unsafe working in the coal mining industry, which extends from small backyard operations to very large mining complexes. In 2005, there were 3,341 mining accidents in China, killing 5,986 people. During our time there, six miners died in an underground gas explosion at Maoyi in Hunan Province. Scandal ensued when it was revealed that four of the victims were women, who had been employed underground in breach of the same prohibition which applies in Britain’s coal industry.

On April 5 2006, it was announced that all of China’s coal mines with an annual production capacity below 30,000 tons would be closed by the end of 2007 on safety grounds. Some will close immediately, while mergers of many remaining mines would take place in order to improve their safety regimes. But the demand for coal is such that even when some unsafe mines are closed, others will come under greater pressure to produce more.

Nevertheless, we witnessed one major advance in one of the country’s biggest and most hazardous industries. Whereas in 1997 much of the scaffolding on building sites consisted of bamboo cane, today in the cities at least the structures are made of tubular steel and shrouded in safety netting.

Labour relations and industrial action In unionised workplaces, the shop stewards committee elects a negotiating committee (which, in Beijing Hyundai for example, comprises six people) and its chair. Shop stewards are elected by the members of each shop or section in an enterprise for a three-year term, but can be removed by the members at any time at a shop meeting.

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Negotiations on pay, conditions, overtime, and health and safety often take place at plant level, although wages are usually settled in line with a government-set rate at national level. The unions urge workers not to call for extra above the national norm, explaining that a share of the profit will go to local and central government.

NORTH-WEST No.2 COTTON GROUP COMPANY This Xi’an company is a state-owned enterprise in transition. Private finance is actively being sought in order to bring in new technology and attract skilled management.

The factory produces textile materials (notably bedding) for export to western Europe, north America and south-east Asia, utilising advanced technology such as spraying machinery from Japan. It employs a workforce of 6,600 (of whom 2,050 are CPC members) and makes an annual profit of around 400m yuan (£29m). After tax, around half of the profits go to investment and expansion and the rest goes directly or indirectly to the workforce.As Wu Lisheng, chairman of the company board and secretary of the CPC party committee in the factory, put it: ‘the state interest and the workers’ interests must both be safeguarded’.

Workers are graded according to their skill and the quality of their weaving. Each bolt of cloth is fully examined and bears a tag establishing the identity of the weaver. Poor work can lead to downgrading and retraining, while consistently good work can lead to promotion to a higher-level machine and product. Classes to upgrade skills are held at the factory and off-site after work at a local textile training college, offering opportunities to advance which did not exist in British industry when, for example, a labourer could never have become a toolmaker. Payment is based upon piecework combined with rigorous quality control which stamps every product. Poorer quality workers appear to be encouraged rather than penalised.

A banner on display in the large square at the centre of the company complex proclaims in Chinese:‘By our own efforts we create prosperity and advance our aims’.

When asked about the status of women in the company, Wu Lisheng replied that the management’s concern was the same as that of the CPC. The woman vice-manager – herself a former weaver – worked to ensure that women receive equal treatment, assisted by a policy of targets and quotas for senior management and trade union posts.

The company also sponsors kindergartens and provides 8 months paid maternity leave during the child’s first year.At the same time, it was admitted that domestic burdens and a lack of education or training held back women workers.

The company provides extensive on-site housing for workers with families, which they are now being encouraged to buy with company assistance.There are also rented twinroom dormitories with basic reading- and rest-room facilities for all employees. On-site facilities include a primary school, health centre, social club and a market for household provisions.

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CPC members put the political case for the pay norm in the context of the government’s programme for equitable industrial development, increased production and investment in public services and utilities, communications and state-owned enterprises. Many workers who have family members still living in rural areas readily accept that that their relatives will benefit from these centrally-funded policies.

Union branch representatives seek to negotiate a draft agreement with the management of an enterprise, which is then submitted to a mass meeting (or 'workers congress') in that enterprise for approval. The representatives may be sent back to management to negotiate improvements before the workers votes to accept the agreement.

Where regional standards are not adhered to by management, a dispute will go to internal mediation and then – if there is still a failure to agree – to a local labour arbitration committee.

Employees have final recourse to a People’s Court if they are not satisfied with the arbitration award.

Strikes are not usual. If workers are not satisfied and want to take action over a grievance, they may refuse extra overtime or work more slowly. The right to strike was removed from the Chinese constitution in 1982, on the grounds that workers and management shared common interests in a state-owned and planned economy. Although the right no longer exists in law as such, strikes are not illegal and the basic Trade Union Law of the republic (revised in 2001) states in Article 27 that: In the case of a work-stoppage or slow-down strike in an enterprise or institution, the trade union shall, on behalf of the workers and staff members, hold consultations with the enterprise or institution or the parties concerned, present the opinions and demands of the workers and staff members, and put forth proposals for solutions. With respect to the reasonable demands made by the workers and staff members, the enterprise or institution shall try to satisfy them. The trade union shall assist the enterprise or institution in properly dealing with the matter so as to help restore the normal order of production and other work as soon as possible.

The Chinese authorities and media do not publicise strikes as such, and no figures are produced in relation to industrial action, numbers of strikes, days and production lost etc. The Chinese Communist Party’s justification for this is that such reporting and information could inflame conflicts which need to be resolved, and which set a bad example by encouraging ‘negative’ and ‘unpatriotic’ responses to problems when everything should be done to build up the economy, the country and people’s living standards.

At the same time, it should be noted that some official documents, for instance reports from the Ministry of Labour and Social Security, do contain references to the number and extent of industrial disputes.

The spread of a market economy means that, according to Limin Wang of the ACFTU, ‘more distinctive interests’ arise as between employers and employees. It is accepted that the two sides may take different views. The ACFTU has a preference for social dialogue, mediation and arbitration to resolve disputes, which is what usually happens (although arbitration does not apply to wage bargaining). Wang expressed the view that ‘strikes must be used only very carefully’.

Trades unions must find the cause for any disputes which break out, see management and then if necessary go to mediation and then to arbitration. Where industrial action occurs, unions may use lawyers and provide legal assistance for workers.

On issues such as working hours (but not pay) the unions can take out lawsuits against employers to enforce employment and trade union laws. This appears to be a weapon more readily considered in China because the law and the local labour courts are regarded as being fundamentally sympathetic to workers.

Nonetheless, at least one prominent trade union official expressed a personal view that the Chinese trade union movement may have to consider pressing for restoration in law of the right to strike.

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Social development

A

ccording to party officials, The aim of the CPC is for China’s development to take place in conditions of social harmony. This will be built on the principles of democracy and the rule of law, fairness and justice, viability and credibility, vitality, good order, and peace between humanity and nature.

The CPC has a scientific theory of development which seeks to co-ordinate economic and social development, to co-ordinate development between town and countryside, to develop an original model of development based on China’s history and conditions, to build modern systems of communications, to protect the environment, to continue with the ‘opening up’ policy towards the West, and to ensure that all policies are people-centred.

In this context, the country’s social security system is being strengthened, especially in medical care, and migrant workers in the urban areas are being organised, unionised and supported.

Public-sector schools in Beijing must lift any remaining barriers to pupils from migrant families, as must private-sector schools (where the progress of migrant children will be supervised by the public authorities).

The aim is for all China’s citizens to be covered by medical insurance by 2020. At present, only 55 per cent of urban residents are covered. Some 20 billion yuan (£1.5bn) will be spent over the next few years to extend the scheme to all rural farmers (at present only 130m out of 550m are covered).

Even for those who are insured at present, medical charges can still be prohibitive, especially when hospitals overcharge for treatment – sometimes demanding payment upfront – and doctors prescribe drugs unnecessarily. The scandal of high charges was high on the agendas of the National People’s Congress and the Chinese People’s Political Consultative Conference earlier this year.

