PROOF THAT CAPITALISM HAS FAILED

By Philip P. Pan Washington Post Foreign Service Sunday, August 4, 2002; Page A01

DONGGUAN, China -- Wang Xiao had been working in thesneaker factory for only a few months when she noticed a strange tingling in her feet. Over time, the sensation spread to her ankles, then her shins. Her fingertips went numb next, and her appetite disappeared. Soon, the mother of two was so weak she could barely climb the stairs to her factory dorm room.

At first, Wang, 33, thought it was just exhaustion from work, or maybe a stomach flu. After all, she recalled, she had been putting in 17 hours a day, gluing together sneakers that would be shipped from this industrial city in southern China to shops across Europe and the United States. Morning after morning, she joined 2,000 other workers on the assembly lines at the Taiwanese-owned Anjia Footwear Factory, determined not to quit until she saved enough to build a new house back in her home village.

She never suspected that toxins in the glue were slowly destroying her nervous system.

So the numbness continued to spread. It moved past her wrists and up her forearms. It crept along her legs and seized her knees. Just standing became a challenge. Finally, too sick to work, Wang quit and went home. Weeks later, she woke up paralyzed, unable even to wiggle a finger.

Now, despite a year-long search for treatment, Wang remains confined to a hospital bed, barely able to walk. Her misfortune has been compounded by medical bills that have wiped out years of savings and knocked her family, once on the verge of escaping poverty, back into debt and destitution.

Caught in China's wrenching transition from socialism to capitalism, huge numbers of industrial workers such as Wang are falling ill or suffering injuries on the job, then fending for themselves with little or no health insurance.

Unrestrained by labor unions or a strong legal system, businesses seeking to maximize profit have allowed job hazards to proliferate. China has adopted work safety rules, but enforcement is lax because local officials often can be bribed, and they are worried about chasing away factories that pay taxes important to their budgets.

Most vulnerable are about 150 million to 200 million migrant workers from China's impoverished countryside, many so desperate for work they will take any job, no questions asked. Managers often fire them if they get sick, sending them back to their villages, where they may never realize the cause of their illnesses and where access to medical care is least certain.

By the government's own count, 25 million workers in China are in regular contact with hazards such as toxic chemicals and coal dust, and 13,000 new cases of job-related illnesses are reported every year. Tens of thousands of other workers are injured or killed in industrial accidents.

At the same time, market reforms have undermined the socialist health care system that once covered 90 percent of China's population. In its place has emerged a jungle of a medical system in which many workers are receiving inferior care, at higher costs, with little or no insurance.

The wealthy have access to better health care than before, but increasingly the poor must take their chances with bad doctors and bogus medicine -- and pay for it in cash. Researchers say illness has become the leading reason why Chinese families fall below the poverty line.

"I never imagined this would happen when I went out to work," Wang said, wiping away tears. "My husband worked so hard, and my two kids -- one is in the first grade, the other is in second grade -- we need money for both of them. . . . Now, all the money is gone."

Pursuing a Dream

The Wangs are natives of Tiegang, a dirt-poor hamlet in the mountains north of the central Chinese city of Wuhan and about 400 miles west of Shanghai. There, children play barefoot on rock-strewn paths, using discarded syringes as water guns, while grandparents toil in fields of peanuts and sesame, straining to bring in a harvest large enough to feed their families and pay their taxes.

Most houses in the village are rickety structures made of stones and logs. But in recent years, some families have saved enough to build brick homes. That was Wang's dream. She and her husband pursued it by joining the millions who have left the countryside for work in the cities.

She landed a job as a seamstress in Wuhan. He found work as a carpenter. Year after year, they saved. Then, in 1997, Wang gave birth to a boy, her second child. Local officials who enforce China's one-child policy fined the couple nearly $1,000, draining their savings, they said.

Last March, they entrusted the children to relatives and left home again. Wang's husband returned to Wuhan. She ventured farther, all the way to the Pearl River Delta, a manufacturing area just north of Hong Kong.

She said a relative helped her get a job at the Anjia Footwear Factory in Dongguan, one of hundreds of plants in the region that together produce a large share of the sneakers sold in the United States. Factory officials said Anjia alone churns out 5 million to 6 million pairs every year. They declined to identify their customers, but the North American retail chain Payless ShoeSource confirmed it was one of them.

"I started at 7:30 a.m. and took an hour break for lunch at noon. At 6, we had another hour for dinner, and after that there were the night shifts," Wang recalled. "It was such an exhausting job. I worked until 2 or 3 in the morning. If the next day was a holiday, like Labor Day, we would work until 4 a.m."

