Chinese i r Experiments

8/17/2019 Chinese i r Experiments

1/46

Industrial relations experiments in China:

Balancing equity and efficiency the Chinese way

1 Michael H. Belzer Associate rofessor!ayne "tate #ni$ersity%etroit& MI& #"A

2 an "hih !ie Assistant rofessor Chinese Culture#ni$ersity 'aipei& 'aiwan

3

(u)an*ecturer +ilin #ni$ersity Business"chool Changchun& ,C

BE COME A SLOAN AFFILIATE h ttp :--www.slo an .o rg -p ro g rams-affiliates.sh tml


2/46

Industrial relations experiments in China:

Balancing euit! and e""icienc! the Chinese #a! Alfred . "loan oundation Industry "tudies Meeting

ar/ laza HotelBoston& MA

May 0& 0112

"ession: 34conomic restructuring and industrial relations5

Michael H. Belzer Associate rofessor& !ayne "tate #ni$ersity& %etroit& MI& #"A

an "hih !ei Assistant rofessor& Chinese Culture #ni$ersity& 'aipei& 'aiwan(u )an *ecturer& +ilin #ni$ersity Business "chool& Changchun& ,C

'he authors would li/e to ac/nowledge the research assistance of the students ofrofessor Belzer and %r. (u )an at +ilin #ni$ersity Business "chool: %uxiaolin&!ang!ei& 6u +iao7iao& 8ie ,ui& (ang Hailong& *ian 8in& 6ilei& 8u (ang& 6u +iao7iao&6in (i (uan& *i 8iu "heng& and 9hou Hai+uan and the students of rofessor an atChinese Culture #ni$ersity: Hsu Meng Chueh& (ao 'zu !ei& and Chiung (ing u.

!hile the Chinese li;eralized their economy and created a ;rand new la;or mar/et scarcely

fifteen years ago& they ha$e relied on their pre


3/46

on community union de$elopments in Changchun that are aimed at organizing employees of


4/46

small enterprises pre$iously considered outside the ;oundaries for Chinese la;or unions. !e

also discuss cases in other pro$inces in which local unions ha$e ta/en the initiati$e to organize

migrant wor/ers in a way that foreshadows changes in the Chinese legal corpus that we thin/

empowers unions to ta/e hitherto unheard of if not impermissi;le actions on ;ehalf of migrant

and otherwise dispossessed wor/ers. !e gi$e special attention to the extent to which

contingent la;or relationships ha$e grown in importance in China and to the challenge these

relationships present to unions responsi;le for maintaining harmonious wor/place relationships.

Certain changes in practice& including the new *a;or Contract *aw& may pro$ide a $ehicle with

which to de$elop a Chinese industrial relations system ;etter a;le to ;alance equity with

efficiency and achie$e the go$ernment=s goal of 3harmonious society5 >和谐社会 ) >8inhua

)ews Agency 011?@. !e find that incremental industrial relations reform continues to occur in

many areas of China& particularly where product and la;or mar/ets ha$e transformed

relationships ;etween wor/ers especially migrant peasant wor/ers >nongmingong & or

3farmers


5/46

mar/ets in particular to regulate China=s economic de$elopment. #nregulated mar/ets


6/46

tend to promote greater inequality as the consequences of li;eralization& deregulation& and

deinstitutionalization ripple out to la;or mar/ets >Belman and Belzer DDE@. Mar/ets may

o$erwhelm institutions >Belzer 0111@& and when the changing ;alance ;etween mar/ets and

institutions desta;ilizes& mar/ets may ;ecome the dominant institution go$erning social and

economic relations until the im;alance pro$o/es a socially and politically desta;ilizing ;ac/lash

from wor/ers >'aylor& Chang Fai& and *i 6i 011G@& a phenomenon that appears to concern the

Chinese go$ernment. Inequality in China has now reached the le$el of that in the #nited

"tates& which is far greater than that of most industrialized countries.

"tarting with the three o;7ecti$es of the employment relationship efficiency& equity& and

$oice >Budd 011@ we assess the effecti$eness of existing and de$eloping Chinese la;or

institutions. !e test the extent to which the industrial relations system is performing effecti$ely

;y loo/ing at the distri;ution of employment outcomes such as wages& ;enefits& and wor/ing

conditions. !e loo/ across se$eral sectors in the Chinese economy as well as se$eral forms

and structures of ownership& since outcomes appear to $ary across these dimensions much the

same as they $ary ;y industry& mar/et& and firm size elsewhere in mar/et)is;ett 011G@& something for which the tradition in China is

contro$ersial and perhaps e$en wea/. 'he 0&?11


7/46

Although we do not shrin/ from em;racing the I*J=s pluralist notion of $oice& we simply

are not sure whether we should consider it as important in China as the $ery

measura;le outcome of equity. Jn that score& China is not doing well and ;eing tied

with the #nited "tates for inequality is not an en$ia;le situation >Central Intelligence

Agency 011E;& 011Ea@ the #nited "tates leads the industrial world on that dimension.

In addition& we thin/ the "tate plays a stronger role& in Asia in general and China in

particular& than the pre$ailing industrial relations models pro$ide. In an Asian corporatist state

such as China& the "tate is not 7ust an honest ;ro/er ;ut also an acti$e agent with a su;stantial

property interest. 'he Chinese "tate continues to act as a ma7or in$estor& e$en as pri$atization

of go$ernment


8/46

institution in a structure in which the "tate itself may ha$e a property interest. In China& while the

"tate operates in the industrial relations en$ironment and plays an outsider role& it also acts as an

acti$e participant at all three le$els and therefore must ;e included as an acti$e participant.

inally& we assess the $alue systems operating at the core of the Chinese industrial

relations system. !hile Budd and others successfully introduce ;usiness ethics into

industrial relations >Budd 011 Bowie 011? !heeler 011? Budd and "co$ille 011?

