Hong Kong and Taiwan

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Introduction: crisis and continuity

At the height of the Asian financial crisis of 1997-98 it appeared that two decades of neoliberal triumphalism was coming to an end, as a dramatic collapse in living standards, rising poverty and widespread unemployment exposed the contradictions inherent in the capitalist globalization project. In an instant the promise of prosperity gave way to a strong sense of vulnerability among the majority of working people – a vulnerability that continues to characterize the world as it is 'seen from below.' These contradictions were further exposed when the International Monetary Fund’s aggressive pursuit of neoliberal 'solutions' aggravated the crisis and brought masses of people into the streets of Bangkok and Seoul in protest. Yet in the four years since the crisis, governments in the region have pursued economic policies which have deepened both the globalization project and the sense of vulnerability among working people.

Hong Kong: widening the poverty divide

By the end of 1999, Hong Kong had achieved one of the highest rates of inequality in the world. The average income of the territory's wealthiest was 23 times more than that of the poorest. While the richest 10 per cent of the population held 36 per

cent of the (sub)national income, the share of the poorest 10 per cent was less than two per cent. But unemployment is only one factor contributing to poverty and inequality. When the unemployment rate reached its historic peak of 6.3 per cent in 1999, less than one-fifth of poor households were directly affected. [1] The majority of those living in poverty (both before and after the crisis) are in waged employment, but earn less than is necessary to maintain a reasonable standard of living.

By the end of 2000, an estimated 250,000 workers were earning less than half the average income, with the number of people in the households of the 'working poor' numbering 1.2 million, or a quarter of the territory's population. [K.L.Tang and Jacqueline T.Y. Cheung, 2001, p.49] While still locked in a crisis of increasing poverty and inequality, the working poor soon faced a new threat to their livelihood. In early 1999, the government announced a privatization programme based on the contracting-out of government services - such as the management and maintenance of public housing estates - to the private sector. Not only did this raise living costs and exclude more people from access to public services, it also affected the wages, working conditions and employment security of 190,000 public sector workers.

A struggle against the privatization and contracting-out of public services culminated in one of the largest demonstrations in two decades. On 23 March, 1999, the Alliance of Housing Department Staff Unions, the Hong Kong Confederation of Trade Unions, community-based labour and social welfare groups led a protest march of 23,000 people through the streets of Hong Kong's financial centre. But the privatization and contracting-out of government services was implemented as planned, because trade unions and community organizations failed to organize an effective, mass-based movement.

Hong Kong: beyond vulnerability

One of the reasons for this weakness was the inability – or unwillingness - to exercise collective power in the workplace and community. With few exceptions, most protests took place on weekends, when government offices were closed and services were unaffected. Added to this was the failure to forge links with community organizing among residents of public housing estates, even though they are directly affected by privatization. Another fundamental weakness in the union response was the retreat from political opposition to privatization, settling instead for demands to limit dismissals and maintain wage and pension levels.

The decline of the movement against privatization was due primarily to the limitations of the trade union movement itself. The internal dynamics of particular unions and the fragile inter-union alliance were weaknesses easily exploited by the government. Without the community-based alliances needed to promote a popular critical awareness of the impact of privatization, and – more crucially – without an alternative agenda, the movement failed to generate sustained (and sustainable) popular support. As with so many protest movements in the territory, government policy was contested within a discourse on economic rationality and the market, to which labour and community organizations merely offered a moral dimension.

Aside from those limitations specific to the trade union movement in Hong Kong, the opposition to privatization shared several similarities with other social movements in the territory. The most significant of these was the emphasis on symbolic rather than transformative collective action: these protests are primarily designed to attract media attention to an issue. Since this is essentially a symbolic act, the degree of popular power exercised and even the number of people involved is attributed little importance.

The politics of vulnerability is a powerful determinant in shaping and limiting social movements. Motivated by a concern for those most victimized or marginalized in society, many social activists and community organizers (particularly those associated with church organizations) have concentrated their efforts on seeking justice for the vulnerable minority. Generally, this vulnerability is not seen as systemic, tied to the logic of capitalism, but as the result of State failure. As it is, social movements tend to articulate demands focussed on assistance for the vulnerable, rather than the regulation of capital and markets, and the redistribution of wealth.

There remains a powerful sense of vulnerability among the majority of working people. While not directly faced with poverty, unemployment, or homelessness, this majority senses that they could easily become so. Knowing that their limited savings will not sustain them, or that their debts may bury them, people are keenly aware of the possibility. One of the effects of globalization has been to increase this sense of vulnerability in such a way that capitalists are able to use it to impose greater discipline and control on working people. As such, it has a powerful de-mobilizing effect.

