Chapter Three

The Unit's Proletarian

When people answer the telephone on business in China, the first question they ask the caller is not `Who are you?', but rather `Where are you from?' (Ni nar de?). They are not asking about a spot on the map, but to know the caller's danwei, or Unit, and it says a lot about the cellular structure of modern China. The Unit means everything to a Chinese worker, and controls almost all aspects of his life - not just his daily work and conditions, but political life, his housing, his ration coupons, his permit to travel, to marry, or to have a baby. A well-run, wealthy Unit can be a cosy and comfortable cocoon, giving its workers life-long security with a minimum of responsibilities. Poor or badly-run Units are a constant scourge on the lives of their workers, and the workers have no means of escape.

Few visitors to China ever realise how relatively limited the fully-socialised industrial and welfare system actually has been. State-owned, state-funded industries have never accounted for more than about ten percent of the Chinese work-force, though they represented more than thirty percent of capital investment. These include all public administration and utilities, the armed forces (including a whole military construction and production system of its own), the railways (also with numerous ancillary arms), major heavy industries, higher technology, and the state distribution structures which, in themselves, almost outnumber in manpower those involved in actually making the goods. Under the system set up in the fifties, workers in state industries were paid by direct grant from the central treasury, on fixed scales and grades, irrespective of the particular role or performance of their Unit. Factories could be, and were, closed down for years at a time, or could simply cease to produce through mismanagement, and the workers' salaries flowed on regardless. Unit leaders would apply for additional direct state budget grants for any staff facilities, such as unit housing blocks, which came under the broad umbrella of unit responsibilities. The most powerful units, such as Capital Steel, might become almost states within states, with their own public transport, cinemas and theatres, schools, hospitals, sports grounds and public bath houses, for staff, all enclosed within a vast walled compound.

On the other hand, all revenue from those industries also went directly back up the bureaucratic line to the state treasury. Such industries would be given official production targets in the annual national economic plans. But, for most of the time, whether or not they met these, exceeded them, or ignored them altogether, would affect nothing but the number of congratulatory certificates hanging in the political study rooms. Production targets, anyway, were often quite unrealistic. In this highly artificial economy, some such units were huge money-spinners for the government, while others, the majority, were a huge drain on the national wealth, when the time came for true assessments to be made. Labour lay-offs were unheard of in state industries, where the full principles of socialism were supposed to be in operation.

The second level of industry was described as `collective', and consisted mainly of those small and medium-scale industries which had been privately founded before the communist system was set up, and had later been forced into amalgamation under Party-appointed management. In theory, they were jointly and commonly owned by their workers, though this meant little in practice. Generally, they had a much lower level of capital investment in proportion to the number of workers, and were expected to generate their own funds for workers' salaries and amenities. Salaries were paid, of course, according to the same strict gradings and guarantees as for state workers - except that collective industries could run out of money. In deference to national policy, however, funds for a broke collective's workers' wages would then be found from the state bureaux further up the line which supervised them. Collectives were common in retail, light industry and service trades, but there were also some major manufacturing operations around the country still with the status of `collectives'.

Another feature of these collective industries was that they often included in their senior staff some of the original owners and managers of the private industries from which, on the whole, they had sprung. They tended to be more flexible and adventurous in their approach to management, given a chance, and thus more cost-effective. During the Maoist period, collectives were regarded with official disdain as semi-capitalist left-overs from the Old Society, which would eventually graduate into fully state-owned organs of New China's economy. The greatest disadvantage of the collectives was that they were able to offer far less in the way of housing or other welfare benefits to their workers. Collective workers often depended on the municipal governments, rather than their units, for such things.

The aim of the Maoists, pursued again with some heat during the final fling of the Gang of Four, was to eliminate private trade and industry altogether. Their principle was not just that state industry should be inherently more efficient, but that any vestige of capitalism was bound to have a corrupting effect on the socialist morality of any who came in contact with it. A few small scale peddlers and the odd shoe or bicycle repair man were all that remained at the height of their powers, as they even tried to ban the free produce markets which meant so much to the peasants.

