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Internal migrants are beginning to protest ill treatment. In Nanxuan in Guangdong province, there were three days of rioting in July 2002 when police beat up some of the 15,000 migrants employed in a wool textile factory who were waiting in a meal line. The migrants, among the 30 million in the Pearl River delta, earned an average of $2 a day, and complained of arbitrary treatment at the hands of their employers and local police.

Shenzhen in the Pearl River delta had 20,000 residents in 1970- 83 percent of Pearl River delta residents are classified as temporary residents. Temporary residents can get residence cards for 300 yuan a year.

The Washington Post on June 28, 2002 reported that migrants employed by the state-owned Shenzhen Jianye Construction Company filed suit when they discovered that the eight percent deducted from their wages was really a "management fee" allegedly paid to a non-existent company in their home province in Sichuan. Their official union and the company did not help the migrants, who sought arbitration of the dispute, and then sued, winning a judgement for about $2,000 each, or a year's earnings.

However, Shenzhen Jianye appealed, laid off most of the workers, and a local court dismissed the workers' claims after Shenzhen Jianye agreed to "voluntarily" pay each of the workers $600. According to legal experts, the Shenzhen Jianye case shows that migrants cannot get justice in the courts of the localities where they work, which are under the sway of local employers.

China is closing money-losing state-owned factories, and many of the workers displaced are striking and protesting when they do not get the severance payments and pensions they are entitled to. The funds set aside for such payments often turn out to be missing. The Communist Party still bases its official ideology partly on representing the interests of workers, and the clashes between workers and their old employers pose a threat to peace and stability.

In a typical case, a 2,000-employee brick and tile factory in the Chinese province of Inner Mongolia was privatized in 2001 and closed in July 2002, with the $1 million pension fund missing. Protesting workers occupied the factory and clashed with police after the government said that, as a private company, the dispute was between the workers and their new management.

Shanghai has 50,000 long-term foreign residents, and a summer 2002 sweep found 525 foreigners illegally in the city. Shanghai has started to issue a special type of residency permit to foreigners who are considered to be valuable to economic development--265 foreigners and overseas Chinese received the permits, which allow five years' residence.

North Koreans. On March 14, 2002, some 25 North Korean asylum seekers ran through the gate of the Spanish Embassy in Beijing, focusing attention on the plight of North Koreans in China and prompting a Chinese crackdown. Some 60 North Koreans have gained asylum by entering foreign embassies in China in 2002, but hundreds of thousands of North Koreans illegally in China have been subjected to scrutiny, detention and deportation.

China calls the North Koreans economic migrants, but has refused to allow UNHCR access to them for interviews. As a result of the crackdown, many North Koreans who were living in Chinese cities in the northeast have moved to the countryside, working in exchange for food and shelter and perhaps $25 a month; Chinese farm workers earn $50 a month. North Korea has 22 million residents; by some estimates, two million people died from starvation in the past five years.

North Korea announced economic reforms in July 2002, eliminating the state-issued coupons that people needed to purchase goods, freeing some prices, and increasing workers' wages. In rural areas, farmers are allowed to sell produce privately.

Economy. China's GDP reached $1 trillion in 2000, when US GDP was almost $10 trillion. In 1995 dollars, Chinese GDP per capita rose from $168 in 1980 to $727 in 1998. Russia and China grew very differently in the 1990s: Russia produced two-thirds more than China did in 1990; China produced two-thirds more than Russia did in 2000. Agriculture's share of GDP is declining, but half of Chinese workers are still employed in agriculture, 27 percent in services, and 23 percent in industry.

China is the world's largest market for televisions, refrigerators and mobile phones, and there is hope that China will eventually surpass the US as the consumption engine that drives the world economy. China's emerging middle class, households with net income of at least $3,000 a year, is 100 million and growing by 20 percent a year. Most households spend very little on housing, which is state subsidized, so they have more to spend on consumer durables.