For working women, special obstacles include the ‘glass ceiling’ when it comes to promotion, and the difficulties faced by women graduates in finding a job. Representatives from government, business, trades unions and women’s organisations have carried out detailed surveys and produced proposals to combat discrimination. One scheme set up with the help of ILO expertise to assist redundant workers provides more than 40 per cent of its grants to women.

In response to questions, Vice-minister Liu Shijin of the Development Research Centre of the State Council specified the following measures to reduce social inequality: ■ Job creation, with employment rising by 4 per cent a year (migrant agricultural labourers will increase by 45m as will urban employment; registered urban unemployment will be kept below 5 per cent) ■ transfer of central government tax revenues to western (ie. inland and less developed) China ■ building a social security system (including an urban insurance scheme with unemployment payments to cover 223m people) ■ assistance to low income earners in urban areas ■ a basic medical service for all (with co-operative medical care covering more than 80 per cent of the rural population) ■ nine-year compulsory education with subsidised high school and college education for low income families (all but the poorest students pay fees for higher education, with some assistance also available from colleges; many students take part-time work to raise an income) ■ increased income tax for the higher waged (at present, income tax begins on monthly salaries above 1,600Y or £117, rising from 5 per cent to a top rate of 30 per cent) ■ a consumption tax on luxury goods ■ housing subsidies and lower rents for the low paid ■ a crackdown on corruption.

Migration into the cities has added enormously to the demand for affordable housing. In response the central government has launched a 4.7 billion yuan (£343m) programme of social China's line of march | 19

provision and public and private sector rent subsidies. With three-quarters of the country’s cities now participating, the programme has assisted 329,000 families. But one indication of unfulfilled need is the situation in the north-eastern Jiangsu Province, where 20,000 families are being URUMQI No.1 PRIMARY MIDDLE SCHOOL Established in 1909, the school in central Urumqi, capital city of the Xinjiang-Uygur Autonomous Region, has 3,000 pupils and 100 teaching (80 per cent of them women) and 67 ancillary staff.With assistance from central government, particularly in the provision of facilities for modern technology (computers, science equipment etc.) the school has made great progress in recent years in improving the quality of education for young children.

The municipal education bureau and the school have a philosophy of education which according to Liu Jun,Assistant Director of the Educational Bureau, emphasises: ■ ■ ■ ■

the development of students’ ideals, mores and behaviour; the aim is to ‘foster morality, integrity, respect for others and an understanding of co-operation’ the development of patriotism – ‘students should love their country, the CPC and socialism’ – through teaching and other activities such as the flag-raising ceremony every Monday morning the need for students to be able to fulfil the needs of society the value of intellectual development in fields such as the sciences.

The main subjects taught are Chinese, maths, PE, music, the fine arts and English (to which ‘special attention’ is paid). School begins at 10am with line-up and entry to the buildings at 10.10am. Then there are two classes until noon including a half-hour midmorning break. After two hours for dinner, another two classes take place until PE and other extra-curricular activities begin at 5.10pm.Activities were provided for students with unique potentials.

The headmaster discussed pedagogic problems with considerable knowledge, sensitivity and enthusiasm. For example, how can teachers develop a critical approach in students while at the same time seeking to instil values in them? He thought there was a danger of emphasising the transfer of knowledge at the expense of developing the child’s personality.

Teachers attended training courses on the philosophy of education.

The bureau and school had changed their model of teaching from one based on teacher provision of knowledge to a model centred on the discussion of different ideas and issues.

More emphasis was now placed on developing the student’s capacity.This change was in line with guidance issued by the Ministry of Education following extensive consultations with teachers about teaching methods. Selected regional education authorities had been given the responsibility of running pilot schemes – Urumqi was one of 38 experimental teaching districts in China.

Children with learning difficulties are taught in specialised sections in two of the city’s schools. Children with significant disabilities or incapacities are educated in special schools.

Teaching staff receive no training to recognise or counteract dyslexia.

When asked in informal talks how they responded to disruptive behaviour and undisciplined children, the young women teachers – who had been very frank about the pressures of large classes and insufficient resources – replied: ‘with more love’. They believed that patience, tolerance and affection could overcome behavioural problems (which are probably less severe in Chinese society where politeness and personal modesty are deeply ingrained in the culture). Corporal punishment is not permitted in schools.

The educational bureau and the school would like to extend contacts with primary schools in Britain.

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helped but at least 500,000 more require assistance.

In Xi’an City the municipal government finances the building of ‘economical’ housing for sale/rent to low income residents. But here as elsewhere, property companies fund much of the apartment building for sale or rent (although the latter is so expensive that buying is the preferred option for most people). Prices have escalated in the recent period (up by 2.5 per cent in a single month). Couples need financial assistance from parents and relatives, usually to pay for the deposit on a mortgage. A new apartment of 500 square feet would cost 1,000 yuan (about £73) a month over 20 years. A moderately well-paid worker would receive a monthly wage of 1,200Y (£88); a typical peasant income would be 500-600Y (£36-44). Some speculators buy apartment leases and then re-sell them at a handsome profit after one year. Small estates of new red-brick houses are also being built on the outskirts of the city.

Huge emphasis has been put on the importance of education in developing the country and achieving a fairer, more equal society, and investment continues to increase. There is now a policy of nine years of free and compulsory education, with more than 90 per cent of children enrolled in junior school, and a clear attempt to offer a rounded education to aid children’s intellectual, social and physical development.

The scale of the undertaking is illustrated by the fact that more than 400,000 of China’s primary and junior schools – about 93 per cent – are located outside the cities, educating the 143 million (84 per cent) of the country’s pupils who live in the countryside. Microsoft and other Western companies have joined the Ministry of Education in programmes to provide computer classrooms, IT training systems and computer-aided teaching programmes to schools in rural areas.

Lessons in the classroom are not just about increasing knowledge, but also about shaping ideals, morals and behaviour. Formal written examinations are now being downplayed as a means of assessment. Evaluation is a multi-dimensional process which also takes into account behaviour in class, school, the family and social life as well as tests and exams. Formal assessment scores are not regarded as so important. Classification is by broad levels in order to reduce the pressure on students. The children are not segregated by gender. There is no streaming and all classes are mixed ability. Indeed, the teachers we met seemed horrified by the pressures placed on children by a streaming system on children from the age of 6, especially its impact on the self-esteem of those in the lowest streams.

In China, it is regarded as an important principle that children go to the school nearest to where they live, and a lot of attention is given to closing the gap between good and poor schools through local and central government assistance. There is no concept of ‘parental choice’ between schools so that ‘failing schools’ can be highlighted and then closed or subjected to special measures as is the case with the New Labour approach in England.

Crime and policing Although crime and anti-social behaviour are far less common than in Western society, China has its own problems of corruption, drug and alcohol abuse, counterfeiting and computer fraud. The media also feature reports of increasing organised crime especially in relation to people smuggling, prostitution, extortion and the bootlegging of illegal products.

However, the extent of these problems should be kept in proportion. While we were in China, the mass media were reporting the trial of 98 defendants in the People’s Court of Loudi in Hunan Province, the latest in a series of cases involving gangs which had enjoyed the protection of some local government officials. Yet in what the press called ‘a series of major crimes’ committed by ‘underworld thugs’ since 1997, only one person had been killed and 19 injured. This record would compare favourably with that of many British cities over an average weekend.

The death penalty remains in force, and in the absence of published figures it is estimated that at least 1,500 people are executed each year on average. The police are armed, although there is an ongoing public debate about when they should fire their weapons – with a seemingly large section of public opinion in favour of more frequent use, while lawyers warn against abuses of power.