It was thus the interest of every Chinese worker to get himself on the rolls of one of the bigger, state-owned industries, where he would be set for life before the proverbial `Iron Ricebowl' - unbreakable. Manpower policy, set at the top Party levels, was that China's massive workforce should be fully employed, men and women. If that meant five men doing the work that could be done by three, and five men sharing the rice that could be eaten by three, then that was Chinese socialism. Personnel bureaux in each locality would assign workers to plants year after year, whether there was any requirement for them or not. The point was, the workers had to belong to somebody. At the Capital Steelworks, on the outskirts of Beijing, the workforce climbed from 24,000 in 1966 to over 65,000 in 1976 - while productivity actually declined thirty five percent. Workforces all around China ballooned, and incentives to hard work or innovation declined, with the exception of those self-motivated individuals who threw themselves into Production Emulation Campaigns, perhaps seeking selection as Model Workers out of pure idealism, or as the first step in a political career.

Control of the cadres over the distribution of their unit's resources is of course crucial to the morale of the workers. Abuse of position provokes great resentment, and is never forgotten. A young man working in a central government unit told me how there were many young people in his department waiting to get married, but unable to do so because the unit did not have any housing to make available to them. At the same time, everybody in the unit knew that the unit Party Secretary was occupying three good apartments in one building. One he lived in, one for his son, away in the army, and a third for his daughter, who was away attending university. There was an incident when some children in the unit compound made mischief with some belongings of the Secretary left in the courtyard, and the man wrote a pious notice to all residents, blaming parents for not ensuring `socialist morality' in their children. Many people passing this poster spat upon it, said my friend.

When I arrived in Beijing, the customary greeting between workers was the traditional Chi fan le meiyu? (Have you eaten ?), while the farewell was likely to be Man man zou! - `Walk slowly!', or, more freely, `Take it easy!'. In the stillness of the two-hour midday siesta, the xiuxi enshrined in its own article of the Constitution, or in factories with sheds full of silent machinery while workers attended all-day political study sessions, it was hard to connect the realities of China's industry with the bold calls to catch up with the advanced industrial nations within twenty years. The only visible haste was in the scurrying crowds who rushed to form long queues at the state commercial stalls when a consignment of fruit, vegetables, or bean curd was rumoured likely to arrive. Things were to change greatly.

Old Kong had lived in Beijing since his childhood, and had seen it all.- seen the Nationalists holding an uncertain sway over the provincial war-lords, when the national capital was down south in Nanking, and Beijing, the ancient Imperial capital, was a backwater. He had lived under the Japanese occupation. He had been a teenager when the Nationalists returned, backed by American marines, and the old city was seething with underground revolutionary slogans. He had watched Chairman Mao's victorious army parade into Beijing, the Chairman himself standing a captured American jeep. He had seen the long, steady purging of the old city - its prostitutes and opium dealers disappearing, its effete Manchu aristocracy imprisoned for re-education, or already fled to Taiwan, its businessmen squeezed and squeezed, year by year, until compulsory acquisition of their property by the government was almost a relief.

He had seen its anti-Communist foreigners expelled, and thousands of Russians arrive via the trans-Siberian railroad to construct Soviet-style public buildings for the new Peoples Republic and a permanent colony for themselves, the Friendship Guest House with its own clubs and bars, on the northern fringe of the city. He had seen the Russian `Elder Brothers' retreating under a hail of abuse from their former apprentices, and had seen that generation of Chinese cadres, in their own turn, dragged down and spat upon by their children in the Cultural Revolution. Now Chairman Mao was dead and his wife was in prison. As the Ming emperor had said, wives and concubines should refrain from meddling in politics. And so should the proletariat, in Old Kong's view, as long as things were tolerable. A poor man might have his own private principles, but `the bamboo withstands a tempest by bending with the wind'.

Old Kong's parents had been beggars. In the devastation of civil wars and floods brought on by the neglect of the Yellow River dykes, they had both left their home villages as little more than children, begging their separate ways northwards. They had met on the road, and at the age of fourteen his mother had attached herself to his father, three years older. Formal marriage was then a luxury beyond reach of the poor. Kong's oldest brother was born before she was sixteen, and she bore ten children altogether, before she died of cervical cancer at the age of less than thirty.

