China seeks to curb unrest amid global crisis

BEIJING Wed Nov 19, 2008 9:09am GMT

People stand in front of screens showing stock information at a brokerage house in Wuhan, Hubei province November 18, 2008. REUTERS/Stringer

People stand in front of screens showing stock information at a brokerage house in Wuhan, Hubei province November 18, 2008.

Credit: Reuters/Stringer

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BEIJING (Reuters) - China has told police to ensure stability amid the global financial crisis after thousands of people attacked police and government offices in a northwestern city in unrest triggered by a plan to resettle residents.

After decades of solid economic growth, China is battling an unknown as falling demand for its products triggers factory closures, sparks protests and raises fears of popular unrest.

Rioting involving thousands of people exploded on Monday in Wudu, in Gansu province's poverty-stricken region of Longnan, where 1.8 million people were made homeless by the May 12 Sichuan earthquake.

The unrest, which flared up again on Tuesday, saw rioters invade local government offices, loot equipment and torch police cars.

Public Security Minister Meng Jianzhu said police "should be fully aware of the challenge brought by the global financial crisis and try their best to maintain social stability," according to the China Daily.

State media said the riots were triggered by a scheme to move the government headquarters to a neighbouring county, which would force local residents to relocate, and had prompted fears from some residents about future housing and livelihoods.

Youtube footage (here) showed police struggling to restore order while being pelted with stones. Pictures on Chinese web portals showed columns of armed riot police sheltering beneath shields.

An uneasy calm had fallen on Wudu on Wednesday, after authorities ordered an evening curfew and closed major streets and local businesses, according to local residents, who said heavy-handed police had inflamed the riots.

"No one's rioting today, the streets are all closed ... People will be snatched if they go out after 10 p.m. at night, so no-one dares to go out," a hotel worker who declined to leave his name told Reuters by telephone.

"Actually, there were only a few thousand petitioners, but police fired tear gas which made women and children sick. This made the others angry," he said.

"CRIMINAL ELEMENTS"

The Longnan local government on Tuesday said the riots were caused by "criminal elements" who used a complaint from a few dozen petitioners as a pretext to create wider havoc.

Officials contacted at the Longnan city government on Wednesday declined to comment.

Gansu provincial authorities had sent an emergency security force to maintain order and ordered main streets to close and television stations to let "the masses understand the true situation."

Gansu Communist Party chief Lu Hao ordered authorities to strike hard at a "small minority with ulterior motives," but said governments at all levels needed to draw lessons from the incident, Xinhua news agency quoted him as saying.

Lu said the government resettlement plan was not yet fixed, but suggested the unrest stemmed from frustration over post-quake reconstruction.

"The rebuilding task in Longnan and Wudu district which were damaged by the May 12 quake is extremely urgent. The central government has already approved the reconstruction plan ... Seize the opportunity to boost domestic demand and construction in quake-affected regions," Lu said.

China approved a 4 trillion yuan (391 billion pounds) government spending package earlier this month to pump up demand as annual growth in the third quarter slumped to 9 percent, putting the country on track for its first single-digit expansion since 2002.

Faltering economic conditions have raised the spectre of growth falling below 8 percent, which the government regards as a benchmark to create enough jobs to sop up excess labour and guarantee social stability.

The Longnan rioting follows a number of strikes by taxi drivers and labour protests in the country's major export regions, where thousands of factories have closed in recent months, prompting fears the global financial crisis could stir wider popular unrest.

IMA Asia, a business intelligence provider, said it had raised its political risk rating for China from low to medium without any mention of the Gansu trouble.

"We are concerned about the potential for unrest within a massive pool of migrant workers who face lay-offs in the construction and export manufacturing sectors," it said.

But while incidents of unrest would increase, they would likely continue to remain localised, said Russell Leigh Moses, a Beijing-based analyst.

"Protesters understand what the rules of the game are," he said. "...You do not see these incidents of unrest reaching across provinces."

($1=6.823 yuan)

(Reporting by Ian Ransom; Editing by Nick Macfie and Jerry Norton)

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