Economic Reform and the Challenge of Transforming Labour Regulation in China

Abstract

The development of a new system of labour regulation is a central challenge in the People's Republic of China. Economic reform since 1978 has aimed at expanding market relations and replacing direct government administration at the enterprise level with enterprise autonomy orientated to market adjustment. This has placed enormous strains on the existing system of labour regulation. However, in contrast to the hectic pace of economic reform, alterations to the system of labour regulation have tended to remain limited and marked by uncertainty. This article offers a general overview of the challenge of transforming labour regulation in China. It examines labour regulation in terms of four dimensions: labour allocation, forms of employment status, wages and non-wage benefits, and management-labour relations (including worker representation). It outlines the pre-Reform system of enterprise regulation and labour regulation and then reviews the subsequent changes. It concludes by examining the on-going problems and dilemmas. It suggests that the most appropriate direction of change is towards a general, transparent and effective regime of labour regulation orientated to protection of vulnerable workers and encouragement of collective bargaining.