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Women and the one-child policy

B

efore China became the People's Republic, the role of women was widely regarded as being entirely secondary to men; except in the liberated 'Red Base' areas, they were to be passive and submissive to the men of the household, and they had no political rights. The 1949 revolution brought about a huge shift in status. Since then, equality for women has been officially viewed as a vital part of achieving socialism. Women have experienced a great deal of change in their role and position in society, and in their level of participation and representation.

Women account today for around 49 per cent of China’s population. Of the republic’s 712 million people in work, 46 per cent are women – in fact, in comparison with men women are more economically active in China than in the US; the proportion of women in education at all levels is going up, and the China Women’s University in Beijing will be launching the first major degree in Women’s Studies in autumn 2006; rates of illiteracy among women, while still higher than among men, are coming down more quickly; and women have benefited from the government’s policies on to alleviate rural poverty.

The economic reforms initiated in 1978 have had positive and negative effects for women. On the one hand they have improved the overall standard of living and have created new opportunities for women in the labour market. On the other hand, women find it easier to enter some sectors than others (the services sector, for example); they are often the first to be laid off and suffer more from unemployment; and they are affected disproportionately by the changes to rural communities and the weakening of collectivity, as it is more often men who leave these areas to find jobs in towns and cities further afield.

A range of laws and policies have been put in place to promote and protect the rights of women – for example, in legislation covering marriage, compulsory education, inheritance, maternal and child healthcare and employment.

Prostitution, however, remains illegal for both sellers and buyers. Although it was virtually eliminated in the 1950s, it has revived since the early 1990s and carries on under the cover of male hairdressing and massage services.

The All-China Women’s Federation, established in 1949, plays a prominent role in uniting and educating women, in and out of the party, across both urban and rural China. It does a lot of work to promote awareness and implementation of the Law on the Protection of the Rights and Interests of Women, which was introduced in 1992 as China’s first comprehensive law guaranteeing women’s rights and interests and promoting gender equality. The federation has more than 52,000 full-time workers, many of them engaged in informing and mobilising women to demand their rights in the teeth of traditional and strongly entrenched attitudes.

The participation and representation of women in politics is improving but still low. About one-fifth of the Communist Party membership are women as are the same proportion of government ministers.

Membership of trade unions, too, is still low in proportion to men – around 55 million out of 150 million – and the All-China Federation of Trade Unions is putting much emphasis on promoting equality in leadership and equality of household work in a bid to encourage and facilitate union membership.

It was noticeable that the production line at Beijing Hyundai car factory, was dominated by men – there were some women drivers, but the rest worked on the administration side. In the state-owned cotton factory in Shaanxi Province, however, there were more women. Certainly in state-owned companies, women seem to get a better deal. The women at the cotton factory, and the women members of the party group we met in the Beijing Wanshou Hotel, joked that they enjoy better welfare than the men.

In terms of achieving full equality for women across China, there seems to be some way to go, particularly in rural areas. The reassuring thing is that the government recognises this. There are the practical problems – for example there is a need to tackle discrimination and the reluctance to 22 | China's line of march

employ women on full contracts (and therefore with full maternity rights), particularly in the non-state sector; there is also much to do to raise the level of women’s political participation, and to improve the enforcement of legislation designed to protect women.

But there are also ideological problems. One young woman official at the CPC international department was very interested to know whether the CPB women’s organiser would call herself a feminist – to which the answer was ‘yes’ – and quite a discussion ensued on the problematic response to the word ‘feminism’ in China. Many Chinese women are made to feel uncomfortable – and even unfeminine – by calling themselves ‘feminists’, a syndrome which has interesting parallels with the ongoing fight for a feminist movement in Britain.

Population control The question of China’s one-child policy is not quite as simple as is generally presented in the Western media. Most Chinese people accept the policy as necessary to ensure the sustainable development of China and improvement of living standards for all. Consequently, they do not approve of people breaching it and thereby acting in a selfish and anti-social way. And while the ‘one-child’ policy operates in most parts of China and is vigorously pursued, especially in the urban areas, a flexible family planning policy is adopted for rural people and ethnic minorities.

The main weapon of enforcement is a hefty fine, equivalent to about one year’s wages in urban areas and up to a year’s income in the countryside.

However, attitudes are more relaxed in many rural areas where there is the tradition of wanting more children as a guarantee of care in old age, and wanting male children to help with heavy manual agricultural work. Couples may have a second child in exceptional cases, although they must wait several years between children. In some rural areas, the policy will be enforced with relatively light fines, or not enforced at all for a second or even third child. Also in the countryside, public assistance committees are likely to be more generous in providing financial aid to families who have paid a fine for breaching the policy, to help them with the costs of having an extra child!

In urban areas in particular, women pregnant with a second child will come under considerable pressure to have an abortion, although it is not legally mandatory. Couples who choose to breach the policy often arrange for the mother to give birth in a rural area, where there will be less hostility from the authorities and people generally, before mother and baby return home later and face the penalty.

Apart from the fine, there is no other punishment or discrimination against a family which breaches the one-child policy.

There are also important exemptions from the policy. Where one or both parents is from a national minority (8 per cent of China’s population), the couple may have two or – in some cases – an unlimited number of children according to factors such as population, natural resources, the local economy, culture and customs. Parents who remarry may also have a new child with their new partner. A recent reform also allows a couple who themselves were only-children to have two children instead of just one.

Government representatives insist that, with these caveats, the one-child policy will remain for many years to come. It has become a generally-accepted wisdom that improved life expectancy and much lower mortality rates among children have to be balanced by the control of birth rates.

The general move, therefore, is towards later marriage, later childbearing, and fewer but healthier children.

A traditional problem in China has been the favouring of boy babies over girls. A survey in Guangdong Province, for example, shows that 62 per cent of respondents would prefer to have a son, while only 2 per cent opted for a daughter. Nevertheless, media reports in the West of the organised killing in hospital of female babies soon after birth seem to have been wildly exaggerated. When raised with party officials, their reaction was one of disgust combined with the belief that education programmes and laws would eliminate the outdated prejudices which might make such incidents possible.

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Foreign and military policy

C

hina remains opposed to imperialism but has no intention of confronting the US directly in ways which would raise military tension.

The CPC did not organise mass demonstrations against the US-led invasion of Iraq, on the grounds that in the party’s view it was not necessary. Public opinion was already behind the Chinese government and CPC and these views were reflected in the media. The CPC believed that mass mobilisations would only have inflamed feelings and raised fears about imperialist aggression to no good purpose. It is a fundamental principle of Chinese foreign policy that China’s armed forces will never be deployed outside their own territory.

The People’s Liberation Army has been cut in personnel from 9 million to 2.5 million in line with defence needs. There is no longer military conscription and a career in the armed forces is much sought-after. An establishment of 9 million would only make economic sense if it were used to conquer territory for profit – which is not China’s policy. At the same time, having 7 million people in the armed services who could be otherwise employed is a waste of human resources.

China’s growing economic power is increasingly reflected in trade and investment operations across the world. These are carried out strictly in accordance with economic and financial rather than political or ideological criteria, which is to the advantage of countries which face discrimination or – in Cuba’s case – an economic blockade at the hands of US imperialism. Trade and investment arrangements with People’s China also offer developing countries an alternative source of capital, modernisation and markets to those of the imperialist powers.

While the CPB delegation was in China, a new trade agreement (promoted by the Brazil-China Chamber of Commerce) was concluded to provide a huge market in China for Brazilian ethylene being developed with Chinese finance. The US government publicly voiced its disapproval at this incursion into ‘America’s back-yard’, even though US investment in Latin America is 40 times that of China, while the US conducts ten times more trade with Latin America than China does.