Making a sneaker was a three-step process. First, one team of workers cut out the pieces of rubber, foam and fabric. Another division sewed and glued the pieces together. Finally, a third group glued the sole to the rest of the sneaker.

Wang was a member of the second team. She and about 700 others, almost all of them young migrant women, toiled in a vast workshop, hunched over long rows of sewing and gluing machines. All day, she glued together foam sneaker pieces.

"The windows were small and there was hardly any ventilation," Wang said of the factory. "Before work, we were allowed to turn on the fans. But as soon as the machines were on, we had to turn the fans off. . . . If we used a fan, the glue would dry up and it wouldn't spread very well anymore.

"It smelled horrible," she continued. "There was an oven, and the heat swept over us. After we brushed glue on each pair of shoes, we sent them to the oven and got another pair to work on. . . . They scolded us whenever we slowed down."

James Zhou, the general manager, acknowledged ventilation problems in the plant, but he said he ordered new equipment installed as soon as he learned from local officials last month that his workers were getting sick.

He also acknowledged workers were sometimes required to work extra hours, when power blackouts put the factory behind schedule, but he denied they ever worked more than 52 hours a week. He said labor and health officials inspect the factory at least once a year, and it has always passed.

Timothy Reid, a spokesman for Payless ShoeSource, said the company sent inspectors to the plant and began canceling orders as soon as the factory informed them of the problem. He said Payless sets "strict standards" for its many suppliers and would resume the orders only after the factory finished carrying out changes Payless demanded and ensured workers werE safe.

Zhou said the factory has switched to a safer glue. The original was imported from Taiwan and had been approved by the Chinese government. He said managers had no idea it contained n-hexane, a hazardous solvent also found in spray paint and cleaners.

Long-term overexposure to n-hexane damages the peripheral nervous system, causing numbness, muscle weakness and eventually paralysis. Doctors first diagnosed the problem among shoemakers in Italy in the 1950s; similar cases have been reported in many countries, including the United States.

But n-hexane appeared in China only in the 1990s, after the country opened up to foreign trade and investment. Regulators have struggled to keep up with the growing number of dangerous foreign products now used in Chinese factories.

Market reforms have also weakened the government's ability to enforce safety rules. State-owned mines and factories have cut safety and health budgets to avoid bankruptcy, according to a senior occupational health official, who asked not to be identified. And the government has trouble imposing order on the new private sector, especially small enterprises that have proliferated across the countryside.

Here in Guangdong province, for example, a recent study conducted by a provincial task force found that 96 percent of businesses contained dangerous levels of hazardous chemicals and dust in the air or were otherwise in violation of health standards, according to an unusually candid story published last month in the Yangcheng Evening News, an official provincial newspaper. Sources said government censors ordered a clampdown on coverage of the subject soon afterward.

The number of workers getting sick in Guangdong each year is rising at an annual rate of 70 percent, and at least 2,500 people have died of occupational illnesses since 1989, the report said.

The Chinese government acknowledges the problem and is trying to solve it, saying the annual cost of work-related accidents and diseases exceeds $1.2 billion. In May, it put into effect a new law setting stricter safety standards.

But based on experience, enforcing the law is likely to be difficult. One problem is a severe shortage of trained health inspectors. Even in Guangdong province, among the nation's wealthiest, the ratio of health officials to workers is 1 to 10,000, compared with 1 to 300 or 500 workers in other nations, the Yangcheng Evening News said. Only seven of 21 counties have offices assigned to preventing occupational diseases, the newspaper said.

But the most serious challenge may be to find a way to compel local officials to impose safety rules on businesses that are often run by their friends or relatives.

In many places in the Pearl River Delta, well-connected factory managers simply refuse to let health inspectors in, the Yangcheng Evening News reported. Some local leaders "tacitly consent to and support" businesses when they block health officials from examining workers; others help them pay off workers and cover up problems.

High Cost of Health Care

It was after the Dragon Boat Festival in late May that Wang's hands and feet went numb. By July, she was having trouble walking and needed to stop and rest every few steps.

Finally, a friend took her to the Dongguan Qingxi Hospital, where a doctor examined her and told her she needed to be admitted.

"I asked how much it would cost," Wang recalled. "The doctor said, 'You're worried about money when you're in this condition?'"

Wang said she had saved only $125 after nearly five months at the factory, and she was worried about what would happen when she ran out of cash. So she left, quit her job and boarded a train for home, where at least she would be near her family. She was so weak, she said, she could not even pack.