Faufman 011?@& the ethical systems generally are western >"co$ille& *awler& and 8iang (i

011?@. !e see/ to understand Chinese industrial relations from a Chinese and

particularly Confucian and Mohist philosophical and ethical perspecti$e >*in Mousheng

D0 de Bary and 'u !eiming DDE 9hang %ainian 0110@.

'his perspecti$e requires the society to ;eha$e and the go$ernment to rule according to3hea$en=s will5 >Mozi >墨子@ 011@& acting in an ethical manner that rises a;o$e property sta/e<

holding and rules on ;ehalf of the common good. Indi$idual welfare depends on the state >and

the emperor@ acting with righteousness and not merely on ;ehalf of what we today might call

3special interests.5 !hile pro;lems of corruption per$ade Chinese society >"un (an 011@& it

;ecomes exceptionally important for a strong state to 3rule from hea$en5 ;ecause historically&

that has ;een the source of the emperor=s legitimacy >air;an/ DE2@. urther& not only did

MKngzL >a./.a. MKng 9L& Meng 'zu& and Mencius@& a Confucian moral scholar& emphasize the

importance of ruling from hea$en& he argued that the 3people were the litmus test for the

awesome mandate to rule from Hea$en.5 >+un7ie Huang 011@. 'he acti$e role of the "tate

therefore is qualitati$ely different from the western standard& which requires the "tate merely to

act as an honest ;ro/er ;etween pri$ate interests. In China& the "tate fundamentally has a

different relationship to its citizens.

!estern political theory& at least& would suggest that a lac/ of wor/er $oice would contri;ute

to growing economic inequality in a pluralist& competiti$e mar/et en$ironment& and that growing

inequality will contri;ute to social and political insta;ility. Jthers& nota;ly 'aylor& Chang and *i

>011G last chapter@& also point out that Chinese ha$e re$olted repeatedly and frequently

throughout Chinese history against unrequited demands for equity >as implied ;y the

3Hea$en sees with the eyes of its people. Hea$en hears with the ears of its people.5


9/46

perspecti$e of MKngzL a;o$e@& so it seems fair to hypothesize that a lac/ of equity and

$oice in China today will e$entually lead to insta;ility. !e therefore propose to test the

effecti$eness of the Chinese industrial relations system against this theory.

The shi"t "rom institutions to mar$etsMuch has ;een said a;out the decline of the state!arner 011 (i 9hang and

8i *i 011@& ;ut our research suggests that the state"axton 011?@0& e$en as its relati$e

share of the economy has declined. It generally is true that industrial relations structures and

strategies mirror the structure and strategy of any nation=s firms& and this is especially important

in China ;ecause the state has a propertyand their unions@

will fail to capture the important effects of state action. 'his has ;een especially true insofar as

the All China ederation of 'rade #nions >AC'#@& as well as its mem;er unions at all le$els&

has acted as an arm of the "tate and the arty.

ri$ate


10/46

D22@. Although the law is applica;le only to state0110@& China=s success has caught the attention of the world.

)ot only has China ;ecome a national 3factory5 that produces la;orsee 'a;le @ and this pace of

growth continues. Mar/et reforms ha$e gained momentum and it appears that there is no

way to return ;ac/ to the old days& characterized ;y a strict& rigid& state


11/46

/ind of ela;orate institutional framewor/ that de$eloped nations ha$e ;uilt o$er hundreds of years.

%e$eloped nations /now that their la;or relations systems should ;alance efficiency& equity& and

$oice >Budd 011@& channeling the energies and acti$ities of their entrepreneurial leaders while

maintaining a ;alance ;etween the counter$ailing rights and responsi;ilities of ;usiness leaders

and employees. %e$eloping nations li/e China need to pay special attention to these issues

;ecause the patterns of relationship ;etween wor/ers and managers are particularly new and

fragile class conflict can desta;ilize the country and damage the de$elopment process.

表一、中国实质 %&' 年均成长率 ()*+,-++.

Ta/le (0 China1s A2erage Annual 3eal %&' %ro#th 3ates4 ()*+,-++.

期间年均成长率

eriod A$erage Annual Browth ,ateD1改革开放前 pre


12/46

表二、中国劳!"劳#$%&' ())5,-++6

Ta/le -: 7or$ers In2ol2ed in La/or &isputes in China ())5(-++6

年 !")*$ 年均成 !"$%劳年均成长 !")*$%劳+,-

%劳+, 长率 +, 率 ./

(ear Collecti$e Annual All %isputes Annual !or/er in$ol$ement in%isputes rowth >wor/ers@ rowth collecti$e disputes >percent>wor/ers@

?,ate ,ate of all disputes@

DD ?0&GE EE&ED E.ENDD? EE&G1 .DN 00&?0 ?E.?N G.NDD D0&01G D.0N 2D&01 ?.N 2.2NDDE G0&E G.DN 00&? .DN 1.1NDD2 0?&02 2D.N G?2&?G 0.N E1.NDDD GD&0 0E.N EG&D?E G0.0N E.N0111 0?D&?


13/46

表8、劳3$%9:;< 1997-2003

Ta/le 6: Causes "or La/or &isputes ())8(-++6

年= $%> 劳37? @A 劳35B @A. CDEFG @A. HI> @A.

J+, 5KLM ./ NJO / P劳3QR / J /

NJO NJO NJO

(ear 'otal !age& NN@ *a;or NNO Change or NNO Jther NNOCases Insurance& rotection termination causes

Benefit of contract

DDE E&?0 &? ?E.? 0&0? G.0 2&EG 0. D&?1 G.0

DD2 DG&D ?&10 ??. &DG E. 01& 00. &?? ?.

