Unemployed and unconvinced

Zhou Wenxi considers herself unemployed. Not that you would guess it from the piles of bath mats, soap dishes and toilet brushes at her stall in Shenyang's Wuai market and the wad of banknotes in her hand. Like millions of other laid-off workers in China's northeastern rust-belt, the 32-year-old former factory worker has found a way to survive in the private economy. Such small-scale private enterprise may be the reason why China has so far avoided a social explosion despite soaring joblessness, and why the Communist government is actively promoting the non-state sector.

However, while businesses like Zhou's provide day-to-day living expenses, they do nothing to ease deep-seated fears about the future for people who were once guaranteed comprehensive welfare for life in the state sector. ´´I have just enough to live on after I've paid my expenses and bills,'' says Zhou, thrusting a shower curtain towards a potential customer: ´´I live day to day, but I worry about tomorrow.''

On the streets of Shenyang, it is hard to meet people who do not consider themselves unemployed - victims of a campaign launched in 1997 to restructure state industry through mergers, acquisitions and bankruptcies. Yet the vast majority of people are involved in some sort of small-scale private enterprise - selling everything from bath mats to baby clothes, pineapples to puppets. Former latheworkers pedal bicycle rickshaws. Ex-floor managers serve spicy noodles from streetside stalls. Young female textile workers moonlight in the legions of seedy karaoke halls, beauty parlours and coffee houses. Most earn more than they ever could in the state sector. Like hundreds of thousands of Shenyang residents, Zhou used to work in one of the vast factories built in the 1950s when this capital of northeastern Liaoning province was designated a production base for heavy industry. When her outdated, over-staffed and loss-making heavy machinery factory slashed its payroll in 1997, Zhou was ´´xiagang'' - sent home on a minimal daily allowance of about $1 a day. Zhou says she never received a penny of the allowance. But instead of demonstrating with fellow ´´xiagang'' workers, she borrowed money from friends and relatives and bought the market stall that has been her livelihood ever since. ´´What's the point of protesting?'' she says: ´´The company has no money to pay you. The government has none either. You can only rely on yourself.''

Now the government is trying to tap this entrepreneurial spirit to create many of the 300,000 jobs needed each year to absorb the jobless, ´´xiagang'', and newly-

graduated in the city of 5.5 million. ´´A few years ago, we hardly had any shops, restaurants, or markets, so there is enormous opportunity in the service sector for xiagang workers,'' says Sun Jie, deputy director of the Shenyang Labour and Social Security Bureau employment office. To encourage such enterprise, the labour bureau offers many laid-off workers a one-off payment of 10,000 yuan ($1,200), instead of the monthly 250-300 yuan living allowance.

According to labour bureau statistics, 66 percent of those workers take up the offer. The government also offers three-year tax breaks to ´´xiagang'' workers starting their own businesses and has opened several large retail markets like Wuai to house Shenyang's new entrepreneurs, according to Sun. Liaoning governor Zhang Guoguang says these enterprises will play a key role as the province struggles to find jobs for more than a million workers ´´xiagang'' or laid off last year alone. ´´Under the planned economy, we were a base for raw materials, processing and manufacturing,'' said Zhang: ´´This is no longer suited to economic development. The basic method in Liaoning now is to develop tertiary industry.''

This new approach to job creation reflects a change in the constitution last year to elevate the private sector to an "important component' of the economy, analysts say.

´´Until now they've been talking about reinvigorating state-owned enterprise and letting them lead the economy,'' says a Western diplomat researching welfare reform: ´´If they see tertiary industry as a way to get at this unemployment problem, that's definitely a shift for the better. I think it's the only option. I don't think state enterprises are ever going to rebound in the sense of being able to then re-employ millions of workers.'' The province has identified almost 500 state-owned enterprises in trouble, Zhang says. Of those 60 would be given special help. The rest would be left to sink or swim. As Liaoning presses ahead with these state sector reforms, the private sector's share of the economy steadily increases. Official figures show

the state sector accounted for

51.1 percent of Liaoning's GDP

in 1999, compared with 59.3 percent in 1997.

From the Shenyang government's point of view, the re-employment drive has been a success. In its eyes, Zhou and her fellow stallholders are no longer jobless. The city's official unemployment rate is just 2.1 percent - well below the official national average of 3.1 percent. Of Shenyang's 592,000 ´´xiagang'' workers, 494,000 have found new jobs. But the populace seems unconvinced. ´´Two percent unemployment?'' exclaims Zhou: ´´You must be kidding. More like 70 or 80 percent. Look around you. All these people are xiagang or unemployed.'' Zhou earns 600-800 yuan per month from her stall, almost double what she made in the state sector. She still lives rent-free in the housing provided by her former employer. But she must now pay her own water and electricity bills, and with no pension or medical insurance she is haunted by fears about the future.

´´What we are all afraid of is getting sick and getting old,'' says Zhou's former colleague Li, who now sells underwear at a nearby stall. Those fears more than anything are what drive people onto the streets of Shenyang. Local people and government officials say demonstrations by ´´xiagang'' and unemployed workers are rare in the the city. ´´If you're young and able, why waste your time shouting on the streets?'' asks Li, 34: ´´They'll just send in the police and you'll be in even more trouble.''

But retired workers demanding higher pension payments regularly block streets and stage protests in Shenyang's former industrial district of Tiexi, now a graveyard of industrial relics, according to local residents. ´´I guess they've got nothing to lose,'' said Li: ´´I get by today, but one day I may be like them.''

Freitag, 14. Juli 2000