Unfortunately many activists have misread this sense of vulnerability, treating it as apathy, lack of motivation or interest in seeking social change. This apparent apathy then justifies the symbolic nature of collective action, which is taken on behalf of 'the people.' In contrast, what is needed is the kind of critical popular education and self-organizing that reveals the collective power of working people. A sense of collective power is the only means of overcoming the pervasive sense of vulnerability. As long as social movements neglect or misunderstand this sense of vulnerability it will continue to be an effective tool for governments and capitalists to de-mobilize popular struggle.

Taiwan: the new economic crisis

Coinciding with (and contingent on) China's entry into the WTO is Taiwan's accession to the world trade body. Taiwan will join the WTO not as a country, but as the 'Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu' - a membership status similar to that of Hong Kong (which became a member in 1995). [2] In its attempt to meet WTO entry requirements, the Taiwanese government is implementing extensive economic liberalization and privatization policies – a move which has exacerbated its economic decline. Having escaped the worst effects of the Asian financial crisis, four years later (in July 2001) Taiwan entered its worst economic crisis in over two decades.

In May 2001, the unemployment rate in Taiwan surpassed four per cent for the first time in 23 years, with 411,000 waged workers officially categorized as jobless. If irregular workers, informal sector workers and self-employed contract workers are included, the actual unemployment rate is more than double, at nine per cent.(Beijing Wqingnian Bao, 27 May 2001 ; Ta Kung Pao, 4 April 2001) The majority of these workers became unemployed as a result of plant closures – closures due to bankruptcy, offshore relocation, or as a means of denying workers their unpaid wages and accumulated benefits. The reality of offshore plant relocation to heighten workers' insecurity is powerfully felt in Taiwan, where the massive relocation of production across the strait to Fujian, Jiangsu, and Shanghai has seen the accumulated investments of Taiwanese capital in mainland China rise to over US$45 billion. [3] Taiwan-based industrial capital now employs more than eight million workers in mainland China – more than the entire waged workforce of Taiwan. [4]

Despite the deepening crisis faced by working people in Taiwan, the DPP government has intensified the implementation of the 'free market' policies deemed necessary to secure Taiwan's entry into the WTO. It is unequivocal about the expected social and economic impact of these measures. In April 2001, Chen Hsi-huang, chair of the government's Council of Agriculture announced that in the first four years following Taiwan's accession to the WTO, more than 100,000 jobs would be lost in the agricultural sector, with losses to the industry of US$1.5 billion. (Taipei Times, 9 April 2001 ; Taiwan Economic News, 3 May 2001) In the manufacturing sector, the government predicts an average decline of 13 per cent in industrial output in the first 12 months after its admission to the WTO. And the political pressure exerted by TNCs has resulted in the complete deregulation of the telecommunications, power and energy industries.

Taiwan: privatization and protest

The first state-run enterprise to be privatized was the Ministry of Transport and Communications’ Chunghwa Telecom, the largest telecommunications corporation in Taiwan, the fifth largest in Asia, and the fifteenth largest in the world. Given that Chunghwa Telecom is one of the largest employers in Taiwan, with a workforce of 35,000, its privatization has had widespread political and social consequences. The union representing all 35,000 workers, the Chinese Telecommunications Workers' Union (CTWU), is Taiwan's largest industrial union.

On 16 August 2000, there was an apparent resurgence of union militancy, as the CTWU led 10,000 workers and their families in protest against the conditions of the privatization programme. The union leadership demanded recognition of the union's rights during the privatization process, and sought guarantees against wage cuts and forced early retirement. By the end of the one-day protest, the CTWU leadership declared an agreement had been reached with ministry officials and management. However, the three-point agreement only referred to recognition of the CTWU's role in negotiating with management and a commitment to consider issues outside the management-labour relationship under a special governmental task-force. More significant was the agreement's recognition that privatization is an essential component of national economic policy. Both during and after the 16 August protest the union leadership did not express open opposition to privatization, clearly abandoning the militant stance which had characterized its politics during the previous three years.

This shift is explained by events earlier in the year, when the union was taken over by a pro-management faction during union elections held in March 2000. At the instigation of Kuomintang officials in December 1999, the management of Chunghwa Telecom used the corporation's financial resources and administrative interference to remove the militant leadership, ousting the incumbent union president, Chang Shu-chung, three months later. This interference was so blatant that the central government's Council of Labour Affairs was forced to issue a warning to the management for interfering in union elections and suppressing union autonomy. Despite this warning the management successfully engineered a takeover of the union. Subsequently the new leadership brought an end to militant action and openly supported privatization – conditional on certain benefits for its members. It was only after the proportion of shares allocated to employees under the privatization programme was reduced from five per cent to three per cent, combined with renewed concerns about job security and pensions, that the union organized the protest march in August.

