After China's WTO-Entry: Butchers Struggle for Economic Freedom

One of the most popular foods in China, pork, has now come under fire. While various levels of local governments all around the country are busy to reinstall monopoly, outlaw the free trade and sale of pork across different villages and townships and monopolizing the slaughterhouse business, small market salespeople now fight for their economic survival. A new wave of street protests has emerged with outraged butchers—who still carry their work tools and that in a very visible way—during their protest rallies and sit-ins in front of local town halls, town councils, and government offices. Civil society protesters have not shaken the country since the major street protests staged by students in Beijing at the Tiananmen Square.

Today's freedom fighters are not so calm and peaceful as the students in the spring of 1989; some are, indeed, armed with knives and furious to use them, which has led already to first casualties. Such scenes are very uncommon for the observer of Mainland Chinese life. Not only in Guangdong Province, where recently there had been a series of demonstrations as well as violent clashes in the townships of Upper and Lower Lotus in Chenghai City beside Shantou City, but also in other provinces all around Mainland China similar conflicts and clashes are to be seen.

The Chinese accession to the World Trade Organization (WTO) has spurred many expectations of the common people for an open market economy. As the accession to the WTO is now widely publicized all across China, the new rules for opening domestic markets and safeguarding the private market economy found their way into daily conversations of people, from business lounges is Shanghai's top-hotels to the rural townships of Southern China.

China's people, who for a long time had no option but to completely obey the will of local elites, now start to insist on their economic rights, and fight for their economic freedom. This certainly is new in the history of modern China. While the Central government—in principle—backs the interests of the people, the local governmental authorities dare even to step back in history by issuing new documents that restrict the sale of pork across towns and monopolize the pork industry anew. Local governments in China have their own interests that work, for the most part, against the opening of markets.

Since open, competitive markets abolish the opportunity of earning a great deal of money for governmental agencies and "fraternal", protected—hence, monopolized—industries and businesses. The rapid change of the Chinese economy resulted in the widespread use of cunning methods to put aside surplus value into the private spheres of certainly a not insignificant number of local government officials and employees. Local people speak of the patronizing system as the rule of how things go in most of China.

Far from taking money themselves—which is a criminal offence in China that is also punishable with the death penalty—local government elites cooperate with loyal businessmen, friends and family members (including uncles, cousins, former class mates, etc.) who, then, are key recipients of concessions, licenses, as well as production and trade monopolies. Government land and confiscated property (including the property of a vast number of highly profitable enterprises that undertook smuggling and other illegal measures to multiply their profit margins) also become commodities of China's highly patronized economy.

Money extraction by way of illegal means does not confine itself to the private economy, also the government itself is experiencing a massive loss of public money. One particular popular way of extracting money into private pockets is overpricing (that is, bills show higher amounts than the price actually paid), another is overuse of public funds if form of oversized construction and excess purchase office goods (such as personal computers) that can find their way easily into private homes.

The quintessence of the patronizing system is the exchange of favors and money with the aim of enriching either oneself or, in most cases, a friendly person who in exchange offers something else, either promptly, or in the near or distant future. Under the planned economy, local government people were used to be kings in their own kingdoms, since Beijing was and still is far away.

Hence, local butchers are once again overwhelmed by the power of local elited that deprive their right for economic freedom. This newly aspired freedom is now greatly supported by the Central government. Though Beijing controls legislation, local governments interpret laws on a case-by-case basis. Each decision in court is reached independently from all other decisions across China and even in the same courthouse.

Thus, the very same case reaches different verdicts across courts and also with each judge, depending on the goodwill of the judge who is tightly controlled by local government officials. Therefore, in case of any wrongdoing, local governments can only theoretically be sued in local courts, since every time the leadership of the local government wants, it can directly (via informal ways) or indirectly (through appointment and evaluation of judges) influence the verdicts in local courthouses.

Today, the law enforcement system in China faces a tough period of transition, with many local lawyers and judges not familiar with national legislation of the day. In addition, there are the vital interests of local government officials and their friendly businessmen who extract money from official monetary circles, as well as the private economy by illegal and unfair means.

The new series of protests staged by thousands of butchers who face the loss of their only source of income, that is sale of pork on wet markets, due to risen prices of newly monopolized slaughterhouses, is a new phenomenon of transitional market economy in China.

Now that China has entered the WTO, such moves of local governments threaten the well-being of the Chinese economy, unleash a deterioration of labor and consumer markets, and endanger the social fabric that already has to deal with mounting and, in essence, unstable conditions due to fast socioeconomic changes.

The Anti-Unduly Competition Law of 1993 prohibited governmental authorities to abuse their power and to restrict the natural flow of commodities. For the sake of China's WTO entry, the State Council issued last year Act 303 to prohibit the obstruction of the market economy. But, the essential structure and features of China's law system and the system of local governance with the existing problematic interference of interests of local elites, as it seems, make the enforcement of WTO regulations very difficult; and sometimes, as of today, even impossible.

by Christian Aspalter (Hong Kong/Taiwan).

Note: the author would like to thank his friend ("W.") with whom he shared many lengthy conversations and whose full name he would like not to mention to safeguard his future promising career as a lawyer who keenly protects the interests of the disadvantaged, of the common people, in the context of a fast-changing society in Mainland China.