There is tension between the 500 million urban residents and the 800 million rural residents. China's push for a market economy began in rural areas in the late 1970s, but in the 1990s, rural incomes stagnated, and 100 million rural Chinese migrated to urban areas, where their presence leads to tensions as at least 20 million urban Chinese are laid off from state-owned industries.

However, in rural areas, stagnant incomes and rising taxes have fueled peasant revolts. China's opening to a market economy began in Anhui province in the late 1970s, and an experiment there to keep taxes at less than five percent of per capita incomes, $158 a year in Anhui, is being extended to other provinces. According to the government, the average rural tax burden has fallen from $13 a year to $9 a year, illegal additional levies are no longer collected, and local officials will no longer be able to demand unpaid labor from peasants.

Local officials are complaining. Anhui, with a population of 63 million, has roughly 30,000 villages, and officials say they need at least $4,800 a year in each village to cover official payrolls and expenses. But the average village's tax revenue in 2000 was only $3,600, which has forced layoffs, especially of "temporary" officials, mostly farmers for whom friends and relatives have arranged salaried posts in local government.

For centuries, China had no local government below the county level. Instead, local gentry and clan patriarchs governed myriad villages. The Communists set up village and township governments, and gave them the ability to collect taxes in 1979 and 1985, respectively. Local government payrolls ballooned, and China now has more than 13 million officials at or below the county level; their salaries must be paid by farmers' taxes. Most experts urge an end to taxes on farmers, arguing that farming is too unprofitable to be subjected to taxation given China's scarce land per capita and inefficient production methods.

Crime. China has organized crime groups called triads, which trace their origin to the struggle against the "foreign" Manchu dynasty that seized power from the more indigenous Ming line of emperors in the 17th century. According to the government, there are one million members of triads, many of them rural-urban migrants who cannot find jobs. The triads are involved in drug trafficking, extortion, kidnapping, the stealing of cultural relics, illegal alien smuggling, gambling and prostitution.

Triad members are not necessarily viewed as criminals in China. Tao Siju, chief of China's Public Security Bureau, in 1993 said: "As for organizations like the triads in Hong Kong, as long as these people are patriotic, as long as they are concerned with Hong Kong's prosperity and stability, we should unite with them." However, it has been illegal to belong to a triad in Hong Kong since 1845. In an October 1984 speech, Deng Xiaoping, the father of China's economic reforms, pointed out that not all triads were bad.

Hong Kong. In July, about 100 mainland Chinese abode seekers and their supporters pressed for an end to deportations. They urged the government to actively negotiate with mainland Chinese authorities to open up new migration channels to facilitate the migration of abode claimants to Hong Kong. So far, 700 people have been repatriated or have voluntarily returned to mainland China, and 4,000 are in hiding after the January 2002 ruling that they cannot stay in Hong Kong.

Hong Kong admits 150 mainland Chinese a day for settlement; they have one-way permits from mainland Chinese authorities. Between 1991 and 2001, some 200,826 mainlanders were admitted to Hong Kong to join their husbands, 13,175 to join their wives and 266,381 their parents.

Hong Kong's unemployment rate hit a record 7.7 percent in June 2002, and there were new raids seeking unauthorized mainland workers- 3,700 were apprehended in the first six months of 2002.

Taiwan. The Council of Labor Affairs reported that 7,000 foreign workers had run away from their employers in 2002.


Anthony Kuhn, "Chinese Farmers See Tax Burden Lighten," Los Angeles Times, July 22, 2002. Elisabeth Rosenthal, "North Koreans in China Now Live in Fear of Dragnet," New York Times, July 18, 2002. Craig S. Smith, "China Juggles the Conflicting Pressures of a Society in Transition," New York Times, July 15, 2002. "Mainland Chinese abode seekers stage sit-in to stop deportations," Agence France Presse, July 10, 2002. Philip P. Pan, "Chinese Workers' Rights Stop at Courtroom Door," Washington Post, June 28, 2002. Lintner, Bertil. 2002. Blood Brothers: Crime, Business And Politics In Asia. Allen & Unwin.