DDD 01&D EG&?00 .0 E&201 .? 0D&12 0. D&0 E.E

0111 G?&01 EG&10 ?.1 G&112 D. G?&ED 0.? G&G2G D.D

#012 "ourceS

CDD2(011G年国T劳年中U3&' Zhong Guo Lau Dong Tong Ji Nien Jian& >China Labor

Statitic Annual Bulletin@V

T011G劳>3WXJ$长Y% 3*a;or %isputes Continue Browing.5Vin 中国劳3 4会社 5

67 Lau Dong Ji She Hui Bao Zhnag & China Labor and Social Security Ne!& March D& 011

T011 年 G Z D [V\>011@

inally& the industrial relations dispute resolution mechanism on which China has relied

with some success in past years appears to ;e failing. A system created more than fifteen

years ago as China was 7ust ;eginning to de$elop a la;or mar/et as well as a focus on theforeign direct in$estment that would propel its growth >allagher 0110@& la;or ar;itration was

a /ind of planning approach to mar/et de$elopment and reflected an internal struggle within

the Communist arty o$er the ;alance ;etween mar/et reforms and central planning

>+ohnston 0110@. As 'a;le shows& disputes su;7ected to the existing mediation and

ar;itration systems ha$e increased& ;ut the system has ;ecome less& rather than more

efficient. A rapidly growing num;er of disputes fail mediation and go to ar;itration& ;urdening

the system. !hile wor/ers win a ma7ority of these formal disputes& those who fail

increasingly turn to the courts. 'he ;urden on ;oth systems has increased while a system of

efficient industrial dispute resolution has ;een elusi$e >allagher and %ong BaoHua 0112@.


14/46

表]、())8(-++6 年^国劳3$%>J_`abcd

Ta/le 50 Methods o" La/or &ispute 3esolution ())8,-++6

年= e > + , fEe> Mediation ghe> Ar;itration H I a b Jther

NJO Methods

(ear 'otal )o. of ,i @A. ,i @A./ ,i @A.

Cases NJO / NJO NNO NJO /,esol$ed

)um;er NNO )um;er ercentage )um;er NNO

of Cases of Cases of Cases

DDE E1&ED0 G0&EDG .G ?&11 0.G 00&DGD G0.

DD2 D0&022 G&2G G. 0?&G2D 0E.? G?&?? G2.

DDD 0&02D GD&??1 G0. G&E0 02. E&10E G2.2

0111 G1&22 &2EE G0.1 ?&0 . G&D 0.

011 ?1&0ED 0&DGG 02. E0&0?1 2. G?&1D 0G.

0110 E2&E ?1&D0? 02.? EE&G1 G.G ?1&ED 02.0

011G 00&111 2&111 G1.G D&111 0.D 1&111 0.2

#012 "ourceS

1• DD2(011G 年T中国劳3&'年U Zhong Guo Lau Dong Tong Ji Nien Jian &

>China Labor Statitic Annual Bulletin@V

2• 011G =劳3$%>JYWX长j*a;or %isputes Continue rowing.5 In 中国劳34社会5 6

7 *au %ong +i "he Hui Bao 9hnag Bao& >China *a;or and "ocial "ecurity )ews@ 011

年 G Z D [\

Because almost all enterprises had ;een owned ;y the wor/ers= state& and since the

go$ernment considers it inappropriate and illegal for wor/ers to organize unions for

representation independent of the Communist arty that leads the wor/ers= state& China

only recently has had a reason to create collecti$e ;argaining institutions. As the initial

post


15/46

or half a decade& these two factions contested for power& with statist freenow /nown as the Ministry of *a;or

and "ocial "ecurity QMJ*""R@ was more closely tied to the planners& and tended to prefer

centralized institutions li/e ar;itration to decentralized institutions li/e unions might ;e. or these and

other reasons& the DD *a;or *aw was aimed at regulating la;or relations in mar/et


16/46

Committee of the )ational eople=s Congress 011@ were well suited& prompted ;oth increasing

wor/er unrest and the dramatic increase in ar;itration cases documented in 'a;le 0.

'his introduction of mar/et reforms& as well as entry into the !orld 'rade Jrganization

>!'J@& has made it necessary for China to reconsider this issue. !ith !'J pressures to

deregulate its industries and remo$e "tate protections& Chinese la;or relations ha$e

experienced new stresses. As "tateBar;oza 011 +iang +unlu 011E@& many companies had

exploited a loophole in the la;or law pro$isions for indi$idual contracts that allowed them to hire

wor/ers as indi$idual contractors with or without any employment relationship to them. #nder

this construct& employers ha$e ;egun using recruiting or 3dispatching5 firms that act as la;or

contractors& 3selling5 these wor/ers to employers who sign indi$idual commercial contracts

rather than la;or contracts these wor/ers& called 3dispatching wor/ers&5 ha$e neither an

employment relationship with the firm that dispatched them nor an employment relationship with

the firm that employed their la;or. 'he use of dispatched wor/ers has increased su;stantially in

recent years indeed& in one ma7or city& the use of dispatching wor/ers rose from 01N to 1N in

7ust the years from 0110


17/46

effecti$e +anuary & 0112. !hile it does not actually pro$ide for true collecti$e ;argaining and

the existing Collecti$e Agreement ,egulation >implemented in 011@ does not pro$ide for

westernMo*""@ could ;ase an opinion issued on August Eth 011& in a 7oint

statement with the AC'# and China 4nterprise Confederation-China 4nterprise %irectors

Association >C4C-C4%A& the employers= organization@& that promoted regional collecti$e

contract negotiation. In areas such as economic de$elopment zones& communities& streets& or

neigh;orhoods around which gather small and medium sized pri$ate firms& the Mo*""

encouraged unions and employers to negotiate regional collecti$e agreements. 'his is neither a

modification of the *a;or #nion *aw nor an in$itation for ad$ersarial la;orBrown 011@.