As part of China’s expanded trade links with Cuba, the latter took delivery of 12 train engines and 1,000 fuel-efficient buses at the beginning of this year, with another 100 engines and 7,000 buses on order.

As a regional economic super-power, China is also extending its relations across the southern Asia and Pacific region. More than 3,000 Chinese state- and privately-owned businesses now operate across the Pacific area, while the Beijing government has just concluded a £2 billion aid package of preferential loans and tariff reductions for South Pacific island countries. China’s economic influence is becoming particularly pronounced in Malaysia, where Chinese companies have been taking over native ones. They are looking to be quoted on the Malaysian stock exchange later this year, with the intention of attracting finance to expand production of food and beverages in particular. Would-be investors will be promised a big return from profits.

Negotiations are ongoing with Australia to produce a Free Trade Area agreement in two years or so. China already exports extensively to Australia and has recently purchased that country’s biggest ethylene producer. Problems to be negotiated include the Chinese government’s subsidised development of western China and difficulties over intellectual property rights.

There are close relations between China and People’s Korea. The latter is establishing economic zones with Chinese advice and assistance, including the training of Workers Party cadres. China also exports grain to Korea.

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Democratic reform

D

etermined not to follow the Soviet policy of ‘glasnost’ into disorientation and collapse, the CPC has decided that political and democratic reform will be a gradual, prolonged process.

It has already begun through:

■ ■ ■ ■

More openness and the expression of different viewpoints in the mass media greater consultation between the party and government and other organisations in society increased powers for the National People’s Congress the CPC deepening its roots among the people, taking more account of their views and aspirations ■ elections to the village councils, where CPC members have to contest with other candidates.

Village councils are responsible for the upkeep of local roads and schools. They organise voluntary local workteams, women and men, who can be seen digging trenches for irrigation, pipelines etc. or paving over wasteland. The councils are elected every two years. The CPC regards it as important that party members stand for election in order to win people’s trust and support.

All candidates stand as ‘independents’, although the affiliation of CPC members is known and they are not always elected.

A programme on Village Governance has been run in conjunction with the European Union since 2001, organising 280 training courses and workshops on village elections and administration.

China’s mass broadcasting media are growing in range, coverage and sophistication. China Central TV – the main public sector service – now reaches 94 per cent of the population with about 15 channels specialising in news, drama, fashion, health, sport, geography, business, music etc., some aimed specifically at young audiences. There are also city, regional and provincial stations together with those broadcasting from Hong Kong and Taiwan as well as CNN and BBC World. Both the Chinese- and English-language press carry reports of large-scale accidents and disasters, criticisms of bureaucracy, accounts of corruption by state and party officials and policy ideas which go beyond official policy.

Contrary to outside perception, China is not a one-party state. There are eight other political parties, most of which date from the 1930s war of national resistance against Japanese aggression.

Their rights are guaranteed in the country’s constitution, and they participate fully in the National People’s Congress and the Chinese People’s Political Consultative Conference. Parties hostile to the CPC in the struggle for national and people’s liberation – notably the main section of the Kuomintang – were banned and, in the view of CPC representatives, they have no positive role to play in China’s economic, social and political development.

National and ethnic rights – the Uygur people The far-western Xinjiang-Uygur Autonomous Region has a population of 19.3 million, 60 per cent of whom are ethnic minority peoples (a proportion second only to Tibet), with a Muslim majority. Members of the single biggest group, the Uygurs, occupy the leading positions in the city government and CPC apparatus.

The Uygur people are Shi’ite Muslims. The mosques are well attended, although this and other requirements are not observed so devoutly among the younger generations. Furthermore, many local Muslims smoke, drink, eat pork and engage in other ‘forbidden’ activities. Our delegation was shown around a mosque by the imam’s daughter, herself a Muslim and a member of one of the region’s other ethnic minorities. While not a Communist, she appeared to be on very friendly terms with local municipal and party officials.

The schools in Xinjiang reflect the ethnic and linguistic composition of their catchment area, with Uygur the main language of instruction in some. Chinese is also taught, along with English China's line of march | 25

as the main foreign language.

The region is now linked to central and eastern China by the network of national highways.

These have been laid across the vast and empty expanses of western China. Xinjiang is linked to Beijing and Shanghai by NH 312. It takes one week to drive from the regional capital Urumqi to Beijing; the train journey is three days.

Approaching Urumqi by plane, the clearance of areas of dilapidated housing could be seen on the outskirts of the city. Landscaped areas of new apartment blocks and modern avenues could be seen next to older areas of Third World-level housing, small business premises and narrow dirt roads.

The city centre also displayed a mixture of dilapidated tenements, rudimentary business holdings, street markets for the poor, modern civic buildings and spectacular civic gardens, peeling concrete factories built in the 1950s, at least half a dozen functioning mosques, new residential apartment blocks, luxury hotels and Western-style department stores. Illuminated corporate logos tower over bilingual street-level hoardings written in Uygur (one of the Turkic family of languages written in Arabic script) and Chinese.

From 100,000 a few decades ago, the city’s population has risen to almost 3 million. Along the new 4-lane highway linking Urumqi with north-east China, some 20 miles east of the city, hundreds of wind-power turbines could be seen on the plain between two snow-capped mountain ranges. These provide much of the city’s electricity.

The city of Turpan lies east of Urumqi with a population of 600,000, 72 per cent of them ethnic minority peoples. In the city, couples of one or two ethnic minority partners can have two children (one only for Han Chinese couples) and, in surrounding rural areas, three. The main products of the local countryside are raisins, grapes (some used for wine) and a little cotton, all irrigated by water through underground tunnels. CPC membership in the city is 30,000 of whom 40 per cent are women. All ethnic groups are to be found in the party, and discussions at party meetings often have to be translated between the different languages.

Islamic fundamentalism There was a problem in the 1980s and early 1990s, mainly in the Xinjiang-Uygur region, with Islamic fundamentalists trained in Pakistan and Afghanistan. Bombs were planted in public places and government buildings and officials attacked in an effort to stir up the Muslim population against Communism and rule from Beijing. The terrorists had little public support and were swiftly isolated and smashed by the police and the courts. According to an official in the CPC international department, some Uygur and other citizens of China were being detained at Guantanamo Bay, although the US refused to confirm whether this is the case. Since our visit, not only has this been admitted by the US authorities, but five of them have been released and found refuge in Albania (after the German government refused to take them). It is significant that Chinese requests to the US that these and at least 15 other detainees be repatriated to China to face trial for terrorist offences have been refused.

The US funds the so-called World Uygur Congress through its National Endowment for Democracy programme. The congress website publishes prolific reports of alleged Chinese suppression of religious and linguistic rights in what it calls ‘East Turkestan’. One recent report included an address by the self-styled ‘president’ of the congress to the European Parliament on May 30 2006, where his wild claims included a statement that the Uygur language’s Arabic script had been ‘eliminated’ in the region by the Chinese authorities. Our delegation saw the script displayed prominently on every public road-sign, advertisement and notice-board. The WUC ‘president’ was formerly a journalist with the CIA-run Radio Free Europe during the Cold War. Similarly, the World Uygur Congress claims that Han Chinese ‘monopolise’ all official positions in the region – although our interpreters from Beijing were unable to translate speeches by party and municipal leaders in Urumqi and Turpan, all of whom were Uygurs who spoke frequently in their native tongue.

