In Dujiangyan in Sichuan province this month, police confiscated several unlicensed bicycle-carts belonging to unpaid factory workers who were using them for part-time work.
On September 3rd, hundreds staged a protest at city offices. Officials refused to come out. Workers' anger boiled over and riot police had to be called in to quell the disturbances.
This incident is an example of rising workers' resentment in China as ailing state-owned enterprises lay off employees or fail to pay wages. The potential for instability has become so worrying to China's leadership that President Jiang Zemin yesterday announced a major strategic shift in the country's economic course after 48 years of party control.
Addressing the opening session of the 15th Congress of the Chinese Communist Party in Beijing, Mr Jiang gave the green light to tens of thousands of state enterprises to proceed with new forms of ownership which could lead to mass privatisation.
While this will mean laying off more workers, the gravity of a situation where three in 10 of the country's 124,000 state enterprises are losing money has clearly given the government no option but to hasten economic reform.
"We should make a strategic readjustment of the pattern of the state-owned sector of the economy," Mr Jiang told over 2,000 delegates, representing China's 58 million party members. Public ownership must be kept in the dominant position, but "it can and should take diversified forms". He singled out the joint stock system as "a form of capital organisation of modern enterprises which is favourable for separating ownership from management and raising the efficiency of the operation of enterprises and capital."
Public ownership would not be abandoned but redefined, he said. If a collective, for example, rather than the state held a majority shareholding, it would still be a form of public ownership. But enterprises "would operate independently according to the law, responsible for their own profits and losses."
Mr Jiang was telling party members in effect that the "iron rice bowl", the communist system where state enterprises looked after workers and their families, would become much smaller for the 110 million employed in the state sector.
Despite China's "five glorious years" since the last congress, the blunt truth is, Mr Jiang said, that "the quality and efficiency of the national economy as a whole remain fairly low" and "corruption, extravagance and waste and other undesirable phenomena are still spreading and growing".
To justify the heresy of delivering a pro-privatisation policy to a Communist Party gathering, Mr Jiang announced that the party constitution would be changed to establish that the pragmatic capitalist-style reforms of the late paramount leader, Deng Xiaoping, would be enshrined in the constitution as dogma.
At its foundation in 1921, the Communist Party took Marxism-Leninism as its guiding ideology, Mr Jiang said. At its seventh Congress, it adopted Mao Zedong Thought - combining Marxism-Leninism with the practice of the Chinese revolution. Now they would establish Deng Xiaoping Theory as the guiding ideology.
"We are faced with many hard issues we have never met before," said Mr Jiang, who predicted that it would be half a century before China was a modern, prosperous country, and a full century before socialism could be achieved. "Deng Xiaoping Theory requires us to emancipate our minds and seek truth from facts."
Acknowledging that the new measures "will cause temporary difficulties" to part of the workers, he said they had no alternative but to "quicken the pace in relaxing control over small state-owned enterprises and invigorating them by way of reorganisation, association, merger, leasing, contract operation, joint stock partnership or sell-off".
Because of the fear of social unrest from mass lay-offs, reform of some major Chinese enterprises may be delayed, observers at the congress predicted. The World Bank estimates that there are 20 million unemployed in China in urban areas, competing with twice that number of rural workers migrating to the cities. Despite fast growth, the economy has been unable to absorb the surplus.
Mr Jiang also warned the congress that rampant corruption could bring down the party. "The fight against corruption is a grave political struggle vital to the very existence of the party and the state," he said, without mentioning - though it was in everyone's mind - the expulsion and impending prosecution of a former politburo member, Mr Chen Xitong, the Beijing party leader, on corruption charges.
"Our party can never be daunted and vanquished by any enemy. But the easiest way to capture a fortress is from within, so in no way should we destroy ourselves," said Mr Jiang in a clear reference to Mr Chen. "If corruption cannot be punished effectively, our party will lose the support and confidence of the people. . ."