!hile 3collecti$e ;argaining5 clearly is different in China than it is in the west& ;y the

end of 011G there were E0&D11 collecti$e agreements in total& co$ering &0&111 firms

and 1G&?11&111 employees. Collecti$e ;argaining& conducted ;y affiliates of the All China

ederation of 'rade #nions >AC'#@& has resulted in wage agreements signed ;y 0DG&11

firms& co$ering G?&ED1&111 employees. Collecti$e agreements ha$e ;een reached on a

regional and industrial ;asis: G?&11 contracts ha$e ;een negotiated at a regional and

industrial le$el& co$ering E&E11 firms and G&&111 employees. As of the end of 011G&

se$enteen pro$inces had esta;lished related regional laws and regulations regardingcollecti$e ;argaining.

2 'he trend to engage in collecti$e ;argaining has shifted from 7ust

those at traditional state


18/46

the act of collecting written contracts together may ha$e farBrown 011@.

The Labor Contract Law: A New Era or Just More Duct Tape?

!ith change in the air& the Mo*"" announced a new legislation proposal in March 011

the *a;or Contract *aw and sought pu;lic opinion and comment for finelo;al *a;or "trategies 011& 011E International 'extile armentand *eather !or/ers= ederation 011 Fahn and Bar;oza 011E *ands;erg 011E@. 'he de;ate

was intense also within China& with leading la;or law experts ta/ing opposing $iews.

'he growth of mar/et relations o$er the last dozen years has exposed wea/nesses in this law

and the need for su;stantial modifications& as many new forms of employment such as

dispatching wor/ers with an unclear relationship to existing institutions had ;ecome common

throughout the country. 'he *a;or Contract *aw supercedes the old indi$idual contract pro$isions in

the *a;or *aw& although it does so ;y strengthening& rather than wea/ening& reliance on indi$idual

contracts& while adding a limited responsi;ility for collecti$e contract negotiation to the AC'#=s

portfolio. !hile it does not seem that the go$ernment is ready yet to cut the union loose to enforce

*a;or *aw directly& ;y gi$ing the union the responsi;ility of getting indi$idual contracts on paper

>something that the *a;or *aw already requires ;ut which often does not happen& particularly in

southern China@& employees and employers will ha$e to set


19/46

out terms and conditions of employment rights and o;ligations that comply with the law

and can ;e enforced ;y the ar;itration and court systems much more readily. 'he ultimate

purpose of this change in the legal framewor/ may ;e to put the ;ra/es on the race to the

;ottom resulting from li;eralized employment arrangements. 'he CC may ha$e concluded

that the growing anarchy in la;or mar/ets has gi$en too much power to employers and the

go$ernment needs to engage the AC'# in this effort to stop the growing inequality of

outcomes. Indeed& one section regulates dispatched wor/ers specifically.

'he current resolution of this de;ate is the result of an internal de;ate within the

AC'#. 'he AC'# legal department argued that from the legalistic point $iew& collecti$e

;argaining regulation should ;e separated from indi$idual la;or contracts. 'he AC'#

collecti$e ;argaining department has& on the other hand& the responsi;ility for ad$ancing

collecti$e ;argaining in union settings. 'he AC'# leadership decided to add collecti$e

contract clauses into this new *a;or Contract *aw for pragmatic reasons. #nion strength in

collecti$e ;argaining is still wea/ in China today& and neither la;or nor management can

e$aluate the relati$e success of collecti$e ;argaining so far. In addition& the *a;or %ispute

,esolution Act has not passed either& and decisions that must ;e made relati$e to this act

depend in part on the success of the *a;or Contract *aw& so e$aluation of its effecti$eness

has not ;egun.D )ew la;or laws& such as the *a;or %ispute ,esolution Act&

1 therefore

cannot ;e passed at least for the next few years& so the !estern way of ma/ing collecti$e

;argaining wor/ is not possi;le& at least under current conditions. 'he AC'#=s decision to

add a collecti$e ;argaining clause into the new law& therefore& is a pragmatic way to gi$e

the union more power to initiate collecti$e ;argaining in dealing with mar/et practices.

In sum& China=s concept of collecti$e ;argaining system is quite different from that in the

rest of the world& especially in de$eloped western countries. In practice& it is not ;ased on

$oluntary 3freedom of association5 ;ut neither does it ha$e a uni$ersal reach as a mere

transmission ;elt. 'he AC'# is an important element of the "tate and the Chairman of the

9 ersonal con$ersation with rofessor *iu Cheng& a professor of law at "hanghai )ormal#ni$ersity and a go$ernment la;or law ad$isor& on %ecem;er G& 011.

10 4$en though a *a;or %ispute Mediation and Ar;itration Act passed on %ec. 0D& 011E& to ;e promulgated on May &

0112& the ma7or function is to settle indi$idual contract disputes& not the union


20/46

as the second party in the mediation process.


21/46

AC'# also ser$es as $ice

Experiments an Inno!ations in "nion Acti!it#

Chinese la;or unions ha$e ;een attempting to deal with growing pro;lem of inequality and

inequity that the mar/et economy has produced. It may ;e fair to hypothesize that they really did

not /now what to expect when they shifted from planning to mar/ets& ;ut the steady drum;eat of

support for mar/ets coming from western economists and western+ingsu

ro$ince@ in 0111. 'his approach de$eloped ;ecause the local union leadership recognized

that migrant peasant wor/ers were not 7oining the enterprise unions ;ecause they had

done at their home address >Chinese consider their home towns to ;e the place where they

or their family& and their ancestors& originated@. 'hey ;egan to organize them into

3community unions5 and ;y +une 0111 they had spread the concept throughout the )an7ing

area. !uhan >Hu;ei ro$ince@ also recognized this pro;lem and followed quic/ly in

)an7ing=s footsteps. "henyang followed ;y 011 and the concept was ta/en up ;y the

union in Bei7ing as a means for organizing construction wor/ers >8in(iyang 011G@.