26 | China's line of march

Religious freedoms There are at least 100 million religious believers in China, about one in ten of the population with 100,000 places of worship and 300,000 clerics. The seven nationally registered religious associations (which include Buddhists, Taoists, Muslims and protestant and catholic Christians) enjoy rights guaranteed in law but must operate in conformity with legal requirements for national and ethnic unity and against any discrimination on religious grounds.

While our delegation was in China, the country played host to the World Buddhist Forum at Hangzhou city in the east. Many international guests met representatives of China’s 200,000 Buddhist monks and nuns and their 20,000 temples. On the eve of the event, the head of the Department of Religious Affairs declared that Buddhism could play a unique role in promoting a ‘harmonious society’ and contributing to world peace. The forum proceedings received wide publicity on Chinese television.

A banned cult, Falun Gong, is currently waging an international campaign against the Chinese regime and party, which some people may have confused with questions of religious and democratic rights. Falun Gong initially began as a physical health organisation, before taking on mystical and martial aspects. When the Falun Gong’s autocratic leadership launched aggressive campaigns against their critics, the cult was banned by the Chinese authorities in 1999. Since then, it has enjoyed considerable coverage in the Western media, although some of the sect’s extreme claims have now severely undermined its credibility.

While the CPB delegation was in China, hospital officials in Shenyang in Liaoning Province held a press conference to expose Falun Gong lies about the supposed incarceration of 6,000 followers whose organs had been harvested and their bodies burnt. The hospital staff cited numerous visits from US government officials, South Korean medical staff and Japanese and Hong Kong media organisations to refute the allegations. It would be interesting to discover how much publicity this event received in the West.

Gay rights Homosexuality is not a criminal offence in China, and there is no official policy of prosecution or persecution of people because of their sexual orientation. However, in matters of sexuality China is in many aeas a conservative country, and a widespread public view is that what one party official referred to as ‘this behaviour’ is totally unacceptable. People who come out can expect to be ostracised, especially in the countryside, although there are circles – notably in Shanghai and one or two other highly industrialised, modern cities – where attitudes are more relaxed. This is especially so in the case of many urban young people, including Communist Party members.

We also noticed in some hotels which cater for Western tourists that a number of the local male staff were flamboyantly ‘camp’, something which the guests seemed to enjoy and the other staff to accept happily. Some higher education courses now feature a more rational consideration of the question, promoting at least a degree of tolerance.

Even so, no public figures have yet announced themselves to be gay or lesbian.

The issue of HIV/Aids is still largely seen as a problem of contaminated blood transfusion supplies due to poverty and lack of cleanliness, rather than as having a connection with sexual and homosexual relations. Only now is this latter connection achieving some recognition as a wide range of education, care and treatment initiatives are being conducted by the Chinese authorities and international bodies such as the World Health Organisation.

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The Communist Party of China

T

he Chinese party currently has 70.8 million members (1 in 19 of the country’s population) organised in 3.45 million primary party organisations in enterprises, urban and rural areas, schools and institutions, government organs and the armed forces. Membership increases by two to three million a year – although growth reached 9 per cent in 2005 – and around half are aged below 35.

The 16th party congress in 2002 confirmed that the activity of the party is guided theoretically

by Marxism-Leninism-Mao Zedong Thought and the Four Cardinal Principles (outlined earlier), Deng Xiaoping Theory and Jiang Zemin's theory of the 'Three Represents'.

The theory of the ‘Three Represents’ sets out the role of the party in exercising state power by responding to the question: ‘What is socialism and how can it be built?’ The three represents are: ■ The CPC should always represent the forces of social development and the need for the most advanced productivity – all policies must therefore be orientated towards productivity and the enhancement of people’s living standards.

■ The CPC should always represent the orientation towards an advanced socialist culture which draws upon the best from other cultures, promotes tolerance and lifelong learning, enhances the quality of moral and scientific standards, and upholds the scientific approach and the goals of socialism and communism.

■ The CPC should always represent the fundamental interests of the overwhelming majority of the Chinese people, giving full play to people’s initiative and creativity, guaranteeing the development of the economy and society to benefit the people economically and politically.

Arguing for the party’s approach among workers in workplaces and in unions is a major area of low-level, grassroots activity for CPC members. The Chinese party does not see the need to campaign publicly with its newspapers and other propaganda, especially when its views are widely reflected in the mass media.

Prospective members can apply for membership individually, or may be approached by members and invited to apply. Applications from people of religious faith are usually not considered, on the grounds that belief in Marxism and in a god are regarded as incompatible.

However, in some regions of China where religious belief remains strong it would appear that the question is viewed as a ‘cultural’ one which should not automatically stand in the way of a successful application.

Before full party membership is attained, the candidate must serve a probationary period of 12 months, during which they undergo further assessment and political education. Notices of application are posted at workplaces so that fellow workers can express any views or objections about the worthiness of the applicant for party membership, which is clearly regarded as an honour. Any subsequent objections to a member’s conduct would also be examined by the party.

Applicants are thoroughly vetted: their family, former teachers and work colleagues (party and non-party) are interviewed about the background, integrity, discipline and attitudes of the person in question. (One of the municipal officials we met in Xi’an had initially been rejected for membership, and invited to reapply a year or two later after demonstrating her capacity for hard work and reliability).

This year, a new educational drive is being launched throughout the party across China on Marxist theory and party building, to take place in three phases: firstly, in the large urban centres; second, in the smaller urban centres; then third, in the rural areas. Several thousand of the party’s leading theoreticians are producing a wide range of publications to repopularise the principles of Marxism, including through some of the classic texts of Marx, Engels and Lenin.

According to Gao Yongzhong, Vice Secretary-general of the National Society for Party Construction Studies, ‘class conflicts still exist to a certain extent’ in Chinese society today.

28 | China's line of march

WANSHOU HOTEL CPC BRANCH The CPB delegation asked to meet the CPC branch of 15 full and two probationary members at this Beijing hotel, five of whom are women. Many foreign parties stay there, without any contact with the Communists who work at the hotel except for the service they provide as management or staff.The ovation we received at the branch meeting, with around 13 Chinese party members present, suggested that it was a unique occasion.

The hotel is a state-owned enterprise with 286 staff. All of them are voluntarily members of the appropriate ACFTU section, although it appears that the 50 trainee workers are not unionised.Three of the hotel’s four senior managers are women.The trade union branch has a women’s committee, although its role appeared to be mainly one of organising social events. The union branch undertakes a range of welfare, sporting and cultural activities.

Party membership at the hotel is open to application from everyone on the staff.At the moment, 46 other membership applications are at different stages of the process; four of them are close to being accepted.

The branch is attached to the International Department of the CPC, possibly because of the role it plays in accommodating foreign guests and delegations. The party committee leads the party’s work among the hotel staff which includes briefing colleagues on branch decisions and initiatives; issuing a monthly paper as well as other party documents; raising workplace issues (eg. discipline, accidents) with management comrades; holding reportback meetings for staff on National People’s Congress and CPC central committee meetings; promoting party events (eg. through posters in the staff dining room) such as the celebration of the August 8 entry of the Soviet Union into the war against Japan, which ensured victory; organising staff outings (eg. to a development zone, brewery or a site of historical significance for the CPC); and showing political films.

The Wanshou party branch meeting was studying the latest policy document on eight good and eight bad modes of conduct.The proceedings were formal,although this may have been the result of wanting to create a good impression with fully-prepared contributions from the members who took part in the discussion.

The policy document – printed on the blank side of hotel laundry forms in best environmentally-friendly fashion – was headed:‘A NEW CONCEPT: EIGHT HONOURS AND EIGHT DISGRACES’. The honours were: being patriotic; serving the people; respecting science; working hard; practising solidarity and mutual assistance; possessing integrity and credibility; abiding by laws and regulations; and living frugally and striving for goals.The disgraces are, broadly speaking, doing the opposite.

