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(The online version of this article appears in three parts. Click here to go to part one or part three.)

IN the spring of 1989 Peter Schweitzer covered the student protests in Beijing for CBS. Now a senior producer, he recalls with chagrin how he and his colleagues threw journalistic objectivity to the winds. "In Poland," he remembers, "the weakening of the Communist regime had made the Western press corps into hopeless romantics. We became friends with the Chinese students, even exchanging material about democracy with them. We believed that it was going to happen, that democracy was inevitable."

The origins of the movement among Chinese students were less romantic, and less clearly about democracy per se. At the time, I was a student at Beijing Normal University, where I had been studying for two years. Living and working on the same campus as Chai Ling and Wu'er Kaixi, who would soon take command in Tiananmen Square, I knew that the students were primarily upset about the unfairness of economic reforms. I admired the gumption of my classmates -- they were furious that Deng Xiaoping's fondness for capitalism was making the watermelon vendors outside the university gate wealthier than the students themselves could ever hope to become. The Party had a new penchant for black Mercedes limousines, and this irked them too. But as Perry Link, a Princeton professor who helped to spirit the famous dissident Fang Lizhi to safety in the American embassy that year, puts it, "The students were mainly frustrated that corruption in the Communist Party was blocking nationalist progress. They wanted themselves and their country to get rich."

The students' political style, too, was not so democratic. Many China watchers, especially those who were on Beijing campuses and in Tiananmen Square, agree that the students knew little of American-style democracy beyond its catchphrases and icons, and were reacting more to their own irrelevance in the reform program than to their country's political system.

For China's leaders, the threat of Tiananmen came more from workers than from students. After Tiananmen, Robin Munro, a researcher at the Hong Kong office of Human Rights Watch, teamed up with George Black, the foreign editor of The Nation, to study the movement. Months of exhaustive interviews revealed that the students and the government had close ties, sharing not only a political culture but also an elitist hostility toward the rumbling tide of working-class dissent. To be sure, the Goddess of Democracy that students erected in the square insulted the government, but, Munro and Black wrote in their final report, "the crude red and black banner of the BWAF [Beijing Workers' Autonomous Federation], less than a hundred yards away, signified the more terrifying power."

Indeed, the regime's economic reformers -- Deng Xiaoping and his protégés -- had reason to be afraid. Throughout the 1980s the promises made to workers, including the celebrated "iron rice bowl," had melted away as the reforms unleashed limited-term contracts, cheap migrant labor, income inequality, inflation, and official profiteering. Surveys of working-class opinion in the mid-1980s had exposed fury at factory managers who were acting like the unscrupulous capitalists of old China. On October 1, 1985, Beijing bus workers had staged a strike that affected the entire capital. By 1988 an average of two or three strikes a day were being called in China. The students in Tiananmen Square were of little consequence alongside the worker unrest their movement was inspiring. There is evidence that when the government finally resorted to terror to suppress the movement, it deliberately dealt a more brutal blow to workers than it did to students.

This is why Elizabeth Perry says that Tiananmen was most significant as a Marxist movement. Perry quotes from a manifesto issued by the rebellious BWAF at the height of the 1989 protests: "We have carefully considered the exploitation of the workers. Marx's Capital provided us with a method for understanding the character of our oppression .... Bureaucrats use the people's hard-earned money to build luxury villas ... to buy luxury cars, to travel to foreign countries." Against a Communist Party that was converting itself into a class of capitalists, the workers held the moral (and Marxist) high ground.

In 1989 it was ground that conservatives in the Communist leadership were eager to exploit. For them, Deng's economic reforms had already gone too far. In 1966 the Cultural Revolution had begun with student radicals in the streets; it had led to a revival of pure Communist ideals and the toppling of economic pragmatists. The most powerful of those pragmatists had been Deng himself; he was unlikely to make the same mistake twice. In the weird calculus of Chinese politics -- and contrary to the conventional wisdom on Tiananmen -- Deng's 1989 crackdown on dissent was as much a rejection of hard-line communism as a return to it.

IN one of China's industrial cities a Western manager I'll call Carl runs a small factory. The housing block where he and his wife reside is average by Western standards but luxurious for locals; most of its occupants come from China's nouveaux riches. Carl drove me there in his modest Chinese-made car. To reach the guarded gate we negotiated an endless stream of bicycling citizenry; on the way in we barely avoided a lumbering donkey cart piled with dirty peasants and recycled cardboard. Once inside, Carl parked among the cars of his Chinese neighbors: several brand-new Mercedes Benzes, a selection of shiny Cadillacs, an Italian sports car, and an American stretch limo.