Before market reforms, nearly all workers had government health insurance. Now, those employed by troubled state industries often have only limited coverage, and those who have been laid off can lose it completely.

Migrant workers like Wang have the least protection. City governments consider them outsiders and rarely require companies to cover them. And in the countryside, the rural communes that used to pay basic medical expenses have been dismantled.

Wang said she tried getting help at two state hospitals near her village, but was quickly overwhelmed by the cost. She said a hospital in the nearby city of Xiaogan billed her almost $150 for a week of tests, equal to more than a month's pay at the sneaker factory. Then, she spent a week at Xiehe Hospital, Wuhan's largest, and was charged about $500 more.

She said doctors at Xiehe diagnosed a neurological disease, possibly caused by poisoning, and gave her shots that seemed to help. But the medicine cost $20 a day. After eight days, she asked the doctor to recommend cheaper medicine and left the hospital.

Medical bills have risen largely because Beijing has been withdrawing subsidies to hospitals, part of an effort to pass costs and responsibilities to local Authorities. But the localities have not stepped in, and hospitals are trying to survive by passing more costs to patients.

"We are going through a lot of reform now. . . . Government funding has always been small, and now it is even less," complained one doctor at Xiaogan Central Hospital, who asked not to be identified. "Sometimes the government even asks us to make money."

Another important change occurred in the early 1980s, when China closed down its communes and allowed peasants to lease individual plots of land. The policy boosted rural income, but it cut off funding for the acclaimed "barefoot doctors" -- peasants with minimal training who mounted public health campaigns and provided free, basic care across the countryside.

Now, rural residents turn to slightly better trained "village doctors" who usually run private clinics. Patients receive similar low-quality care, but they must pay for it. Like the hospitals, these doctors routinely overprescribe medicine and sometimes sell fake drugs to make more money.

Wang visited two such clinics near her village, one opened by a cousin who passed his doctor's exam after three years of self-study, the other by a man she heard possessed secret cures handed down by his ancestors.

Wang spent 2 1/2 months at her cousin's clinic, a one-room storefront in Xiaogan equipped only with a bed during a recent visit. Wang Yunchu, her cousin, said he diagnosed a type of neuromuscular disease and prescribed several drugs to treat it.

"I gave her a discount on the services," he said, "but not the medicine."

Wang Xiao spent another two months at Ren Dingli's 15-bed clinic in nearby Dawu county. Ren said he diagnosed rheumatoid arthritis and treated her with acupuncture and a therapy that involved sending electricity through needles attached to her arms, legs and shoulders.

Wang said she was not much healthier when she left the clinics, but she was definitely poorer. The two doctors billed her almost $700.

"I'll never forget it," said Wang Kunming, her husband. "When we came back from Dawu, I only had three yuan [37 cents] left in my pocket."

'Rescue Mission' Launched

When they were almost out of money, the Wangs returned to Tiegang.

Day after day, Wang Xiao lay inside the shack-like house she had dreamed of replacing. Barely able to move, she relied on her husband for everything. He fed her. He scratched her when she itched. He gave her massages, hoping to restore feeling to her limbs.

He said he borrowed more money and purchased more medicine. He gave her shots, sticking the needle where a doctor had marked a spot with a pen. He experimented with medicinal herbs, boiling so many he ruined their cooking pots. Altogether, the family spent nearly $2,500, equal to more than two years' pay at the factory.

Then, after about six months, a local official showed up at their home and told them authorities in Guangdong were looking for women who had been poisoned at a sneaker factory.

For the first time, Wang realized she was not alone.

The husband of another worker had written letters to 20 officials, pleading for help because he believed his wife had been poisoned at the factory, sources said. All the letters apparently were ignored except one that went to the party-controlled All-China Women's Federation. A legal aid worker there contacted health officials and mobilized a "rescue mission" to find the workers, according to state media.

The factory immediately accepted responsibility and fully cooperated, state media said. Zhou ordered physical exams for all workers exposed to the glue and sent eight with possible poisoning symptoms to the hospital.

He said managers also compiled a list of all former workers who may have been exposed in the past decade. To date, the women's federation has located 34 former workers with symptoms and brought them to Guangdong for treatment, he said.

Zhou has promised the factory will pay their medical expenses. But he said some customers, afraid of bad publicity, have canceled sneaker orders. He said the factory might shut down if others follow suit.

Thirteen workers remain in the hospital, including Wang Xiao. Doctors say they hope she will recover fully, perhaps in a few months or a few years. But in some cases, the effects of the poisoning are permanent.