In Hu;ei ro$ince& ;y 011G the scope of the pro;lem had ;ecome clear and on )o$em;er

& the pro$incial go$ernment announced 3the implementation of eopleSs ,epu;lic of China


22/46

#nions *aw= in Hu;ei ro$ince5& which was a Hu;ei ro$ince supplement to the 'rade #nion

*aw of DD0& as appro$ed ;y the Hu;ei ro$ince eople=s Congress in DDG and amended in

0110. 'his law& one of the many precursors to the *a;or Contract *aw& strengthened the union=s

hand in dealing with the growing disorganization and e$en fragmentation of the wor/force

especially with the lac/ of organization of the nongmingong & which had led to their increased

exploitation. 'he new pro$incial law ga$e the union the authority to act as wor/ers=

representati$es& which was a ma7or policy shift that ga$e the unions the right to represent& the

right to ad$ocate on ;ehalf of wor/ers& and the right to sue on their ;ehalf if necessary. Another

important feature of the Hu;ei Model was that it prohi;ited ;osses and their family from ser$ing

as union officials& it shifted fee collection responsi;ility from the union to the tax ;ureau& and it

pro$ided security from discharge to union presidents >8in(iyang 011G@.

Another /ey inno$ation& or experiment& is the de$elopment of 3community unions.5

'hese are unionHead #nionof Chaoyang %istrict 011E 8in(iyang 011G Chen 8iaoyan and 9hang "hi;in 011E@.

inally& in a $ariant on the community union model& the unions in Changchun& +ilin

ro$ince& ;egan a program in 011 to professionalize their community union leaders.

,ecognizing that the community union leader=s 7o; is difficult and requires mature union officials

who ha$e experience and sufficient education to understand the law and organizational

concepts to ;e successful >*i 'ianding and Chen uming 011E *T *ei& *i +iangang& and "ang

!e 011E 011E@& the union in Changchun set out to hire union presidents and get them out onthe street to esta;lish unions across a range of small pri$ate enterprisese& mostly in the

restaurant industry& and employing migrant peasant wor/ers.


23/46

An Experiment to $ro%essionali&e "nion $resients in Chan'chun

"ome degree of uniformity to la;or standards has ;egun to emerge& ;eginning to change

the facts on the ground. Although wages ha$e impro$ed impro$ements seems to ;e quite

une$en. Bra/es ha$e ;een placed on o$ertime wor/ at the discretion of employers& more

guarantees ha$e ;ac/ed up the system of employee lea$e and ;rea/ time& social insurance and

pension contri;utions ;y the employer ha$e ;een enhanced& and wor/ers ha$e seen some

impro$ement in wor/ing conditions and fringe ;enefits.

!hile none of this is meant to claim

that China=s industrial relations pro;lems much less its pro;lems with freedom of speech and

association ha$e ;een sol$ed& they do represent concrete steps toward the de$elopment of a

functioning industrial relations system appropriate for a mar/et economy.

It also is important to understand that the Chinese ma/e changes one small step at a

time. ,ather than ;egin ;y passing a law and then determining whether the law achie$ed

the intended result& as we do ideally in the west& the Chinese tend to experiment with

practices that address percei$ed pro;lems and use these experiments to test the practices

that they later formalize in the law. 'his use of experiments is particularly important for the

de$elopment of la;or law in particular and industrial relations generally in China >allagher

011?@. As suggested a;o$e& this is consistent with an inducti$e approach to the world that is

$ery different than the deducti$e one that westerners use >)is;ett [email protected] +uly of 011?& Chaoyang %istrict in Changchun& in the northeast pro$ince of +ilin&

;egan an experiment to professionalize union presidents for small pri$ate enterprises& with

the exploration and su;sequent promotion of this concept ;y district #nion Chairman !ang.

'he pro7ect ;egan for the first time in 6inghe "treet. 6inghe "treet& which includes six

communities& is a famous restaurant ;usiness district in Changchun employing tens of

thousands of nongmingong & or peasant migrant wor/ers. Nongmingong are among the

most exploited wor/ers in China ;ecause they tend to ha$e limited literacy and extremely

limited ur;an s/ills& ha$e a $ery limited understanding of their rights& and wor/ in $ery low

paid ser$ice sector and construction 7o;s.

3Conditions on Collecti$e Bargaining in China.5 Briefing paper pro$ided to the authors during their $isit with

the %irector


24/46

'he union structure in Changchun also plays an important role. !hile the AC'#

and employees of mem;er unions are go$ernment employees& the hierarchy to which

they report is somewhat different from that of the rest of the go$ernment& creating a

parallel chain


25/46

and third& one 3organizer5 can ;e elected from among the employees to organize the wor/ers to


26/46

participate in union acti$ities >ifth "ession of the "e$enth )ational eopleSs Congress and

0th Meeting of the "tanding Committee of the )inth )ational eopleSs Congress 011@. 'he

law has no specific guidance regarding whether the union can hire professionals as presidents.