In the mid-1980s the city's factory managers were given unprecedented freedom to pursue profits. Today the downtown is thriving: new businesses are everywhere, and even in the state-run market one can buy almost anything. One vendor offered me a comrade's discount on a cigarette lighter in the shape of a Cupid, with glowing red eyes and a flame penis. Behind an unmarked rubber curtain I found a market where mobs of consumers jostled through a long hall of stalls selling pirated movies and software on CD. I calculated that for the price of a lunch in the United States, I could pick up ten or twenty of the latest American films and the newest version of Microsoft Windows NT. Carl had told me that most of the fancy cars parked outside his apartment building had been smuggled into the city from abroad.

The illicit side of reform in the city is a reminder that corruption and inequality have permeated the process -- and generated festering reserves of ill will. I asked a U.S. Foreign Service officer and an American automobile executive, both of whom worked in the region, whether Party cadres retained any credibility. They had similar reactions. The city's government officials, they said, infuriatingly corrupt and keen to skim profits, used their new entrepreneurial skills at every turn to block progress toward efficient management.

Carl's factory, however, is a clean, friendly place with modern machinery and proper pollution control. One of two Western managers overseeing a staff of local workers, Carl speaks Chinese fluently and enjoys an easy rapport with his employees. On the day I visited, I lunched with the workers on tasty cafeteria food and then joined them to cheer as one of their own trounced Carl in a good-natured game of Ping-Pong, a common occurrence in the factory's spacious recreation room.

The scene across the street was far more representative of the city: there sprawled a decrepit state-owned factory, shoddily constructed of brick, now crumbling and dusted with a heavy layer of soot. Until recently workers had toiled there in exchange for government IOUs. Declared bankrupt under China's new market system, the factory had been abandoned. "We've seen a lot of protests and riots lately," Carl told me. "Laid-off state workers want their back pay -- not to mention their jobs. I've been late for work a few times when crowds of state-owned-factory retirees were protesting in the streets. They haven't gotten a pension payment for many months."

The recent history of labor strife in this area of China has attracted the attention of Elizabeth Perry, of the Fairbank Center. She considers the region one of China's most volatile -- indeed, it has been a hotbed of Communist revolt for several years. An example of labor unrest she gives occurred just a few years ago, when more than 5,000 workers at the local steel works took to the streets shouting "Down with the newborn bourgeoisie," "Yes to socialism, no to capitalism," and "Long live the working class." A similar protest took place in front of the government offices the following year.

It is estimated that about a quarter of all state workers in the city had been laid off by 1994; that's probably too few to prevent the ailing state-owned sector from dragging the economy into collapse and taking the country along with it. For decades China's industries simply followed the government's economic plan; they never learned how to keep proper accounts, be efficient, or turn a profit. Almost half of them lose money; they are kept afloat by government debt, and generally they employ far more workers than they need. Gao Shangquan, formerly a vice-minister of China's powerful State Commission on Economic Restructuring, now a professor at Beijing University and the director of an economic think tank, told me recently that he calculates the number of redundant workers still clogging China's state industries to be around 24 million.

Some observers have been impressed not by how much worker unrest China has seen but by how little. China's reformers managed to appease many laid-off state workers in past years by furloughing them on reduced salaries, with benefits, rather than firing them outright. However, the plight of the workers appears to be getting worse. Chinese government statistics indicate that in 1998 the ranks of state workers fell by almost 20 million, a huge reduction over previous years. Admittedly, this figure is difficult to interpret, because part of the change may simply be due to the reclassification of furloughed workers as no longer employed by the state. But the government does anticipate additional large layoffs in textiles, steel, railroads, coal mining, and the military over the coming months.

Thomas Rawski is a China specialist in the economics department at the University of Pittsburgh. "Employment growth in other sectors has stalled, and government policies to boost employment are ineffective," he told me not long ago. "And yet the reform process can't be undone. The lower levels of government have already been told they can lay off workers. Even if the policymakers at the top change their minds, it's too late to reverse direction."


(The online version of this article appears in three parts. Click here to go to part one or part three.)

Trevor Corson is a contributing editor and the acting managing editor of Transition magazine, at Harvard University. His essays and reviews have appeared in The American Prospect, AsianWeek, and Dollars and Sense.

Copyright © 2000 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; February 2000; China's Blue Collar Blues - 00.02 (Part Two); Volume 285, No. 2; page 20-33.