Open letter to Jiang Zemin from the workers of Liaoyang Ferroalloy Factory

5 March, 2002

Esteemed General Secretary Jiang Zemin: Greetings!

At a time when the nation continues to grow and prosper, government policies are proceeding well and the people live in peace. All the workers from Liaoyang Ferroalloy Factory in Liaoning Province send our most sincere greetings to our nation’s highest leader.

Formerly, the Liaoyang Ferroalloy Factory was a comparatively profitable large-scale state owned enterprise producing for both the domestic and overseas markets. In those days, the living standards of the workers continuously improved.

But now our factory is bankrupt and the overwhelming majority of its workers have been reduced to unemployed vagrants and we are furious. Most of us here have met with disaster and, as we have no other option, we address this open letter to you in order to recount the events leading up to, and since, the bankruptcy. We express to you, as a respected elder, the heartfelt aspirations of the entire workforce and fervently request that you find time in your busy schedule to address the uncertainties and perplexities in our hearts.

Liaoyang Ferroalloy Factory was a medium-size state owned enterprise with a long history of over fifty years. All the property and assets of the factory were derived from the hard work, blood and sweat of generations of workers. In the early days, the factory was no more than a small-scale smelting workshop producing phosphorus-based products. All the facilities, equipment and buildings were crude and simple. Production capacity was negligible and it was only after [the national] liberation and under the subsequent solicitude and support of the Party and government, combined with the hard work of a generation of older workers who suffered great hardships that the Ferroalloy Factory transformed, gradually, from a small-scale, backward workshop into a medium-size state owned enterprise. Every year, Ferroalloy contributed millions of yuan in tax and profits to the national treasury and the standard of living of the whole workforce rose. This success did not come easily. It was the result of our pioneering efforts to overcome countless challenges in conditions that were reminiscent of wartime hardships.

Following the introduction of the reform and opening up policy, Ferroalloy faced the mighty torrent of the market and its economic performance came up against an unprecedented test. However, it was certainly not the case that domestic and foreign customers were not interested in our branded products. What we needed to overcome the various problems that were facing us was a competent policy maker and honest leadership capable of taking advantage of the ready market for our goods. At the same time, this would have raised the nation's revenue from profits and tax. The workers would have continued to live in peace and prosperity and the factory flourished.

Who could have foreseen that once Ferroalloy’s former director, party committee secretary and general manager, Fan Yicheng, had commandeered his positions at the factory, the workers days were numbered? With the factory facing the massive challenge of the market and in already trouble, it was Fan Yicheng’s duty, in his official position as both managing director and legal representative, to construct a strategy for improving the overall economic performance. It was his responsibility to provide leadership in improving product quality, output performance and profitability of the enterprise: to inspire the entire workforce to grasp and overcome the difficulties in front of us.

Fan Yicheng did none of this. Following his appointment he adopted a policy of cronyism in which all those who submitted to his will did well and anyone who resisted was dealt with. All dissent was outlawed. His close aides, friends and relatives were placed in company positions from which he could directly benefit. At the instigation of Liaoyang's former mayor and party secretary Gong Shangwu, Fan Yicheng set up a number of independent enterprises - such as the Ya Kuang Company, Boronalloy Factory and the Sai De Company - and arranged fictitious domestic and foreign links and contacts. These people worked hand in glove as a team to swallow up billions of yuan in national funds resulting in losses of billions of yuan in state property - we have detailed evidence of all this. Ever since this group of corrupt people linked up in 1995, they have acted in cahoots to reduce, by double-dealing and plotting, a perfectly good SOE to absolute chaos: production stopped, workers were laid off and employees driven to indescribable despair. The sweat and blood of workers has been used to nurture a colony of parasites. Under the pretext of procuring goods, Fan took holidays abroad and gathered up large amounts of foreign exchange to fill his own personal coffers to the brim. At the factory he bullied and intimidated workers and used hundreds of thousands worth of public funds to refurbish his house and send his two children abroad to study. Fan and his corrupt friends used state funds to eat, drink, gamble, whore and anything else they felt like doing. There were no limits to their extravagance.

Even more serious was the refusal to pay employee's pension insurance contributions from 1995 to 2000, resulting in arrears of Rmb 27 million. As a result, now the factory is bankrupt we are unable to draw our pensions and have no way of meeting our livelihood expenses. Forced into a corner by these circumstances, we began to organize collectively in 1998 to expose and denounce Fan Yicheng and his gang's corrupt behaviour. We have petitioned and reported to the relevant departments at city, provincial and central levels. At the time, city officials reassured us with moving commitments to solve the problems to everyone's satisfaction, but matters have turned out very differently from how we hoped they would. Far from addressing our concerns in a conscientious manner and criticizing Fan and his fellow rogues, they resorted to repression, defiling public opinion and enforcing the planned bankruptcy in an attempt to cover up the heinous crimes of these blood-sucking devils. False bankruptcy and real corruption has been the strategy to achieve their wicked aims, leaving the workers in wretched circumstances.

The events of the meeting convened to vote on the bankruptcy, held the day before yesterday, have left us boiling with anger. On that day, the government ordered the police to arrest three workers’ representatives for no reason and place them in custody in the police station. On the same day, when the results of the vote were announced, police were deployed at the factory gates in full battle array and, police cars were cruising around everywhere. It was if they were preparing for a full-scale attack from a formidable enemy. Workers who for special reasons were unaffected by the bankruptcy were manipulated into casting their vote in favor of it.