A woman party member introduced the document, after which six or seven other comrades made contributions.Among the issues raised were the need for the hotel staff to demonstrate their patriotism in their work;the application of theory to the smallest details of practice; the corrupting impact of obsessions with money; the dangers of blurring distinctions between good economic development and bad, giving rise to unharmonious elements in society; the importance of socialism and communism not being idenitified with poverty; the significance of August 8 1945 for the people as well as the CPC, tipping the balance of forces in favour of the CPC and the People's Liberation Army thereby paving the way for the People’s Republic in 1949; and the need for the CPC to enhance its advanced character. During the discussion, a number of comrades quoted from Mao and Deng Xiaoping.Towards the end of the meeting, committee members answered our questions.

The hotel general manager and party branch secretary Zhu Gui Ping chaired the meeting.As with the textile factory, his manner was relaxed and he seemed to enjoy a good relationship with staff, conducting himself without any of the aloofness or arrogance that might be expected from the head of a major international hotel in the West.

China's line of march | 29

However, they were not ‘at present’ the ‘primary factor’ in society.

‘Fully relying on the working class remains the basis of our party’s theory and policy’, comrade Gao declared, while at the same time recognising that there are ‘problems and challenges’ when it comes to handling labour relations. All Foreign-Invested Enterprises have to respect the rights and interests of Chinese workers, he pointed out, but some do not do so. This is of concern to party organisations and trades unions in the FIEs. Nevertheless, consultations and negotiations succeed in resolving most disputes. In his and the party’s view, there could be conflict between the longterm interests of the whole country (ie. served by productivity and strike-free production) and the short-term interests of individual workers (ie. their demand for better pay etc.)

‘The working class have made a great contribution to the ‘opening up’ policy, bearing great pressure in doing so’, Gao Yongzhong remarked. ‘The working class must remain the masters of our country’, he insisted, pointing out that state enterprises still account for 60 per cent of the economy and that ‘the public sector will remain the mainstay’.

Chinese party representatives were keen to discuss in depth the Communist Party of Britain’s views about developments in capitalism since 1945, the current international situation, the relevance of Marxism-Leninism today, the challenges and prospects for Communist Parties in the developed countries, the future development of the international Communist movement and the role and trajectory of socialist and social-democratic parties including Britain's Labour Party.

In talks with us, Vice-minister Zhang Zhijun of the CPC international department outlined what he claimed was the long-term historic decline of Western Communist Parties, notably in Italy and France, and interrogated us about how this could be reversed. He appeared to take a pessimistic view of the prospects. At the same time, he pointed to how the socialist and socialdemocratic parties had maintained support in some countries by abandoning social democracy in favour of ‘Third Way’ and neo-liberal positions.

It became evident in other, informal discussions that the ideas of Prof. Anthony Giddens, Peter Mandelson and other advocates of a New Labour ‘Third Way’ have been studied and discussed in CPC circles, and may be taken by some as examples of how private finance and managerial ‘expertise’ can be utilised in the public sector ostensibly for public objectives. The reality of internal markets, PFI, PPP and privatisation as they operate in Britain does not appear to have been studied or discussed with equal rigour. We had to explain that Britain had once been able to invest large amounts of capital in our public services under public ownership – and that PFI and PPP are part of a costly and corrupt drive to convert the public sector into a lucrative source of profit for private capital.

It also came as a surprise to some Chinese comrades that these Tory and New Labour policies enjoy so little support in Britain and that Giddens and the ‘Third Way’ notion now meet with widespread derision in left and social-democratic circles here.

30 | China's line of march

Conclusions and prospects Is China socialist?

Is China a socialist society? Whether or not China has been or still is, does the Communist Party of China retain its perspective of developing socialism in its country? Or is China taking the capitalist road, having abandoned socialist objectives?

Even on the basis of much study and discussion, the CPB delegation believes it would be presumptuous to claim to know the definitive and correct answers to such questions after just ten days in China.

But we have seen and learnt enough to be sure that socialists and progressives in the West should not rush to judgement on the basis of scant information, much of which is distorted through the prism of our state and capitalist monopoly media. When they are reported in the West at all, positive features and developments in China are invariably presented as the results of that country supposedly embracing capitalism and the ‘free’ market. Negative features and developments, on the other hand, are almost always attributed to the survivals of ‘communism’ or Communist Party rule.

According to the General Programme of the CPC: China is at the primary stage of socialism, and will remain so for a long period of time. This is an historical stage which cannot be skipped in socialist modernisation in China, which is backward economically and culturally. It will last for over a hundred years. In socialist construction we must proceed from our specific conditions and take the path to socialism with Chinese characteristics.

While the Chinese party maintains its commitment to Marxism-Leninism as a tool of analysis and approach, it contends that Marx could not have anticipated all the answers to the problems of developing a modern economy in China’s conditions. The country faced the overwhelming need to develop rapidly after the dislocations of the Cultural Revolution. Moreover, the widening disparities between the coastal strip and inland China had to be addressed.

With no blueprint available for immediately staving off mass destitution while simultaneously advancing straight to industrialised, developed socialism, China’s Communists had to chart their own way forward. They had to engage in a massive extension of urban and industrial development without the huge resources accrued from imperialism by advanced countries such as Britain, the US, France or Germany.

Lenin and the Bolsheviks faced similar dilemmas soon after the 1917 revolutions in Russia.

After three years of state ownership and control of the economy in order to defeat the domestic and foreign forces of counter-revolution, ‘war communism’ was replaced by the New Economic Policy in 1921. In order to combat widespread ruination and the prospect of famine, the peasants were allowed to keep and market a proportion of their produce, small-scale private industry was permitted, some state enterprises were leased out and – under strict state control – foreign capitalists were invited to invest in the development of Russia’s natural and human resources.

In defence of the NEP, Lenin made many of the same points as Deng Xiaoping and CPC representatives make today in defence of China’s current course: that market mechanisms and incentives had to be utilised to stimulate production, particularly of vital food and fuel for the urban areas; that no immediate, large-scale alternative source of capital and technology existed to that offered by foreign capital; that socialism could not be built on the basis of mass poverty; and that such rapid industrial development would, despite the dangers, also ensure the rapid growth of an industrial proletariat as potentially the most resolute and disciplined force for building socialism.

Lenin defined what he came to believe would be a prolonged stage in the Soviet Union’s development as ‘state capitalism’, pointing out that it would prepare the material basis for the China's line of march | 31

transition to socialism in what had been an underdeveloped society. He insisted that there was a fundamental difference between this type of state capitalism – which was governed by working class state power and its Communist party – and the ‘state capitalism’ in which the capitalist state uses its power to defend and promote private capital. Neither type, incidentally, bears any resemblance to the semi-Trotskyist theory of ‘state capitalism’ formulated in the 1950s to attack the Soviet Union and Communist Party rule.

Although the NEP began to be dismantled in 1926, after Lenin’s death, his last speeches and writings indicate that he did not view it as a short-term expediency. He saw some NEP tasks taking ‘generations’ (transforming the outlook of the propertied peasants) and ‘at best ten or twenty years’ (organising the mass of people into co-operatives – a task neglected at the outset of the NEP). Deng Xiaoping talked of China needing at least 100 years to build a socialist market economy.

Of course, China in the last quarter of the 20th century was not Russia in the first quarter. Yet their crises displayed similar symptoms, and their remedies strongly resemble one another. Have the Chinese Communists abandoned the essential features of a socialist society – albeit one in an early stage of development – in order to embrace market forces and foreign capital?

