Employees of failing state-owned machinery maker China National Erzhong Group Co. are paid $60 a month after taxes and payroll deductions
BEIJING—More than 10,000 workers at a state-owned machinery manufacturer in southern China are protesting low wages and company plans to lay off thousands of staff after posting losses for three years, employees said Wednesday.
Large protests at China’s state-owned enterprises have been rare in recent years because their workers are often better protected by labour laws compared with private businesses. But some experts say working conditions have eroded as many state industries suffer overcapacity and struggle to make money.
Three employees of China National Erzhong Group Co. in the southwestern city of Deyang said workers started taking to the streets May 11 with banners protesting against corrupt and incompetent managers. They blamed management for Erzhong’s losses and poor treatment of employees.
The employees said they were demanding fair compensation for workers slated to be laid off and that the company trim administrative costs.
A worker who gave only his family name of Liu said Erzhong planned to lay off 5,000 workers and that many workers are paid only $60 a month after taxes and other payroll deductions.
The incident might reflect that China’s state-owned companies are increasingly operating on a purely commercial basis, said one labour expert.
“One of the issues is the sharp contrast between very low pay for the workers and very generous packages for Erzhong executives,” said Wang Jiangsong, a Beijing-based scholar on labour issues. “The state-owned enterprise has abandoned the tradition where the workers have a say in the operations of their company.”
The official labour union is essentially part of the management that fails to speak up for workers, Wang said.
Erzhong voluntarily delisted itself from the Shanghai Stock Exchange in April because of its poor financial performance.
Local police confirmed the protests and said they were handling them, without giving further details.