Changing China

‘China changes rapidly’ is an often heard catchphrase in the field. It has become the mantra of some of those who are skeptical of initiatives striving to improve working conditions in Chinese factories. Supposedly, China is undergoing fast reforms which should lead to better wages and mature industrial relations anyhow. So why bother?

Let’s look briefly into some of the changes that are said to be underway:

  • At national level, a law change is anticipated which will stipulate how an employee representative council can be set up at company level. These would be a platform to facilitate worker representation at factory level. The council should be able to co-exist with existing enterprise level unions. It is not clear if the law will specify how company level unions and representative councils would relate to each other, and if / how they could complement.
  • In Guangdong a draft law on democratic management of enterprises is currently being presented to the public for feedback. The draft text stipulates that a company is obliged to engage in collective bargaining on wages if this is requested by at least a third of the company workforce. If the employer would not respond to this request within 15 days or does not provide appropriate conditions and information for the bargaining process, a strike is legally allowed. In case the employer obstructs the bargaining process, which triggers workers to initiate a strike or work slowdown, that the employer would need to refrain from terminating striking employees. Interestingly, the coin has two sides. After the right to strike was taken out of the Chinese constitution in 1982, this would be the first time to provide striking workers with legal protection. Simultaneously there would be no legal space for workers to strike during bargaining processes.
  • It is expected that the ACFTU will start requiring companies to pay union fees for subscribed workers (equivalent to 2% of the company’s payroll) to the local tax bureau. Presently, this money is disbursed into a separate bank account which a company has reserved for its union. The law change would increase governmental grip on union finances. Also, the union made public that it is considering plans to have the salary of the union chairman paid directly by the ACFTU rather than the company. This would happen to ensure independence from companies. No clear path towards implementation on these ideas was announced.

The above points out that many law changes are indeed underway. However, it is not sure to what extent new law texts will contribute to a system of more mature industrial relations. Will collective bargaining actually be possible in the near future, or will the government take even firmer control of China’s labour market?

Even if we could speak of good intentions, one wonders what results they will lead to. From the Labour Contract Law that was passed in 2008, we have learned that law amendments are one thing, and implementation is another. Legislative reform processes should not be mistaken for guarantees that quick changes will happen for workers in factories.

If you have questions or comments regarding the above, please contact Ivo Spauwen – spauwen (a)

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