36 CultureShock! China
businesspeople may go through entire China assignments
never meeting and hardly ever thinking about any of them.
But it is worth remembering that villagers are still the
majority in China, and that their ongoing struggles with
poverty are a major and growing source of unrest. China’s
current leadership, heirs afterall to a revolution that started
among the peasants, is acutely aware of, and worried by,
that fact.Marooned State Workers and the Xiagang
Similarly, while the headlines have tended to go to the
deservedly praised economic miracles of Shanghai and
Guangzhou, in poorer parts of China, over 250 million
Chinese still live in the twilight limbo of the faltering state-
owned sector.
Here we do not include workers at the relatively
few state-owned enterprises (SOEs) or state-invested
enterprises (SIEs) which have successfully transitioned into
competitive modern enterprises, the Lenovos and China
Telecoms which have carried out global IPOs and are poised
for growth into China-based MNCs. Rather, we are talking
about hulking, faltering SOE steel, power and weapons
plants, and banks still propped up by government subsidies
because they are seen as too important to national security
to allow to be controlled by foreigners, and/or as ‘too big
to fail’.
These SOEs are notoriously inefficient; a 2005 US
Congressional study estimated that SOEs still accounted
for some 62 per cent of China’s urban employment
nationwide, but less than 48 per cent of her urban GDP. In
fact, many workers at these plants have been cut back to
half or even quarter time, kept on only nominally to provide
some semblance of stability and avoid contributing to the
unemployment statistics.
There are also tens of millions of xiagang, the laid-off SOE
workers officially ‘awaiting reassignment’, though everyone
knows the reassignment will almost certainly never come.
Such workers, who may or may not still receive health
coverage or other benefits from their former employers,