When the aging state-owned Weifang East Steel Pipe factory here in China’s northern coastal plains fell into insolvency a few years ago, unpaid workers at first responded by blocking the factory gates and marching angrily on a nearby municipal building.
Then, inspired by the spirit of capitalism consuming modern China, more than 50 employees borrowed from banks against their homes to buy the company, install new equipment and produce higher quality steel pipe, much of it for export. The newly privatized factory soon was proudly humming again.
But today it is in a new crisis, and this time the workers’ anger is aimed at the United States, which is set to impose punishing new tariffs on Chinese steel pipe imports early next year, at the behest of struggling American steelmakers.
Hundreds of plant workers have been idled, and more layoffs are in the offing. “We have followed market principles and been faithful to our American customers,” said Wu Jingsheng, the Weifang plant’s gruff general manager. “Our workers don’t know why they are being treated this way.”
In an atmosphere roiled by disputes like this one, Treasury Secretary Henry M. Paulson Jr. and other Cabinet members are preparing for the next round of a “strategic economic dialogue” beginning in Beijing on Wednesday, aimed at easing tensions between the two sides. But in many cases the two nations seem to be talking past each other, aggravated by American actions like the threatened steel duties or China’s reluctance to crack down on unsafe food and toys.
At a time of heightened American anxiety over the effects of globalization, the factory here particularly illuminates how esoteric trade disputes, where the facts are often ambiguous, usually boil down to little more than American jobs versus Chinese jobs.