Kong's father was a shrewd young man, and his long experience of gnawing hunger leant weight to an observation he made on his wanderings: that, wherever he went, he seldom saw a thin cook. By the time he and his wife and three children, including the infant who was to become Old Kong, made their way to Beijing, he had developed a special skill at making jiaozi, flavoursome envelopes of meat in a skin of dough like large ravioli, much loved by the people of North China. At first he worked in Beijing as a street vendor, with his wife steaming the dumplings over a coal brazier in the courtyard near the Flower Market where they rented two small dirt-floored rooms. It was a smart walk from there, with the covered rattan trays of spicy jiaozi trailing their enticing fragrance, to the busy entertainment quarters of Beijing, where there was usually a ready market for warm jiaozi with soy sauce, vinegar and chilli. Most days, father would return with enough cash to pay for the next day's ingredients, plus enough to feed the family, with not much left over. The children preferred the bad trading days, when, instead of cash, father would bring home more of the jiaozi to feed to his own family.

The young Kong had another source of regular treats. There was a small protestant mission church in a lane not far from their house, where attendance at Sunday School was rewarded with a boiled sugar sweet, wrapped in coloured paper. Kong attended for some months before his parents found out, and forbade him to give his soul to the Foreign Devils. After that he joined the other group of urchins, who would hang about outside the little church singing insulting ditties about those inside.

`I didn't know what the foreigners were talking about', he protested to me in hindsight, `but I did learn some of the songs, with one of the Yellow Hairs playing a harmonium'. Sometimes he and his playmates would run down to the Legation Quarter, against the great inner city wall by the Chong Wen gate-tower, to stare at the foreigners from the consulates there and in nearby western-style restaurants.

Kong's elder brother died of pneumonia one winter - the cost of medicine, beyond a tonic from the local herbalist, was out of the question. Several times babies were born, and died either within a few days or before they could learn to talk. He remembered his mother's sorrow becoming more silent with each death, but most of all he remembered the terrible month of his mother's own last illness, his father's round, usually red face white with what looked like fear, and the children's stomachs hungry as the family income went to buy opium as the only relief to their mother's pain. Only four of her children survived her.

After the mother's death, the father gave up his peddling and took a job as a jiaozi cook in a popular restaurant on Qian Men street. The pay was low, but he was able to live amply himself on the restaurant kitchen, and smuggle some scraps of meat home for the children as well. As had been his ambition, he began to put on weight. The two older girls found work - one as a domestic servant, and one in a sewing factory - but Kong, as the oldest son, was destined for higher things. Head shaved but for a small pigtail at the back, he was packed off to a local school, run privately by a poor descendant of a scholarly family.

After only two years, the cost of living rose, and Kong's father could no longer afford the fees. But, on the strength of his bare literacy and basic arithmetic, his father found him an apprenticeship in a machine shop. The terms were no pay for the first year, and little thereafter, but he learned to use tools and to operate a lathe, rare skills and a certain meal-ticket in his generation in Beijing.

In the middle fifties, Kong watched the way things were going, and decided that the Army was the best foundation for any future career. He enlisted, and spent several years the machine shops of a military transport unit in various parts of North China. There were occasional counter-revolutionary rebellions in remote parts of the country, and, between times, PLA participation in road and railway construction. Towards the end of his enlistment, he spent some exciting months of 1959 in a forward transport base on the Qinghai plateau, bordering on Tibet, keeping rolling the convoys carrying troops, supplies, and road-builders forward into Tibet, to crush the Dalai Lama's rebellion and end Tibet's age-old isolation for ever. Kong is a man who takes people on their merits, and says he gained a respect, even friendship, for Tibetans he got to know personally in the pacified area where he worked.

Kong had married a friend's sister some years earlier. In the spirit, then encouraged by Chairman Mao himself, that more people would make a stronger China, they produced four children. By 1980 when I met him, Kong and his wife were preoccupied with the problems of their children, by then almost all grown up and facing the crucial, lifetime career junctions that would be irreversible. Two, both girls, had been sent out to the rural villages, to places where they were not wanted, and spent most of the year in fact skulking about Beijing hoping to find a means to return. In that year, the rustication programme was officially scrapped and their rural penance was ended, but there were few jobs to be found in Beijing.

