Part 1 and Part 2 of this series examined how internal party political conflict, rampant corruption, poverty and social unrest is transforming Chinese society. President Hu Jintao is consolidating political power, and pursuing economic policies that, if successfully implemented, will constitute a repudiation of the neoliberal model that has held sway since 1978.

There were more revelations this week indicating that Hu's interrelated efforts to investigate and prosecute corrupt party officials, closely aligned with major business interests, and empower labor unions is a serious one.

First, in regard to the government sponsored unionization effort:

China's top trade union has called on all foreign companies operating in China to establish union branches. The All-China Federation of Trade Unions (ACFTU) urged foreign companies to follow the example of Wal-Mart, which has initiated a process of setting up unions in all its stores throughout the country. . . .

Notably, Xu slammed multinationals such as Foxconn, Kodak and Dell for their long refusal to allow the establishment of trade unions, and called on unionists at all levels to make the establishment of branches at those companies' bases in China "breakthrough goals".

Xu said resistance from foreign companies sprung from their lack of understanding of the status and function of Chinese trade unions, which they consider opponents.

"A trade union should unite and organize employees, boosting the development of a company, guarding employees' rights and maintaining harmony in the workplace," said Xu . . . .

Sixty percent of the more than 150,000 foreign companies in the country are expected to have their own trade unions by the end of this year, Xu predicted.

Meanwhile, China's trade unions expect to recruit 8 million rural migrant workers in each of the next three years, an official with ACFTU said.

"Hundreds of millions of migrant workers have become an important part of the Chinese workforce and they are helping drive economic and social development, so it's imperative to safeguard their rights," said Sun Chunlan, vice chairman of the ACFTU, at Sunday's national conference on protecting migrant workers' rights.

Clearly, one should not exaggerate, and characterize these developments as the creation of adversarial, French-style labor unions. But it is indicative that social conditions have degenerated to such a degree that there is an urgency to collectivizing workers, even migrant ones, into organizations that will curtail the most extreme abuses. No doubt, there is also a more sinister social control purpose to such a collectivization, but it is hard to see how it can succeed, especially given the loss of the ability to restrict the movement of the populace, unless these organizations produce a recognizable improvement in their lives.

Second, the anti-corruption drive has brought down another high level party official:

Releasing economic statistics for the first three quarters of this year, China on Thursday confirmed that the recently sacked director of the National Bureau of Statistics (NBS), Qiu Xiaohua, was under investigation for his suspected involvement in a scandal in Shanghai involving the embezzlement of social security funds worth billions of dollars.

Qiu thus becomes the first minister-level official in the central government netted in Beijing's investigation into the Shanghai affair, which now appears to be snowballing. . . .

"In their investigation of the case of embezzling of Shanghai's social security funds, relevant authorities found that Qiu Xiaohua has seriously violated [the party and government's] disciplines. He is now under investigation by the [Communist Party's] central commission for disciplinary inspection," said Li Xiaochao, spokesman for NBS, at a press conference to release economic statistics in Beijing on Thursday.

Last Friday, the State Council, China's cabinet, suddenly announced the removal of Qiu as NBS director without offering any explanation. Qiu, 48, was only promoted to the post seven months ago. At the same time, the State Council appointed Xie Fuzhan, 52, as the new NBS director, replacing Qiu immediately.

Power that flowed one direction has changed course, and is now flowing in a much different one. As in countries like Indonesia and Russia, neoliberalism created an interconnected social elite, one that seized control of businesses, property, resources, and, yes, even people, exploiting them to personal advantage without any accountability and social responsibility, destroying public confidence in the party and the state as they did so.

The anti-corruption drive is cutting the cords of covert influence that enabled this system to flourish, and intimidating anyone who might raise a voice to object. For now, the sensibility is reformist, but the nature of the conflict, and public expectations, could transform the endeavor into a more radical one, with the potential of revolutionary transformation.

Labels: China, Neoliberalism, Unions