One sector of the Chinese economy that has not been widely discussed is that of producer cooperatives. Questions and disputes persist about state owned enterprises versus private market oriented producers. Little has been said, however, about cooperatives, which operate within the market, but have socialist characteristics. Cooperatives are found throughout the world. They range from the massive Mondragon complex in the Basque country of Spain with 47,000 workers and joint ventures in many countries, including China, to small cooperatives with just a few members in most cities and regions of the world.
Cooperatives in China have a distinguished past. The most important network of cooperatives is that of the Gung Ho movement. Gung Ho (the Chinese characters for –work together”) is the name for the industrial cooperative movement that was started in China in 1937 by Chinese activists and foreign friends, including the legendary New Zealander Rewi Alley and the well-known American authors Edgar Snow and Helen Snow.
As the International Committee for the Promotion of Chinese Industrial Cooperatives (ICCIC, the Gung Ho international committee) says, –the movement aimed at organizing the unemployed workers and refugees from Japanese aggression for production to support the War of Resistance.” The movement was set up in Wuhan in 1938 with Rewi Alley as the technical advisor.
Cooperatives were organized throughout unoccupied China with about 30,000 people in 3,000 cooperatives when the movement was at its peak in 1941. Cooperatives made over 500 different products from daily necessities for the people to blankets and weapons for the Chinese army. The spirit of hard work of the Gung Ho cooperants was the source for the English expression, –gung ho”. The ICCIC, the international committee, which was set up in Hong Kong in 1939 with Madame Sun Yatsen as its honorary chairperson, collected funds from all over the world to help set up and supply the cooperatives. By the end of World War II, $10 million (US) had been collected from all over the world, including Canada, to support Gung Ho cooperatives. Many foreign technical experts also provided support.
The importance of the Gung Ho cooperatives in the liberation of China was recognized initially by Mao Zedong, Zhou Enlai, and many other revolutionary leaders. But, when economic priorities in China changed, the headquarters of ICCIC were disbanded in 1952, In the ensuing years the cooperatives were incorporated into communes and factory collectives in the restructured economy.
Later restructuring of the economy allowed new forms of economic responsibility, and in 1978 Rewi Alley along with other Gung Ho veterans led a revival of Gung Ho. New cooperatives for promoting socialist modernization were formed through the Association of Chinese Industrial Cooperatives. Rewi Alley said in 1982, cooperatives provide –the sure base for socialism, the foundation for any working democracy.” Finally in 1987, ICCIC (the international committee) resumed its activities with Rewi Alley as its chairperson. Alley died shortly after, and Yang Bo took over the position of chair. I personally visited five Gung Ho cooperatives in China in 1987 and observed some of the first halting steps. Many of those new cooperatives were directed by entrepreneurs and experts rather than the cooperants themselves, but in the meantime the national office has encouraged cooperative management.
Cooperatives in the Gung Ho network are encouraged to comply with the following cooperative principles: –voluntary organization, self-funding, self-government, independent accounting, sole responsibility for profits and losses, democratic management, distribution to each member according to his/her work, and appropriate distribution of dividends, and to play a demonstration role.” (From the ICCIC statement.) Under these principles, the cooperative movement in China has been developed anew. There are now over 30 cooperatives in several experimental zones with around 2000 members.
The Shanghai Wooden Furniture Factory and the Shanghai Elastic Webbing Factory are two examples of healthy cooperatives, which have been built out of the demise of the earlier state-owned enterprises. The furniture factory was bought from the state by its 187 workers in 1994. They follow the principle of one-person one-vote with a director elected by a general meeting of the worker shareholders. Distribution is to each according to his/her work plus dividends according to shares. As reported in the latest ICCIC newsletter #60, –deep-going changes have taken place in the enterprise since the reform: annual profit and tax increased on average by 12 %, and current fixed assets are quadruple that of 1994.” Even greater improvements are reported for the webbing factory since it became a shareholding cooperative in 1995.
As its recent constitution states, the ICCIC has three important tasks: (1) to –develop extensive liaison with international cooperative organizations, friendship organizations and individuals who wish to support the cooperative movement Ä”, (2) to –guide and promote the organizing and developing of cooperatives of different types with industrial cooperatives as the mainstay Ä”, and (3) to –study the experience of promoting industrial cooperatives and other forms of cooperative enterprises at home and abroad.”
The ICCIC has given leadership to new cooperatives with the help of other organizations in China and abroad. Out of the fourth World Womenęs Congress in Beijing a womenęs cooperative development program was set up with the support of the Womenęs Federation of China through its local chapters. The ICCIC has sponsored numerous forums, training courses, and international exchanges. On the occasion of the International Day of Cooperatives (set up by the UN eight years ago), the first Saturday of July, a forum was held in Beijing this year in cooperation with many other Chinese societies and federations of cooperatives.
At that meeting, Yang Rudai (of the Chinese Peopleęs Political Consultative Conference) said, –In view of Chinaęs accession to the WTO, the domestic and overseas markets will become more competitive, and will unavoidably pose a challenge to groups without advantages in market competition. Judging from the experiences at home and abroad, cooperatives are an effective organizational form for the weak to unite for economic self-protection and self-development under the conditions of a market economy; the force for promoting the development of advanced productive forces Ä ; the media carrier of advanced culture for conducting education on collectivism Ä ; and an effective tool for protecting the interests of the broadest possible masses of the people.” (From the Beijing Xinhua Domestic Service, July 2002.) Cooperatives in China have become a way of alleviating unemployment, reducing poverty, promoting self-determination and cooperation, and narrowing the gap between the rich and the poor in the midst of globalization.
ICCIC has a partnership with the Canadian Co-operative Association for training and sustainable development of cooperatives. The Canada-China Gung Ho Development Project was set up in 2001. The three-year project has the goal of –assisting cooperatives in their efforts to improve the social-economic status and self-reliance of individuals within the community and globalised economy by reducing poverty, equally distributing sustained increases of income, and increasing democratic participation of men, women and youth in civil society in China.”
The Gung Ho movement is living up to its name and reconnecting with international friends. Within China, it is lobbying for a strong law on cooperatives and promoting easier credit terms for small producer cooperatives. It is facilitating the growth of cooperatives in China and the development of a network of cooperatives and supporting organizations. Internationally, the Gung Ho movement is increasing its ties to other cooperative associations and federations from which it can learn and exchange expertise. It is also looking for financial resources and individual expertise as it continues to grow.
Much of the information for this report and descriptions of other projects and needs are found on the Gung Ho website: www.gungho.org.cn/enindex.htm.Include the citation below and GEO Newsletter grants permission to copy, use, and distribute this article.