China's net labour force increases by an average of two million per year, and in 1979-80 there was an extraordinary extra burden of almost twenty million such rusticated youths returning from exile to their home towns and cities. In 1979, in Shanghai, there were a number of serious civil disturbances by groups of youth demanding release from rustication.

Since the fall of the Gang of Four, Shanghai, once the home and power-base of their Maoist extremism, has shown its traditional speed in adjusting to a new political wind. Shop window displays were considered bourgeois by the Gang of Four, but in Shanghai now the shutters have come off after five years, and Shanghai will sell to anyone who brings money. The Shanghainese know that their teeming city of fourteen million rewards enterprise more than any other place in China. Millions of Shanghai's children have been sent to the western borders of China - to Xinjiang in the north and Yunnan in the south. Many have lived years of misery there, unwanted and useless. Scenting that their hometown's natural bloodstream, commerce, is returning to life, they want to come home.

The word `unemployment' was not used in official descriptions, which used the term dai ye - `awaiting assignment'. There were six hundred thousand such dai ye youth in Beijing to compete with Old Kong's daughters. It was a vast problem on a national scale, as economic planners had been directed to look for ways to make industries more cost-effective, including shedding unnecessary staff, while there was little prospect of alternative employment.

It had been a policy plank of the original planners of the Peoples Republic that everyone should work. Workers wages were pegged low on the principle that families would not depend on a single wage-earner. Wives, who traditionally in China worked only in dire necessity, must be made to join the workforce for their own good. It was a Marxist principle that `participation in labour' helped to develop socialist spirit. It also ensured that most people were under supervision of some kind most of the time. The proportion of the urban population in full-time employment rose from only twenty percent in 1949 to between fifty and seventy percent, varying by city, in 1982.

By that year, many of China's economists were beginning to question whether that employment policy was sensible after all. Its result, after a generation, was that tens of millions of young parents incurred great expense to themselves and to the state, arranging day care for their children while both parents went to work. On the other hand, millions of young school-leavers were jobless. One economist wrote:

The proposal was for a national system of five to ten years' extended maternity leave on reduced pay, which, the economist calculated, would liberate some two hundred million positions for employing young people over the next twenty years. For women in the lower grades of pay (as most young mothers are), the costs of child-care can be almost as much as the monthly wage, even in state-subsidised nurseries, which are available only to about one quarter of urban workers. Only those mothers with elderly relatives who can give child-care free of charge really gain much in living standards from their full-time work commitment. With a six-day week and long commuting times for many, housework becomes a real problem. Few have home refrigerators, so shopping for food must be done daily, and that can mean hours standing in queues. The problem, even for those who gained nothing from the work, has been that a job assignment is for life - and most would fear that if they resigned their position they would never get another one when the child-rearing phase ended. Family life on a single income is penury. As a result, many children, in fact, received inadequate care of any kind.

Other substantial revisions were being made to the whole economic system at this time, which began to alter the character of employment conditions. There was a national campaign to `Smash the Iron Ricebowl', which had been held responsible for gross inefficiency throughout industry and commerce. State-owned units were to be empowered to retrench or sack excess workers. And there was a sustained campaign to boost the prestige, and to encourage the expansion, of collective and private commerce and industry as alternative avenues for employment.

The policy made nothing but sense, as China was so obviously saddled with gaping inadequacies in such labour-intensive fields as small-scale commerce and service trades, while suffering monstrous over-staffing in a few state industries, and swelling unemployment elsewhere. Most of this had been perpetuated by certain items of Maoist dogma regarding the nature of `exploitation' of one man's labour by another. Pedicabs, for instance had been banned from Beijing as `humiliating', though they represented a highly efficient solution to public transport problems in Beijing's tortuous network of residential lanes and courtyards. Hiring home help was also considered exploitation, though it persisted blatantly in the homes of the powerful who were assigned servants by their units. As the labour policy reforms now progressed, these individual service trades were now redefined as `division of labour' among the proletariat, rather than `exploitation' of one class by another. For the books, this was achieved by saying that exploitation was no longer an issue because the former exploiting class, the bourgeoisie, had ceased to exist in China.