'he Changchun City union hired six persons as union president candidates from

among ?1 people who applied as the result of a local news story. Jnce hired& their 7o;

was to organize enterprises and wor/ers in a sector of firms employing fewer than 0?

wor/ers. 'heir employment was pro$isional for two months after which they would ;e

e$aluated ;y the district le$el union& followed ;y an election procedure held ;y the

!or/ers= Congress in that %istrict. 'he six selected union presidents were responsi;le

for all the union organizing and wor/er protection wor/ in 6inghe "treet. %uring their

first year& from +uly 011? to +uly 011& these six union presidents organized G1&111

wor/ers and their organizing efforts successfully reco$ered U11&111 in unpaid salaries.

In August of 011& the pro$incial union recognized the success of the 6inghe

experiment and decided to implement the same practice to the other streets of

Chaoyang %istrict. %uring 011& persons were recruited and deployed to eight

streets and one economic de$elopment zone to organize community unions. 'hey

successfully organized unions throughout that area and were elected as presidents of

ri$ate 4nterprise #nion Confederations& in charge of union wor/ for ;loc/s in

Chaoyang %istrict in which more than 0&111 small pri$ate enterprises are located.

In April of 011E& the +ilin pro$incial union decided to apply the Chaoyang practice to

the whole pro$ince. Implementing the plan made ;y the pro$incial union in 011E& the

medium


27/46

$ice


28/46

of the arty %i$ision there& helped outstanding employees of the restaurant to get

medical insurance and social security. According to him& the acti$ities of the union and

Communist arty are ma/ing this pri$ate enterprise=s organizational atmosphere $ery

good& and wor/ers li/e to wor/ hard ;ecause they are treated well ;y the enterprise

and ;ecause they ha$e de$eloped a sense of ;elonging to the enterprise.

u;lic recruitment is organized ;y the %istrict *e$el of the #nion >e.g. Chaoyang %istrict@ and

the presidents are deployed to the street or ;loc/ le$el union confederation as president

candidates their employment as union presidents ;ecomes formalized only after their e$aluation ;y

the union and election ;y wor/ers. 'heir salary is paid ;y three parties the pro$incial AC'#& the

Medium and "mall 4nterprises Bureau of +ilin ro$ince& and city


29/46

exists.

A ;ig outstanding pro;lem for all of the unions in China has ;een the fact that despite

the fact that they are entitled to two percent of all compensation remem;er that they

perform ;oth a representational and human resource function for the firm they ha$e ;een

chronically underallagher 011?@. Jne reason why the +ilin union

can afford to underta/e this massi$e organizing and representation effort is that the

pro$ince has agreed to assign responsi;ility for collection to the 'ax Bureau. 4$en when

there is no a local union& the 'ax Bureau will collect two percent of total pay as a union fee.

'his money is used as a de$elopment fund for organizing unions when the #nions are in

their organizing phase and used for administration once they ha$e ;een organized.

union mem;er card@ can go to the resident


30/46

for help.

At the same time the residents wor/ to protect wor/ers= rights& they ser$e the

interests of the enterprises too. or example& one resident of 6inghe "treet #nion

Confederation in Chaoyang %istrict made his own rule a;out how to ser$e the enterpriseswhen at the same time protecting the wor/ers he called it the 3i$e resences5 >klm @.

1. 'he resident has to ;e present when wor/ers and their ;osses ha$e conflicts.

2. 'he resident must ;e present when issues of non


31/46

the union& and at the same time persuade the owners ;y telling them the ;enefits

they get ;y supporting the union=s esta;lishment in their enterprise. Although union

organization does not necessarily need the employers= agreement according to the

#nion *aw& peaceful ways are preferred since harmonious society is the goal.

'he first preference of these residents is to persuade the owners of the enterprises using

soft ways to allow the unions to ;ecome organized. or example& when meeting $ery strong

resistance from an enterprise& a few residents 7oined together to in$ite the owner to drin/ tea

together& persuading the owner with collecti$e power >a tea house is an important meeting

space in China and ser$ed the same purpose in 'aiwan@. "ometimes they wait for good timing

to con$ert the owners= thin/ing. or example& one owner who went on a ;usiness trip to Bei7ing

for more than 01 days entrusted an employee V one new uni$ersity graduate V to ;e in

charge of the enterprise in his stead. 'he union resident made good use of this chance and

cooperated with this employee to de$elop a "uggestion Box for the wor/ers in this enterprise.

!hen the owner returned he found that the wor/ers had ;ecome $ery energetic and

enthusiastic a;out the company. 'he owner changed his mind when his su;stitute manager told

him that this new attitude was one of the ;enefits of the union organizing.

'o attract wor/ers to ;ecome union mem;ers and also help them ease their li$ing&

discounted ser$ice functions are added to the reen Card& much li/e the #nion Ad$antage

Card in the #.". #nion mem;ers can en7oy discounted medical ser$ices& haircut ser$ice&

or shower ser$ice 7ust ;y showing their cards. i$e hospitals ha$e now agreed to pro$ide

01N < G1N discounts on medical ser$ices to union mem;ers. Medical or health insurance&

howe$er& is ;eyond the reach of unions and wor/ers at this le$el.

In sum4 #hat did union organi=ing achie2e in Chao!ang &istrict;

'he union tac/led the pro;lems of wor/ers protection in the pri$ate enterprises.

'he union identified itself as the institution that can really protect wor/ers it addressed

wor/ers= fear of losing 7o;s if conflict arises with the ;oss ;ut it still is not capa;le of

protecting wor/ers if their human capital characteristics are insufficient.

Between August 011? and March of 011E& G1&111 union mem;ers in ?11 small pri$ate

enterprises 7oined the union in Chaoyang %istrict. By the end of +une 011E& in Chaoyang %istrict

unions had ;een esta;lished in nearly DEN of non


32/46

employees had 7oined the union. In addition& the two indicators mentioned a;o$e had ;een

;oth 11N in the smaller nonwhich is $ery usual in restaurant industry@

Inter$iew with resident of a leading "treet #nion.

