Comparative Labor Relations, A Focus on China

Why is China and its LR so important?

• China is a major global economic and military power

• It is a key part of many MNCs’ supply chains

• Its economy has undergone major restructuring and has shifted toward a market form

• China has both growing markets and persistent dominance by the Communist Party

Describe China’s old LR system

• One official union: ACFTU (All-China Federation of Trade Unions)

  • LR and unions are state/party dominated – union officials are party officials, little real CB

• Iron Rice Bowl

• Highly regulated internal migration → severe discrimination of urban migrants

Describe the Iron Rice Bowl

• System of very little pay differentiation (little performance pay; limited skill-based variation)

• Lifetime job security (guaranteed work, wouldn’t be laid off)

• Benefits provided by the firm: housing allowance, food allowance, medical care/insurance

What is the Hukou system

• Movement required official permission/registration

• Had to apply for government permission to move

• Migration increased over time, including “illegal” migration

• Migrants’ children face unequal access to education/services if not properly registered

What are some emerging changes in LR

• State sector shrinking with massive layoffs & uneven adoption of more flexible labor practices within the remaining state enterprises

• MNC sector is growing: Higher wages, more flexible/modern work & managerial practices

• Labor mobility (migration) restrictions relaxed but not gone

• Much conflict at the plant level

• Labor law reforms 7 years ago

  • focus on ind. rights → unevenly enforced

• Limited real CB: national gov fears it will be a channel for political mobilization

• Cases of fake CB

• Recent crackdown on labor activists and NGOs

• Emerging trade war w US