The deposed CTWU leadership had played a key role in establishing the Grand Alliance of State-Owned Enterprise Workers' Unions with unions at Taipower and CPC ( Chinese Petroleum Corporation) in June 1999, representing more than 160,000 members. Thus the takeover of CTWU by pro-management interests and its subsequent retreat from radicalism had serious political consequences for the unions at Taipower and CPC. This was later demonstrated by their collaboration with the government of Chen Shui-bian in continuing the privatization agenda. This shift also influenced the politics of the newly created Taiwan Confederation of Trade Unions (TCTU), whose core membership is located in the state enterprise sector. [5]

Taiwan: resistance and reversal

A similar reversal and clash of interests characterized the struggle against the construction of Taiwan's fourth nuclear power plant (first announced in 1980). Since the mid-1980s environmental radicalism had been in the ascendant, based primarily on community-based struggles against toxic waste dumping, industrial pollution of river systems, nuclear reactor accidents and other ecological crises. These struggles were also expressed at a national level. The opposition movement embraced a wide range of interests, ranging from ecological concerns, the impact on the livelihood of fisherfolk, the destruction of cultural relics, and aboriginal land rights. A critical issue was the disposal of waste from the nuclear reactors.

The government's attempt to allay such fears by announcing the planned shipment of between 60,000 to 140,000 barrels of nuclear waste to North Korea only served to internationalize the issue, strengthening the regional alliances formed in East Asia with Japanese and South Korean anti-nuclear activists. Activists in Taiwan further internationalized the opposition to the fourth nuclear power plant by raising awareness of the working conditions of the Thai construction workers hired to build the new nuclear plant, and targeting the TNCs involved in exporting nuclear technology.

After his election as President, Chen Shui-bian announced in October 2000 that the construction of the US$5.6 billion plant – already a third completed - would be halted. In support of this decision over 100,000 people marched in Taipei and Kaoshung on 12 November 2000. While the scale of the protest march enabled activists to renew public concern about the dangers of nuclear energy in Taiwan and abroad, it did not revive the environmental radicalism of earlier years. The community-based activism of the 1980s against river pollution and dam projects had undergone a shift in the 1990s from direct action (including plant takeovers and land occupations) to petitions and lobbying.

One of the reasons for this decline in popular support was the worsening economic situation in Taiwan – a situation exploited by business and the mainstream media. Surveys of Taiwanese business executives and press releases by business associations drew direct links between the cancellation of the fourth nuclear power plant and decisions to relocate investment overseas.

Protest movements against the impact of TNCs on worker and community health and the environment are at the forefront of anti-globalization struggles in Taiwan. Not only do these movements challenge the interests of specific TNCs, they also confront the very logic of export-oriented growth and global markets. Local activists point out that the semiconductor industry - the engine of Taiwan's high-tech exports - generates most of the 1.5 million tonnes of hazardous waste produced annually. What is needed then, as the 'Cool Louder Web' social activists' coalition argues, is a fundamental rethinking of the economy:

Taiwan remains an economy dependent on massive exports. The vast majority

of production in Taiwan is not geared for domestic consumption, but for

foreign markets. Components and raw material are imported, processed by

workers here in Taiwan, and then sold abroad. Taiwan earns hard currency, but

has to pay in terms of the pollution that remains on the island. We may export

95 per cent of the products in a range of industries, as the government tells us

with pride, but we retain 100 per cent of the pollution resulting from

production processes. [6]

An even greater challenge lies precisely where Taiwanese social movements are weakest – in mainland China. But the possibility of challenging the ecological and health effects of joint ventures such as this is clearly diminished by its political sensitivity and the repressive response of the state. Furthermore, the capacity of social movement organizations in Taiwan to build cross-border solidarity with workers and communities on the mainland - conditioned by the complex politics of Taiwan's independence/ reunification - remains limited.

[1] In 1999 the number of poor households with at least one unemployed member was about 70.300, compared with a total of 370,000 poor households. Submission of the Hong Kong Confederation of Trade Unions (HKCTU) to the 25th session of the United Nations Committee on Economic, Social and Cultural Rights on the implementation of the International Covenant on Economic, Social and Cultural Rights, Geneva, 23 April to 14 May 2001.

[2] In 1999, Hong Kong trade officials made it clear that, despite negotiating a bilateral agreement with Taiwan in 1997, the agreement would not be signed until after China’s accession. At the insistence of the mainland Chinese government, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu will also be referred to as « Chinese Taipei » in the WTO.

[3] This level has been reached even though the Taiwan government has a ceiling of US$50 million on individual investments in the mainland to prevent over-reliance on China.

[4] In Taiwan the total labour force is 9.3 million persons, of whom 6.3 million are waged workers (Taiwan National Bureau of Budget, Accounting and Statistics, Monthly Labour Power Survey, July 2001).

[5] A year after taking office, in March 2001, President Chen Shui-bian appointed Huang Ching-hsien, chairperson of the CPC union and president of the TCTU, as one of 78 national policy advisers to the DPP government.

[6] See « Industrial structure needs rethink » on Cool Louder Web.

Reprinted in the Taipei Times, 14 August 2000