The low-wage system was also intended to keep the proportion of discretionary spending to a minimum, while a budget of ever-growing subsidies in kind, such as low public housing rentals and pegged prices on rationed items, helped to make the low cash income bearable. In 1981, the state subsidies bill for urban workers, covering food, clothing, medicine, housing, and recreation facilities, came to twenty-five billion yuan - equal to nearly twenty percent of total state revenue.

But the wage system also broke the relationship between work done and reward received. In my bureau in Beijing, the three local staff - a college-educated translator, a driver-messenger, and a housekeeper - each received almost the same monthly wage of around ninety yuan (forty dollars). It happened that seniority, in years of service, in each case evened out the substantial differences in their qualifications and basic gradings. And those differences were more than adequately recognised in the contract fees which the Australian Broadcasting Corporation was obliged to pay to the Diplomatic Service Bureau, which actually employed and supplied the staff. For the translator, we paid over seven hundred yuan per month, for the driver, over three hundred, and for the housekeeper, about two hundred yuan per month.

Deng Xiaoping's reforms brought significant change in wages policy, too. The Maoist slogan had been `From each according to his ability, to each according to his need.' For the new period of economic construction, said Deng Xiaoping, the basis of remuneration would be revised. The principle, now, would be `From each according to his ability, to each according to his work'. This directive opened the way to restoration of piece-work incentives in factories, to rewards for innovations or personal skills, and, finally, to a restoration of the principle that anyone had the right to work to make himself rich, so long as he did so within the laws and regulations laid down, and so long as what he produced was beneficial to society. In this revolutionary new context, new collective and private enterprises were to be given every encouragement, and they did indeed begin to flourish, over the complaints and resistance of that privileged few who had benefited most from the old inequities of the ossified state-owned economy. Step by step, regulations were amended to allow a reviving private sector of the economy to employ staff and to accumulate its own capital. Debate raged in the correspondence columns of the press: `Should individuals be allowed to become rich in a socialist society?'. The official answer was a clear `Yes!', and a body-blow to the Maoist ideologues still intent on forcing the creation of a Socialist Man, defying human nature.

It is convenient in some ways for Chinese families if both husband and wife work for the same unit. In the military, for instance, it is almost universal, and one might see families on a Sunday outing in the park, mother, father, and two or three children all in military uniform. But most couples do work in different units, so even for families living in cheap, unit-supplied housing, it is likely that at least one partner will be living quite some distance from work. On the other hand, some people naturally would prefer the privacy of not living cheek by jowl with those in the work unit, with whom they have to spend all their working hours, anyway. But house-hunting in the capitalist way is out of the question. Private housing accounts for only about five percent of housing in Beijing, and only the wealthy can afford it. Rental housing is available only through work units or through the Municipal Housing authorities.

It used to be common to see small slips of paper pasted up on lamp-posts by bus-stops on commuter routes, asking if anyone with a three-room apartment in such-and-such a location would like to exchange for one larger, smaller, or on the other side of town. If exchange partners were agreeable, the units concerned would usually agree, subject to security requirements. In 1982, annual House-swapping Fairs were inaugurated. At the first, twelve thousand applicants for housing exchange swamped the nine hundred desks set up in an exhibition hall, and several thousand of these found their solution to years of frustration. Simple facilities like those make an enormous difference to the morale of a workforce which has been, for too long, made to feel totally powerless.

Chinese industrial workers are now accustomed to paying the very low, subsidised rentals for unit housing - as low as three or four yuan per month for a three-room apartment - but the penny is beginning to drop that such low returns on investment to the building owners, socialist though they be, discourages further construction, or even maintenance. Workers in one Beijing unit wrote to the press complaining that their leaders gain a merit award in a Civic Virtues campaign by lavishing funds on redecoration of their offices and reception rooms, while there was still no proper washing facility in the dormitory for a thousand workers. There is a slow movement towards privatisation of housing, with a proportion of apartments in Beijing being built for purchase by individuals on time payment or with bank mortgage loans. The wheel has turned yet further.