?In Changchun& the standard is U?1 per month& ;ut these firms were only paying U?11 or U??1.


33/46

16 )otes from union meeting on April 2& 0112.


34/46

to 1N. "ince the ;eginning of 011E& in the le$el of small pri$ate enterprises& union

confederation tripartite consultation systems and procedures ha$e ;een set up and

impro$ed step ;y step& standardizing the preparation process for starting the !or/ers=

Congress and the equal consultation procedure that de$elops the terms and conditions to

include in collecti$e contracts. In addition& the unions standardized the equal mediation

process and the content of the mediation ;efore signing the collecti$e contracts. 'he rate of

;oth ;uilding systems and signing collecti$e contracts has reached 11N.

"tarting in 011E& the union researched issues in$ol$ed in the !or/er=s Congress at the le$el of

the #nion Confederation of "mall )oni.e. a collecti$e !or/er=s Congress for

pri$ate enterprise@ as well as larger non


35/46

!ith all this success& the Community #nion still faces some challenges. 'he qualities

of the people dedication& enthusiasm& integrity& and commitment to impro$ing the wor/ing

and li$ing conditions of migrant peasant wor/ers is a crucial $aria;le. reat people can

use these institutions to achie$e success& while less inspired people who do not put

forward the effort tend to ;e less successful. Controlling for these indi$idual factors&

howe$er& the professional presidents in all districts appear to ;e performing ;etter than did

some of the traditional union people in their hierarchiesE

. 'he enthusiasm and capa;ilities

of the Chaoyang district staff ha$e ;een critical factor ma/ing this model successful. 'he

;iggest challenge they now face is trying to organize collecti$e negotiations among these

small firms& which would ;e the ;asis for collecti$e contracts. "alaries remain low&

particularly in $iew of their responsi;ilities and wor/load.

Conclusion

Chinese industrial relations is important to #" wor/ers employed ;y industries that

compete with the Chinese& including #"


36/46

18 http:--www.acftu.org.cn-& accessed on April ?& 011E.


37/46

;oth of the role of the trade union mo$ement in earlier stages of the Chinese re$olution

>going ;ac/ to the general 3nationalist5 era ;efore the open conflict ;etween the

Chinese Communist arty and the Fuomintang Qor uomindang eople=s artyRD

@ and

of the role of the trade unions in China since DD. Many scholars and officials would

li/e to see the AC'# transformed into a more independent organization for wor/er

interest representation >'aylor 0111@& ;ut insufficient understanding of the process and

consequences of such a change holds them ;ac/. ,ecent de$elopments pro$ide

e$idence of their serious interest in modifying employment and la;or law& ;ut

modification has de$eloped incrementally to a$oid social and political desta;ilization.

'he other dimension we see is the transformation of the union. 4$en though from a macro

perspecti$e the trade union itself is still under the control of the CC& efforts such as these to see/

alternati$e approaches that re


38/46

which the small firms with fewer than 0? employees gather..


39/46

go$ernment. In this case& the union claims that it is helping the community


40/46

Figure (: ())) Industrial Enterprises /! O#nership Structure >in hundreds?"ource: China "tatistical (ear;oo/& )ational Bureau of "tatistics

Jthers& D2 "tate Jwned 4nterprises& IG

oreign In$ested 4nterprises& 0G

Collecti$ely Jwned 4nterprises&

ri$ately Jwned 4nterprises& &?20&02

'ownship and Xillage

"toc/ Holding 4nterprises& 0 4nterprises& 01E&1D1


41/46

Figure -: Fractional Change in Num/er o" Enterprises /! Structural Form4 ())5,()))"ource: China "tatistical (ear;oo/& )ational Bureau of "tatistics

0?1N

011N

?1N

11N

?1N

1N


42/46

(e%erences

China *a;or "tatistics Annual Bulletin >中国劳3&'年U 9hong uo *au %ong

'ong +i )ien +ian@. Bei7ing: Ministry of *a;or and "ocial "ecurity.0110. OChina& A ,ising lo;al actoryO. eople=s %aily& )o$em;er 0& 0110.

011G. *a;or and "ocial "ecurity Annual ,eport >*au %ong +i "he Hui Bao 9hnag )ien

Bao 劳 34社会56年7 @. Bei7ing: Ministry of *a;or and "ocial "ecurity.

011. 6ingdao #nion: inno$ate the union organizing and impro$e the le$el of unionorganization ;uilding >nop+会Sqrs会tb uvwx*yz{|}会~•

s€‚@. 6ingdao& "handong ro$ince& .,. China: "handong ro$ince #nion.011?. O*etSs protect migrant wor/ersO. China %aily& April & 011?.011E. Handan correctly training primary la;orƒ„开…†‡会ˆ‰

Š‹Œ @: eneral Jffice of China ederation of 'rade #nions.

011. O*a;or %isputes Continue rowing 劳3$%>JYWX长.O China *a;or and"ocial "ecurity )ews N中国劳34社会567 *au %ong +i "he Hui Bao

9hnagO& March D& 011. American Cham;er of Commerce in "hanghai >AmCham@. 011. Comments and "uggestions

on ,e$isions to *a;or Contract *aw: American Cham;er of Commerce in "hanghai&.

Bae/ "eung !oo/. 0111. O'he Changing 'rade #nions in China.O +ournal ofContemporary Asia Xol.G1& )o.:pp


43/46

Intelligence Agency.