All this amounts to a bankruptcy that seriously violated the Bankruptcy Law's regulations: the financial affairs of the factory were left unsettled, those responsible were not dealt with, no measures were put in place to implement statutory re-employment or welfare policies and even several years of unpaid wages were left in arrears. We believe that company bankruptcies can be caused by a whole range of internal and external matters. But no matter what the circumstances, if there is no other alternative, the bankruptcy proceedings must follow the national Bankruptcy Law and procedural documents released by the central government. Ferroalloy's bankruptcy was not the result of the economic restructuring any more than it was brought about by poor sales. It was the direct result of co-ordinated embezzlement of national assets and leaching on the workers’ sweat and blood, by Fan Yicheng and his gang of parasites with the collusion and support of former mayor Gong Shangwu. These people do not care if working people live or die, neglect their managerial duties, wreak havoc with financial discipline and lend or borrow public funds at their own whim. Many forms of open and covert waste, totally unmanaged and unquestioned dripped, leaked and oozed its way out of the deeply flawed production operation. Billions of yuan of national property simply disappeared as a result of shocking criminal behavior that has left us so angry that no punishment would atone for it.

The entire workforce at Ferroalloy reacted with profound indignation in the face of such contrary and even perverse behavior and organized a three-year struggle against corruption. To our regret, we failed to achieve any effective results and the enforced bankruptcy of our factory has been implemented leaving the workforce in a state of poverty. We have no pensions or medical insurance and there is also no minimum livelihood fund. To date, the promises of adequate welfare that the government made in a draft document prior to the bankruptcy have not been met. The bankruptcy went through leaving the workforce in tears and the corrupt officials laughing all the way to the bank. Moreover, they are now using the embezzled funds to set up a new privately-run enterprise(s). As if by magic they have metamorphosed into entrepreneurs using the workers’ sweat and blood as building blocks for their nest of corruption. Illegal activities have produced a legal company and the government has done its utmost to cover up and collude in this almost perfect crime. Where on this earth are we to go to find reason and justice? Is it possible that a Chinese nation under the leadership of the Communist Party can leave no space for workers? Is there no other road except this road to tragedy?

The Chinese Communist Party has led the broad mass of the Chinese people through eighty years of bitter struggle that continues to this day. The party's aim has been to serve the people and their pursuit of prosperity and well-being. Ever since the deeply respected Chairman Mao's conception of serving the people, to your respected self’s concept of the "Three Represents", all levels of the people's government have worked unstintingly, especially following your "July 1" speech, to strike root in the hearts of the people, encourage the people's aspirations, inspire their energy and provide hope! But to our regret, the Liaoyang government leaders have simply paid lip service to the concept of the Three Represents, and failed to implement your directives. In reality, rather than represent the interests of the broad mass of the people, they have represented interests of venal officials. When workers have put forward reasonable and legal propositions to oppose corruption and provide welfare, they have resorted to myriad ways of perfunctory solutions, procrastination, delay, connections, gerrymandering and the use of force to counter the working masses. In essence, they have openly shielded and tolerated a clique of corrupt people who have committed the crime of harming the people, clearly not followed the Central Committee's instructions. In fact, they have sung an entirely different tune from the government’s policies of making proper arrangements for laid off workers and the livelihoods of workers from the bankrupt factory – a case of publicly agreeing but privately sabotaging, deceiving their superiors and duping those below them in their base behavior. (Fan Yicheng and the other parasites’ few days in detention was billed as house arrest and having to report in regularly to the authorities. But they are all now safely in their homes and have got off scot-free).

Respected and beloved Secretary General Jiang, we do not oppose the leadership of the Party or the socialist system. Aside from demanding our legitimate and legal rights, all our efforts have aimed to help the country dig out and eliminate all the corrupt worms boring way at and ruining our socialist economic system. The Liaoyang government has used violent suppression against us while corruption has been glossed over leaving nearly all of us wondering and perplexed. We fear that bankruptcy has no precedent in China and it is a strange and new experience that has come into our lives. We believe that pushing several thousands of workers to the edge of destitution will have a profoundly negative influence on social stability and totally goes against the spirit of the directives in your "three represents theory".

Since the reforms started, the Chinese working class has been the Party’s source of fresh, combat-ready troops in the economic battles that have faced our country. From our studies of Central Committee documents and your “Three Represents” speech, we know that working class is still society’s foremost source of wealth and also it’s driving force. To ignore this truism would be an irreversible mistake and could even put the country into great peril. The vast majority of workers have been driven beyond the limits of forbearance by this group of people who have colluded together with Liaoyang government leaders in a swamp of corruption to shore up their own interests, maintain their official jobs and positions and ignore both party discipline and national laws. As such, we six thousand workers eagerly wait your being able to find time in your busy schedule to give us a clear answer and shed light on the confusion in our hearts. We do not have the capacity to take the Liaoyang government through the courts and currently face a future of barely being able to put food on our table. Where would we get the money? It would be prohibitively expensive and even if we had the funds, it would be impossible to win such a case. Over the past three years, we have petitioned the Disciplinary Committee, the courts, the procuratorate at provincial level and in Beijing, as well as the General Office of the State Council and the Economy and Trade Committee on many occasions. We have sent documents and materials by post and delivered it personally by hand, but all to no avail. Faced with this tragic scenario and with no other option or way out before us, we hope that you, as our leader, can lead us out of this darkness and put us back on the right track. Send us a team of good cadres to investigate and clean out the crimes of these corrupt people and deal with this matter in the spirit of justice. We fervently hope that you will read this letter. It is perhaps more than we deserve that you hold-up your valuable time but there are genuine reasons for our actions. We had no option but to write directly to you.

Finally we wish you a long and healthy life and offer our deepest respect,

Yours sincerely

The unemployed former workers of the bankrupt Liaoyang Ferroalloy Factory, Liaoning province.