It appears to us that the essential characteristics of a socialist society in the primary stage of construction remain in place, although as Lenin pointed out the dangers and contradictions of utilising capital and the market should not be underestimated.

Economic and social development is planned in accordance with society’s goals as determined by the Communist Party and its allies.

Land is still in public ownership, while state and other forms of social ownership continue to dominate most key sectors of industry and commerce. Of all the value added in China’s industrial, construction and energy sectors in 2005, the state and socially-owned and controlled enterprises accounted for about 45 per cent; this proportion rises to almost half if small enterprises are included. About one-third of industrial workers are employed by state and collective enterprises.

Then there is the large public sector of government, transport and central banking employees.

Agriculture comprises municipal and co-operative as well as household and private enterprises.

The state and socially-owned enterprises fund between 72 and 86 per cent of the annual investment in industrial and residential fixed assets.

Foreign capitalists operate on terms set by central and municipal governments and have no significant mechanism whereby they can exercise collective political influence, still less mobilise to achieve political power.

Industrial, construction and energy enterprises owned by native Chinese capitalists earn profits less than one-quarter of those enjoyed by state and collective enterprises. For all the publicity given to the lavish lifestyles of some Chinese entrepreneurs, they continue to be a small minority who – despite membership of the CPC in some cases – exercise no political power as individuals or as a class.

The question is, of course, could this change? Our concern was that the emphasis on turning services into commodities, on commodity production and acquisition could – combined with further extension of private ownership of economic and commercial and residential property leases – serve to undermine and destabilise China’s socialist system.

Old and new contradictions The General Programme of the CPC, set out in the party’s constitution, continues: At the present stage, the principal contradiction in Chinese society is one between the evergrowing material and cultural needs of the people and the low level of production. Owing to both domestic circumstances and influences from abroad, class struggle will continue to exist within a certain scope for a long time, and may possibly grow acute under certain conditions, but it is no longer the principal contradiction. In building socialism, our fundamental task is to further release and develop the productive forces, and achieve socialist modernisation step 32 | China's line of march

by step ... We must uphold and improve the basic economic system, with public ownership playing the dominant role and diverse forms of ownership developing side by side ...

A recent survey by the IBM Institute for Business Value identifies 60 Chinese companies as having the potential to become significant transnational corporations on a global scale. Many of them are already major producers for a massive domestic market in household appliances, computer products, consumer electronics, telecommunications equipment, motors, steel and petrochemicals; most are developing their export or overseas investment operations and they enjoy state support.

But most significantly, 47 of the 60 are state-owned enterprises. They could represent rich pickings for private domestic or foreign capital. Already, there are prominent voices in some sections of academia and the media which promote the private sector as the main answer to China’s unemployment, education and banking problems.

Other openings have been created for the most parasitic sections of finance capital to exploit.

There are already numerous commodity futures exchanges in China. Pressure is also building up to allow private equity funds to operate in China’s stock exchanges, even though the likelihood is that much of the investment capital would come from overseas. As we know in the West, any socially-useful functions of such mechanisms (eg. as a hedge against future inflation or a source of investment capital) are swiftly overtaken by the speculators, profiteers and asset-strippers.

Despite government and municipal programmes, very little of the new residential development is for lower-cost housing. The central government has recently introduced a barrage of measures to discourage the luxury market and profiteering through the selling-on of leasing rights and their properties. But Western property groups and local ‘investors’ in the housing market have established themselves, bringing to China the fundamentally anti-social, parasitic features of the capitalist housing market.

The massive expansion of foreign capital in China, stimulated further by China’s acceptance of World Trade Organisation rules on market liberalisation, is producing a new contradiction. At the National People’s Congress in March 2006, former top state official Li Deshui warned that ‘if China lets multinationals’ malicious mergers and acquisitions go ahead freely, China can only act as labour in the global supply chain’. His concern was that core parts, key technologies and the high added value of leading Chinese-owned enterprises would be ‘completely controlled by multinationals’. Li had cited the equipment-making, hypermarket and cosmetics sectors as examples of foreign monopolisation; foreign investors have also taken major stakes in China’s financial institutions over the past year.

Even the pro-private enterprise China Daily conceded that ‘the explosive increase in Foreign Direct Investment has given multinationals a degree of market power that many Chinese find worrying and potentially damaging to the development of domestic enterprises’.

Foreign capital engaged in mergers and acquisitions worth $37 billion in China in 2005, up from $33 billion the previous year. At the same time, China's annual trade surplus of £50-60 billion with the rest of the world is due in no small part to the predominant share (58 per cent) of the country's exports manufactured by foreign-invested enterprises. One concern in China is that too much of their production for export is based on relatively low-skilled assembly work applied to imported high-value components, making cheap Chinese labour the source of substantial profit while transferring little technology or advanced product production to the Chinese end of the operation.

Although Li Deshui's widely-publicised remarks were opposed by a representative of the AllChina Federation of Industry and Commerce, they reflected a growing ‘economic patriotism’ and protectionism which has been strengthened by recent US and EU measures against Chinese exports and overseas takeover bids.

It may not be entirely coincidental, therefore, that the Chinese Ministry of Commerce has been blocking attempts by Caterpillar and the Carlyle Group to buy up some of China’s leading construction equipment companies. A new anti-monopoly law on mergers and acquisitions is China's line of march | 33

also to be drafted by a standing committee of the National People’s Congress.

The controversy at this year’s National People’s Congress about a new private property law could signify an even deeper ideological struggle. The draft law had declared private property to be ‘inviolable’ and proposed to place its status on the same constitutional footing as state and public property. But even before the congress opened in March, Professor Gong Xiantian had protested that the draft law failed to declare that ‘socialist property is inviolable’, accusing the authors of ‘copying capitalist civil law like slaves’ and offering equal protection to ‘a rich man’s car and a beggar man’s stick’. Delegates to the congress voiced similar views before the draft law was referred back to a standing committee for review and possible amendment late in 2006.

There is also a public debate rumbling on about the need to emphasise social equity more and economic growth a little less. Party general secretary Hu Jintao is regarded as being more inclined to this view than his predecessors, although since the congress he has also made clear his determination to press ahead with the ‘socialist market economy’ and the opening-up process.

The trade unions The role of trades unions in China – especially their support for pay restraint (notwithstanding the availability of profit-sharing bonuses), increased productivity and arbitration settlements in line with national government objectives – raises difficult questions for Communists and trade unionists in Britain whose experience is of very different conditions and traditions.

At the same time, it should be remembered that there have been periods when the British trade union movement has had similar priorities to those of China today, when stoppages were opposed and priority was given to achieving full employment and production. During the Second World War, Communists took the lead in the call for maximised production to defeat fascism. Our party had to take on the question of ‘greater and lesser principles’, which led us to support postponing the domestic industrial class struggle in order to defeat fascism. We experienced ferocious attacks and accusations of ‘selling out’ from Trotskyists who failed to give priority to the fight against fascism while proposing world revolution.

China’s parallel to our war against fascism was the chaos after Mao’s ‘Great Leap Forward’ and the Cultural Revolution, when millions of people faced starvation in conditions only equalled by the Irish potato famine of the 1840s. The priority then as now was to defeat the poverty from which many workers in the new industry have escaped – and which their families back home still face.

Lenin was also very clear about the role of the Soviet trade unions in the period of the NEP. While foreign capitalists would be required to negotiate terms with trade unions, Lenin reassured them that they would not be subject to ‘incredible demands’ and ‘absurdities’ from Communist groups within the unions.

