Collective Contracts in Chinese Enterprises: A New Brand of Collective Bargaining under ‘Market Socialism’?
| Author | Malcolm Warner,Ng Sek‐Hong |
| Date | 01 June 1999 |
| Published date | 01 June 1999 |
| DOI | http://doi.org/10.1111/1467-8543.00128 |
Collective Contracts in Chinese
Enterprises: A New Brand of Collective
Bargaining under `Market Socialism'?
Malcolm Warner and Ng Sek-Hong
Abstract
As China reforms its legislation and institutions to best ®t the requirements of
an emerging labour market, it has instituted both individual and collective
contracts in a range of industrial enterprises. We describe the `benchmarks'
against which such nascent Chinese collective bargaining may be compared,
followed by a detailed examination of contracts and the context in which they
are found. We conclude that collective contracts have been more widely
implemented in state-owned enterprises than in foreign-funded ones and that
such contracts may need to be made more `user-friendly' to the latter if they
are to become more generally adopted.
1. Background
Introduction
This article sets out to question whether the introduction of individual and
collective contracts in enterprises in the People's Republic of China (PRC)
heralds the arrival of what may be seen as `collective bargaining', and if so
whether on Western or Japanese lines. After describing the background of
labour±management relations, particularly vis a
Ávis the 1994 Labour Law
(laodong fa), it sets out appropriate `benchmarks' against which Chinese
collective contracts may be judged and considers the signi®cance of their
implementation. In this context it also discusses whether the Chinese
system of industrial relations is undergoing a fundamental change in its
nature.
Institutional and Political Background
Before turning to the prospects for collective bargaining in the PRC, we
Malcolm Warner is Professor and Fellow at Wolfson College and the Judge Institute of
Management Studies, University of Cambridge. Ng Sek-Hong is Reader in Management
Studies at the Hong Kong University Business School.
British Journal of Industrial Relations
37:2 June 1999 0007±1080 pp. 295±314
#Blackwell Publishers Ltd/London School of Economics 1999. Published by Blackwell Publishers Ltd,
108 Cowley Road, Oxford, OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA.
must ®rst outline the institutional and political context in which workplace
changes are taking place. After the death of Mao Zedong in 1976, a set of
fundamental reforms transformed Chinese society. Deng Xiaoping
embarked on the `Open Door' policy, which was to link the PRC with the
international community, particularly by boosting trade with the outside
world and launching the `Four Modernizations' (of agriculture, industry,
science and technology, and defence). A series of economic, ideological,
legal, political, social and other reforms followed, transforming China into
an increasingly market-driven but still nominally `socialist' state, run by the
Chinese Communist Party. We may contrast this with the former Soviet
Union, which embarked on a pluralistic path, albeit with limited results, in
both its economic and political domains (see Nolan 1995). Deng, until his
death in 1996, continued to pursue an essentially pragmatic ideology, unlike
his predecessor.
In 1978, state-owned enterprises in China produced over 80 per cent of
industrial output; now they contribute less than 30 per cent. Foreign capital
¯owed in on a massive scale, much of it from Greater China but sizeable
amounts also from the West and Japan, aimed at facilitating `technology
transfer' and more ef®cient management practices (see Warner 1986, 1992;
Child 1994). Although progress towards a more open form of market
socialism did not advance in a neat linear direction, by the late 1990s China
was being hailed as a potential economic and political `superpower' by the
International Monetary Fund, the World Bank and similar global institu-
tions.
At the workplace level, the enterprise reforms introduced in work-units
(danwei) have played an increasingly important role (see Child 1994;
Naughton 1996; Lu and Perry 1998). Firms have been given greater
autonomy; managers have acquired greater decision-making areas, parti-
cularly over key decisions, such as hiring and ®ring. As part and parcel of
the reforms that have re-constituted a form of `labour market' in China (see
Chan 1995; Zhu 1995; Ng and Warner 1998), the system of `lifetime
employment' called the `iron rice bowl' (tie fan wan) and its accompanying
labour immobility is currently being phased out (Warner 1999). Before the
present reforms, labour protection had been feeble, partly because the
nation's labour legislation (see Xia 1991; Korzec 1992; Josephs 1996;
Warner 1996) was weak in regulating minimum wages, working hours and
industrial safety. The labour administration had also side-stepped issues
such as the workers' right to strike and collective bargaining (Warner 1995:
33). It was not until 1994 that a new Labour Law appeared to clarify and
codify many of these issues, but even then the right to strike was not
reinstated. (It was removed from the Constitution in 1982, but had never
been much of a de facto reality.)
The introduction of individual labour contracts (geren hetong) has been
described extensively elsewhere (see e.g. Korzec 1992; Warner 1995) and
dates from experiments in the early 1980s (see Ng and Warner 1998). The
majority of Chinese urban industrial workers now have individual con-
#Blackwell Publishers Ltd/London School of Economics 1999.
296 British Journal of Industrial Relations
To continue reading
Request your trial