44/46

Chen 8iaoyan& and 9hang "hi;in. 011E. O'he rotection of Migrant *a;or ,ights;y "hi +iazhuang 'rade #nionO. *a;or %aily& April D.

de Bary& !illiam 'heodore& and 'u !eiming& eds. DDE. Confucianism and Human,ights. )ew (or/: Colum;ia #ni$ersity ress.

air;an/& +ohn F. DE2. 'he ChSin and Han 4mpires 00 B.C. to 001 A.%.

4dited ;y %. 'witchett and +. F. air;an/. ? $ols. Xol. & 'heCam;ridge History of China. Cam;ridge: Cam;ridge #ni$ersity ress.ifth "ession of the "e$enth )ational eopleSs Congress& and 0th Meeting of the "tanding

Committee of the )inth )ational eopleSs Congress. 011. 'rade #nion *aw of theeopleSs ,epu;lic of China. In Administrati$e *aw and "ocial *aw. China: *aw ress.

razier& Mar/ !. 0110. 'he ma/ing of the Chinese industrial wor/place: state&re$olution& and la;or management. Qelectronic resourceR ed. Cam;ridge& #F )ew (or/: Cam;ridge #ni$ersity ress.

rench& Howard !. 011E. O,eports of orced *a;or #nsettle ChinaO. )ew (or/ 'imes&+une & 011E.

allagher& Mary 4. 0110. OO,eform and JpennessO: !hy ChinaSs 4conomic

,eforms Ha$e %elayed %emocracy.O !orld olitics Xol.?& )o.G:pp GG2中国Ž7道@& Xol.G& Issue& )o.?:pp 0E


45/46

Introduction to Collecti$e Bargaining and Industrial ,elations. ed. )ew(or/: Mcraw^

‘’ “”s€9–—˜@O. "ichuan !or/erSs %aily& March G& 011E.*in Mousheng. D0. Men and Ideas: An Informal History of Chinese olitical

'hought. )ew (or/: +ohn %ay Company.*T *ei& *i +iangang& and "ang !e. 011E. OCarry out la;or™š›9…œ&w会@O. *iaocheng %aily& March D.Mair& Xictor H. DD2. OIntroductionO. In !andering on the !ay: 4arly 'aoist 'ales and ara;les

of Chuang 'zu: #ni$ersity of HawaiSi ress. Jriginal edition& DD& Bantam Boo/s.

Morrison& !ayne M. 011. China=s 4conomic Conditions. In C," ,eport for Congress. Mozi

>墨子@. 011. Mozi. 'ranslated ;y !ang ,ongpei and !ang Hong. ed. 0 $ols. Xol.

>;oo/s latimes.com@& +une & 011E.

)is;ett& ,ichard 4. 011G. 'he eography of 'hought: How Asians and!esterners 'hin/ %ifferently...and !hy. )ew (or/: ree ress.

an "hih

VVV. 011. lo;alization and 'rade #nion olicy in 'aiwan: A Balance ;etween 4conomic4fficiency and "ocial 4quity. In International Conference on *a;or ,elations and *a;or

"tandards under lo;alization. ,enmin #ni$ersity& Bei7ing& ,C."axton& +im. 011?. J$er$iew of the Chinese 4conomy: +oint 4conomic Committee

#nited "tates Congress."co$ille& +ames .& +ohn +. *awler& and 8iang (i. 011?. O)on

ramewor/s: Implications for Human ,esources and Industrial ,elationsO. In'he 4thics of Human ,esources and Industrial ,elations& edited ;y +. !. Buddand +. . "co$ille. Champaign: *a;or and 4mployment ,elations Association.

"tanding Committee of the )ational eople=s Congress. D22. *aw of the ,C ofIndustrial 4nterprises Jwned ;y the !hole eople.

VVV. DD. *a;our *aw of the eople=s ,epu;lic of China.VVV. 011. O*a;or *aw of the eopleSs ,epu;lic of ChinaO. In 4conomic *aw.

China: *aw ress."un (an. 011. Corruption and Mar/et in Contemporary China. Ithaca& )(: Cornell

#ni$ersity ress.'aylor& Bill. 0111. O'rade unions and social capital in transitional communist states: 'he

case of China.O olicy "ciences Xol.GG& )o.G&:pp G ff.'aylor& Bill& Chang Fai& and *i 6i. 011G. Industrial ,elations in China.

Cheltenham& #F )orthampton& MA: 4dward 4lgar.#" China Business Council. 011. Comments on the %raft *a;or Contract *aw of the eopleSs


46/46

,epu;lic of China >%raft of March 01& 011@: #" China Business Council.

VVV. 011E. Comments on the %raft eopleSs ,epu;lic of China *aw on4mployment Contracts >%raft of %ecem;er 0& 011@.

!arner& Malcolm. 011. OHuman resource management in China re$isited: introduction.OInternational +ournal of Human ,esource Management Xol.?& )o.:pp EG.

!heeler& Hoyt ). 011?. Olo;alization and Business 4thics in Industrial ,elationsO. In'he 4thics of Human ,esources and Industrial ,elations& edited ;y +. !. Buddand +. . "co$ille. Champaign: *a;or and 4mployment ,elations Association.

8inhua )ews Agency. 011?. OBuilding harmonious society crucial for ChinaSsprogress: HuO. eopleSs %aily Jnline& +une 0E& 0.

8in(iyang. 011G. OBuilding easant !or/ers= #nions.O Ban (ue 'an Xol.:pp.(i 9hang& and 8i *i. 011. OXolume& Issue Jwnership "tructure and Corporate

%i$ersification.O Business and olitics Xol.2& )o.:pp.9hang %ainian. 0110. Fey Concepts in Chinese hilosophy. 'ranslated ;y 4. ,yden. Bei7ing&

)ew Ha$en& and *ondon: oreign *anguages ress and (ale #ni$ersity ress.

Chinese i r Experiments

Documents

Transcript of Chinese i r Experiments