As employment in China shifts from modest but secure lifelong state jobs to better paid but less secure open market jobs, uncertainty looms for many, writes Fintan O'Toole in Shanghai
Zhao Ting Ying has the deep tan of a peasant who works in the fields under the burning Chinese sun. As he stands amid the glass-and-steel towers of Shanghai's sparkling new business district, Pudong, it would be easy to mistake him for a country bumpkin out of place in the big city. But later, in his small apartment in a low, tatty block that seems equally ill at ease in this showcase of the new, thrusting business-friendly China, he explains the tan. When I ask him what he does all day, he points to the deep brown pigment on his arms and face and then unzips a big black bag that leans against the wall. Inside is the fishing rod that helps him get through the days. He is a member of the legion of laid-off workers who stand like imperial guards around every accessible area of water in every Chinese city, their fishing lines dangling in the stream, passing the time.
Zhao was born in 1949 and is thus the same age as the People's Republic of China. He has lived through what must seem like whole historical eras.
His earliest years were spent in the countryside in Shandong Province. Then the family moved to China's most westernised city, Shanghai. After he left middle school, the Cultural Revolution began. He was now an "educated youth" - not a good thing to be in the midst of Mao Zedong's demented campaign to glorify ignorance and root out the cancer of intellectualism. In 1969, he was sent to the far north-eastern province of Heilongjiang, near the border with the then Soviet Union, to "learn from the peasants". It was 10 years until, after Mao's death, he was allowed to return to Shanghai, having gained at least one good thing from the experience: a wife who was also exiled as an educated youth.
Back in the city, he got a job in the Shanghai Railway Bureau, helping to manage the safety systems for the cargo trains. Having been away for so long, he had no established place to live, so he, his wife and their son moved into an area that Shanghai residents tended to regard almost as the equivalent of the enforced rustications of the Cultural Revolution. Across the Huangpu River from the famous colonial waterfront buildings of the Bund - in what used to be the British concession - lay Pudong, an area of slums, brothels and rice fields. Zhao remembers an old Shanghai saying: "Better a bed in Shanghai than a room in Pudong." But he and his family needed a room and moved to what was then a new six-storey block of flats in Pudong.
From the windows of the flat, the view on both sides was mostly of open fields.
Now, when you look out those windows, you see Chicago or Dallas, with bits of Tokyo or Singapore. Pudong became not just a place but a crucial symbol of the new China. The east bank of the Huangpu, with its fine early 20th-century commercial temples of the Custom House, Hong Kong and Shanghai Bank, Russo-Asiatic Bank and Peace Hotel, had long been a reminder of the wealth and confidence of colonial Shanghai and a rebuke to the relative poverty and dinginess of the city in Maoist times. With the opening up of the Chinese economy in the 1980s came the idea of outfacing the Bund with a new, self-consciously futuristic business quarter on the east bank of the river.
Spectacular towers such as the 1,500ft-high Oriental Pearl TV Tower and the 1,400ft-high Jinmao Dasha now crown a growing forest of more ordinary corporate skyscrapers.
Zhao Ting Ying's world has been literally transformed, and the six-storey apartment block that once seemed to loom over the surrounding fields is now itself an insignificant dwarf among arrogant titans. Something similar has happened to Zhao's place in the Chinese economy. For all the suffering it inflicted on him in the years of the Cultural Revolution, the old system nevertheless offered him a sense of economic security. His "work unit" (the Shanghai Railway Bureau) offered him a job for life, health care, help with his son's education and a guaranteed pension when he retired. The system, known as the Iron Rice Bowl, covered almost all of China's urban workforce, with almost everyone employed by a state-owned enterprise (SOE).
In the era of economic reform and the creation of a market economy, however, huge numbers of SOEs have been wiped out. Because of privatisations, bankruptcies and mergers, their number has halved in the last decade, from 300,000 to 150,000. At the same time, the number of jobs in the SOE sector has been cut by 40 per cent - a loss of around 45 million jobs. The process is far from complete. As a whole, the SOE sector (including companies owned by regional and municipal governments) made profits of around €75 billion in 2003, and centrally-owned companies earned €29 billion profit in the first half of last year. But this positive picture hides a less pleasant reality. Almost all the small and medium-sized SOEs are unprofitable and debt-ridden, and the World Bank reckons that as many as 125,000 of the remaining 150,000 will have to be "let go" in the next few years, taking millions of jobs with them. What was once a strange new linguistic coinage, xiagang ("stepping down from one's post" or, less euphemistically, losing one's job), has now become a mundane part of the Chinese lexicon.