He went further in a ‘Report on the Role and Functions of the Trade Unions under the New Economic Policy’ in January 1922. Not only were the state enterprises to be placed on a commercial profit-making basis, but the unions should adopt a different approach to disputes and strikes than in pre-revolutionary times. The ultimate object of their every action should now be to fortify the transitional proletarian state, including fighting against every bureaucratic distortion and mistake on the part of the state itself. They should also ‘curb the class attitudes’ of those capitalists who try to evade state control. But in a proletarian state, strikes could only arise when bureaucratic distortions and survivals of capitalism existed, including political immaturity and cultural backwardness among masses of the working class itself. Lenin continued: ‘... the task of the trade unions is to facilitate the speediest and smoothest settlement of these disputes to the maximum advantage of the groups of workers they represent, taking care, however, not to prejudice the interests of other groups of workers and the development of the workers’ state and its economy as a whole; for only this development can lay the foundations for the material and cultural welfare of the working class. The only correct, sound and expedient method of removing friction and of settling disputes ... is for the trade unions to 34 | China's line of march

act as mediators and through their competent bodies either to enter into negotiations with the competent business organisations on the basis of precise demands and proposals formulated by both sides, or appeal to higher state bodies’.

In the state industries in particular, one of the most important and infallible tests of trade union correctness and success would be ‘the degree to which they succeed in averting mass disputes’.

This was precisely the approach – and these were in essence the arguments – put to the CPB delegation by ACFTU representatives and by the chair of the trade union branch at Beijing Hyundai, although they rightly advanced them in the context of China’s situation today rather than Russia’s situation in the 1920s.

We raised with union representatives the risk that they might alienate young, militant workers from the trade unions and the party. They were aware of the dangers, but believed that experience and, above all, political explanation and education would overcome them.

The CPB delegation also made the point in discussions that we had much to learn about China, but that we might also know more about labour relations within Western transnational corporations. This point appeared to be greatly appreciated. British and other trade unions in the capitalist world should be actively assisting their Chinese comrades with information and practical advice. While the ACFTU and its affiliates operate within a unique framework, unions in the West have developed areas of expertise in such areas as organising, negotiating, recruitment, equalities, representation, management techniques and industrial action. Closer relations between the British TUC, regional TUCs and individual unions and their counterparts in China – based on the principles of solidarity, mutual respect and non-interference in one another’s internal affairs – would be the fulfilment of our internationalist duty. It would also be the correct and more fruitful basis on which to raise matters of concern about economic, trade union and democratic matters.

Economic relations The TUC conference in 2005 adopted a resolution which concentrated on the negative impact of China’s economic progress on jobs and the balance of trade with Britain. There were also some presumptuous references to workers’ and democratic rights. This approach will not produce any positive outcomes. The reasons for Britain’s trade imbalance with China are basically the same as those for our poor trading performance generally – lack of investment by the British capitalist class and and the state in the British economy and notably in its industrial base, R & D, new technology and skills. We have no equivalent to the kind of government-led, integrated drive which has produced the Xi’an hi-tech development zone.

Even so, China’s economic development offers enormous opportunities for British exports.

Germany has moved into trade surplus with China through concentrating on exports of the kind which China needs. During our stay, a Chinese delegation in the US concluded a trade deal involving 107 contracts with US firms to buy £9 billion of goods including aeroplanes, electronics, car parts, power generation equipment, software, soya beans and cotton.

For as long as the British economy relies upon armaments exports to maintain large sectors of our industrial base, R&D and the balance of payments, Britain’s unions should be leading the fight to lift US-inspired embargoes by the EU on arms exports to China, just as they should press the British government to ignore US diktats against the export of some hi-tech goods to China (which the US fears could be used for military purposes).

When asked about the current imbalance of trade with Britain, where China exports far more than it imports, the response of Chinese officials was to point out that their country had bought airliners from the European Airbus consortium (which includes BAE Systems) and that their economy needs hi-tech imports and products to improve the environment. More specifically, Vice-minister Liu Shijin at the Development Research Centre indicated some of the goods and services which China needs to import (and which therefore present opportunities to British exporters). These include mechanical equipment; electronic control systems; other hi-tech China's line of march | 35

products including in the fields of energy conservation and environmental protection; wine and tobacco and ‘luxury’ products; and financial services including technical systems. Trade delegations to China should investigate that country's import needs rather than go there with potential products already in mind.

This means that a long view required to plan trade, agree contracts and set the terms, with China preferring to deal with government-sponsored trade delegations which might also involve the granting of trade credits (in fact, the kind of approach which British governments adopt in relation to armaments sales).

Then there is the revenue and goodwill which universities in Britain gain from the 53,000 Chinese students studying here – but which is likely to shrink substantially from this year onwards. According to Chinese press reports, prospective applicants for places in Britain are being put off by the sharp increases in fees for overseas students here, the low profile of most nonOxbridge universities, the poor quality of some courses and the growing readiness of US universities to provide an attractive alternative.

Chinese capital could play a bigger role in sustaining jobs, industries and local communities in Britain, where British capital and the British state are failing to do so. For example, Chinese enterprise in the USA has established a home appliances production centre in South Carolina, which is being followed by the formation of a China-South Carolina economic, trade and investment forum. Sponsored by the South Carolina state government and the China Chamber of Commerce in the US, the forum will also promote exchange and co-operation in the fields of culture, tourism and science and technology.

Democratic reform China’s path to greatr democracy is not necessarily applicable to capitalist class-divided societies.

In Britain and other Western states, the tradition of competing parties representing – or purporting to represent – fundamentally contradictory interests is firmly embedded, to the extent that moving away from such a system would be seen by many people as the most severe and unacceptable curtailment of democratic rights.

We see no significant case and came across no evidence in China itself that the establishment of pro-capitalist political parties would be beneficial or popular.

Instead, greater public involvement in discussion, decision-making and administration is growing through a wide range of civic and state structures, albeit in a closely controlled way. This is the development of democracy in Chinese conditions. While it is not to the liking of imperialism – which would like to see Communist Party rule come to an end at any cost to the Chinese people – we stand in solidarity China’s Communists and the path they have chosen.

Developing links between Britain and China The historic responsiblity which now rests upon the Communist Party of China to build a socialist society and to act as a powerful force for peace and progress in the world is fully appreciated by CPC representatives. The Chinese party maintains its adherence to MarxismLeninism as applied to Chinese conditions, although examples have arisen in the former Soviet Union and elsewhere of how that adherence can become merely formal for significant sections of an erstwhile Communist party. For its part, the Communist Party of Britain will maintain and seek to strengthen its relations with the CPC, both in order to deepen our understanding of developments in China and in order to more effectively express our solidarity with China’s Communists in their struggle to build socialism and resist imperialist opposition to their country’s further development.

We believe that socialists, progressives and democrats in Britain should adopt a more constructive and supportive approach to relations with People’s China. Closer links and greater knowledge are the preconditions for engaging in any constructive criticism of aspects of China’s policies. They would also enable the peoples of our two countries to benefit mutually from the economic, social and cultural relations which develop.

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In particular, greater contacts between trade union and women’s organisations in our respective countries, between municipalities and between schools, would deepen understanding on both sides to the benefit of working people.

For information from China: All-China Federation of Trade Unions http://www.acftu.org.cn/index2.htm All-China Women's Federation http://www.women.org.cn/english/index.htm Beijing Review http://www.bjreview.com.cn/ Central Television http://english.cctv.com/index.shtml/ China Internet Information Centre http://www.china.org.cn/english/index.htm Communist Party of China http://english.cpc.people.com.cn/ Communist Party of China international department http://www.idcpc.org.cn/ People's Daily http://english.peopledaily.com.cn/ Xinhua News Agency http://www.chinaview.cn/ China's line of march | 37