In Imperial Beijing, no-one was allowed to build high enough to look over the walls of the Forbidden City, but since 1981 there has been a rush into highrise apartment building, in towers of up to twenty stories. The visual character of the city had been irrevocably altered, as a hastily-constructed rampart of these nondescript and inconvenient tower blocks rose rapidly along what had been the site of Beijing's grand city walls, themselves short-sightedly demolished in the early sixties. By 1983, alarms were being raised by those few Beijing architects who care about the future of what is left of the ancient city. Many of the grand vistas can never be restored, and Beijing residents are beginning to discover for themselves the lessons learned in the past twenty years by western builders of highrise housing estates. Nothing could be more alien to the traditional lifestyle of Beijing.

Beijing is envied by other cities for its plentiful parks - most of them former Imperial gardens and reserves. Some of them surround former temples and altars with ceremonial functions in the rites of the imperial calendar, others were simply pleasure gardens or hunting reserves. These memorials to imperial whim, no doubt recklessly costly and resented by the local residents when they were established, are now a valuable legacy for the descendants of those ignored and excluded subjects. For a few cents, any peasant can wander through the Forbidden City, and even expectorate noisily, as I witnessed, on the floor of the highest imperial throne-room.

Old Kong's bicycle had been his largest personal investment, at about two months' wages - but he was hoping, one day, to buy a colour television set for around fourteen hundred yuan - ten months' wages for the two of them. For the time being this would be impossible, with four children still to support. But priorities in consumer spending were changing rapidly with the development of the economy. The former list of popular targets - wristwatch, radio, bicycle, sewing-machine - became out of date in Beijing during my years there, as the market became saturated, even with bicycles which had been previously so much in demand.

China produces over sixteen million bicycles per year, and in Beijing during 1982 sales reached forty thousand bicycles per month. Beijing's narrow lanes suit bicycles better than any other transport, and bus lines can never satisfy the needs for door-to-door personal transport. Light mopeds are an obvious next phase, and for a while in 1981 were a furiously growing market, until city authorities clamped down on the sale of many brands which were shoddy and dangerous to both rider and public. Policy decisions also made it difficult for moped owners to buy petrol, which is generally in short supply in China. Until this problem is solved, China's hundreds of millions of bicycles will continue to carry everything from infants to forty foot poles lashed vertically to fat pigs on the way to market. I hope I shall never see again one particular bicycle cargo I witnessed in a crowded south china city. A youth was weaving through crowded traffic with a large pane of unwrapped window-glass lashed across his back with flimsy hemp twine, exposed corners extending two feet either side of him, and the top edge of the naked pane already sawing at the neck of his shirt as he rode.

By 1983, most Beijing families had a black and white television set, and colour sets, Japanese models assembled in Beijing, were selling fast. Cassette players and electric fans were common. For most families, the targets ahead, but well within reach, were a basic-model washing machine and a refrigerator. Reservations were not as to whether the price could be afforded, in time, but whether the locally-made goods would stand the test of time, and whether the subsequent electricity bills would be too high. Remembering that China is, by government design, a low-cash society, such decisions in discretionary spending take on even greater proportional weight. A few yuan here or there can unbalance a month's budget irretrievably. Per capita incomes had risen since 1978 by over fifty percent, to an average of about five hundred yuan (then $250) per capita in workers' families across China. The growth came from regular `productivity bonuses' to most workers and an increase in the number of income-earners per family, as the development of collective and private enterprises began to employ tens of thousands of dai ye youth. Prices had also risen, though, especially for food, as a direct result of policy decisions to increase incomes for the peasants who produced it.

In doing this, the Party recognised that since the early fifties pricing policies on a national scale had been squeezing the peasants to support the city - hardly the fulfilment of what had been promised in the days of guerrilla revolution. The government set its official purchasing prices for rural commodities unreasonably low, and it set its sale prices for manufactured goods unreasonably high, leaving the peasants in an impossible position to improve their lot. The arbitrary pricing also gave a completely false impression of the cost-effectiveness of urban industry. With the soviet-modelled ambition to develop heavy and manufacturing industries taking precedence, the Peoples Republic had for decades been squeezing eighty percent of its people, the peasants, to featherbed fifteen percent, the industrial workers. That so much of what had been squeezed from the peasants is now fully admitted to have been frittered away in bad management and ideological follies is just the beginnings of cold comfort for those peasants, only now seeing a real chance that they can make substantial improvement to their own living conditions.