AS A RAILWAY worker, Zhao Ting Ying was protected from the first wave of SOE redundancies in the 1990s, when almost all of Shanghai's state-run textile factories closed because of competition from sweatshops in the free-market Special Economic Zones, and a quarter of the city's industrial workforce was laid off. But the city's shift from industry to banking, fashion, media and property speculation gradually cut the demand for rail freight. Last year, the company announced that the freight units were no longer efficient and announced drastic job cuts. Those under 38 years old could stay. Those under 55 could choose between redundancy and a shift to working on long-haul passenger trains - a disruption in lifestyle that many could not contemplate. Those who were over 55, like Zhao, would go out on compulsory early retirement. A unit that had 300 workers now has 50.
In some respects, Zhao is relatively lucky. His flat is not linked to his job. His health insurance is still covered by the company's scheme, and he will still qualify for a pension at 65. His monthly salary of €80 has dropped to €50, but his wife makes up sample garments in a small workshop she has established in the front bedroom, and makes around €100 a month. Though almost his entire salary goes on rent, utilities and the fishing licences that cost him €10 a month, her earnings give them enough to get by.
For tens of millions of laid-off workers, xiagang has been a much harsher process. Many SOEs have gone bankrupt, taking their workers' pensions and health insurance with them. The state, meanwhile, is caught in a period of change, taking over the social obligations and burdens that were once borne by the SOEs, but not yet able to establish a universal welfare system or the tax structure that would support it. Unemployment may stand at a relatively low 4.6 per cent, but with a vast number of under-employed rural people moving to the cities to look for work, the challenge of creating enough jobs remains fierce. In February, the national planning agency warned that China was likely to create less than half the 25 million jobs needed in the short term for new job-seekers and laid-off workers.
IT IS ALSO true, however, that some workers have made the transition from state-guaranteed employment to an open labour market with relative ease. For those with skills that can be transferred from company to company, the steady growth of the new economy has made the loss of the old stability far from catastrophic.
Jian Chongde is 55 and lives with his wife, daughter and brother in two rooms of a fine turn-of-the-century European house in the old French concession area of Shanghai. There is no sittingroom, but we sit in a bedroom whose beautiful mahogany wardrobes and table are a reminder of a dead world of colonial privilege. As Jian's wife, Ding Sheng Hua, proudly points out, her husband's family once owned this whole house. They lived in part of it and rented the rest to White Russian refugees from the Bolshevik Revolution. Jian's grandfather was in the aviation business, and his grandmother was a pioneering female doctor in Shanghai who established a successful clinic. His grandfather also owned the Central Hotel in Nanjing, the city that served as capital to the Nationalist government of Chiang Kai-shek.
After what Jian carefully refers to as "the liberation" (the Communist victory in the civil war), the grandparents fled to Hong Kong and eventually died there. The fine house in the French quarter was taken over by the state, and the family was allocated two rooms.
With such a background it is not surprising that Jian Changde, too, was sent to the countryside for re-education during the Cultural Revolution, in his case for eight years in the Manchurian province of Jilin. When he returned to Shanghai, he worked as a builder, then got a job in an electrical equipment factory, where he acquired a rudimentary knowledge of electrical mechanics. From there, he went to work as a maintenance man in hotels, including one run by the youth wing of the Communist Party. But as he passed exams and improved his skills, he sought ways of getting out of the state-controlled economy. He went to work in the then Portuguese-run enclave of Macao for a while, then tried and failed to get into Hong Kong.
But on his return to Shanghai, he worked as a maintenance manager for a series of private enterprises: a Hong Kong-owned fast food business, a Taiwan-owned conglomerate, and now a French company that runs restaurants, coffee bars and night clubs in the city.
THE RESTLESSNESS SEEMS in part a deliberate defiance of the old culture of secure and predictable employment, fuelled by a lingering memory that his family did very well in the old, freewheeling pre-revolutionary Shanghai.
Yet, though he earns around €300 a month, a decent salary by Chinese standards, his family still lives in two rooms and the new economy certainly hasn't made them rich. His daughter Jiang Yiy told me that her education has been expensive and that even though she has graduated with an engineering degree from university and speaks good English, it is hard to get a good job of the kind she would like, working for a high-tech joint venture company.
When she sends out her CV, she says, she usually gets no reply.
Strikingly, both Zhao Ting Ying, the laid-off state-company employee and Jian Chongde, who works in the foreign-owned private sector, give me the same answer when I ask whether life is better for their children than it had been for them. Given that both had been victims of the Cultural Revolution, I expect an obvious and emphatic answer. Zhao's son is a computer service engineer and earns twice what his father did when he was working for the railway company. Jian's daughter is well-educated, smart and confident and, even if it takes some time, seems likely to get a better job than her father has. But both men say life is obviously better in some ways, but also more uncertain, less secure and more capricious. "Older people," says Zhao, "may not have had as much, but they were confident of what they had and didn't worry so much because there was not very much difference between doing well and doing badly. Younger people, if they lose their job, will experience a really sharp drop in their income and they'll really feel the loss."
In a world where the memory of upheaval is still too raw for complacency to be possible, having something to lose is still a mixed blessing.