China+April+7 - Employment Relations in China April 7, 2011...

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Unformatted text preview: Employment Relations in China April 7, 2011 1 China: What Do You Know? Economy? Labor Force? Still a communist country? S ource : IMF S ource : IMF S ource : IMF China’s Expanding International Trade (trade as % of GDP) 70. 00% 60. 00% 50. 00% 40. 00% 30. 00% 20. 00% 10. 00% 0. 00% S ource : China S ta tis tica l Bure a u China’s FDI Inflows Development of China’s Foreign Trade by FIES US Trade with China US-China Trade (1985-2007) 300,000.00 US Trade with China (M.USD) 200,000.00 Exports Imports Balance 100,000.00 0.00 1985 1990 1995 2000 -100,000.00 -200,000.00 -300,000.00 Year S ource : US Ce ns us Bure a u 2005 2010 The Impact of Globalization on China Economic growth: annual GDP growth rate 9.7% since 1978; the world’s second largest economy (in GDP PPP) and third largest trader, and the largest recipient of foreign direct investment Poverty reduction: the number of people living on $1 or less a day dropped from 634million in 1981 to 212million in 2001. The proportion of people living under such poverty line decreased from 63.8% in 1981 to 16.6% in 2001 Growing middle class: 170 cities of over 1 million people, 600 million subscribers to wireless phone services, the largest on-line population, and buys over 12% of the world’s luxury goods. Huge foreign exchange reserves, about US $ 2 trillion. China is the largest US debt owner. The Impact of Globalization on China (cont.) Growing income inequality: Gini coefficient rose from 0.2 in 1980 to 0.47 in 2007 (the same as the US) Sweatshop factories: migrant workers routinely work 12 hours a day, 7 days a week; during the busy season a 13to 15-hour day is not uncommon; for a $80 Nike sneaker, Chinese workers only earn 60-80 cents (and Chinese contractors only earn marginal profits while the rest of the profits go to Nike and retail stores such as Walmart) Environment damage: China overtook US as the world’s largest greenhouse gas emitter in 2006; about 60 percent of China’s major rivers are classified as being unsuitable for human contact; air pollution alone claims 300,000 lives prematurely per year. Overview of China’s Political System Source : Schle vogt (2000) Chinese Communist Party (CCP) Single Party with one legislative house; CCP controls the Single parliament, all the law making, and other important decisions; CCP controls the government at all levels of hierarchy – CCP central, provincial & municipal; it is difficult to separate CCP from the government CCP Independent Government institutions do not really exist Independent in China – Judiciary, Army and Executive are all under CCP control CCP CCP is the all powerful entity in China – 58 million CCP members members President is the head of CCP, Government, and the Army President – CCP thus has overall control CCP The Authoritarian regime is still stable! S ource : P e w Re s e a rch Globa l Attitude s P roje ct J uly 2007 Interests of the State – continued survival of dominant interests dominant Ultimately Ultimately i.e. those in power want to stay in power For IR this means desire for For ‘stability’ Thus change initiated in 1970s, meant to create Economic transition (to market regulation) Social transformation (to urban modernism) Keep labor a stable force stable Employers: State-Owned Enterprises and Collective-Owned Enterprises The Danwei (work unit) system: including SOEs and COEs SOEs under control of State planning committee, industrial SOEs bureau, military or provincial/ city/ local governments bureau, Workers in SOEs were the ‘elite’ of the working class (better Workers provisions, etc) provisions, COEs: From small ‘shops’ to large factories COEs: ‘Societies in miniature ’: state allocation of jobs, lifetime employment, cradle-to-grade welfare, little labor mobility due to Hukou (household registration) and Dang’an (personal dossier) Non-existence of “HRM”: labor and wage department, personnel department, no Western style labor-management relations Three Irons SOEs and Privatization SOEs In 1990s, some SOEs contracted to their managers In for a fee for 1999 announcement of mass privatization New forms of ownership recognized Reason: to reduce burden to state To make them more competitive (more market orientated) Labor consequences of restructuring and “buying out” Labor state workers’ service state But state maintains 1000s under its control: large But SOEs, strategic importance SOEs, Rising nationalism: the Carlyle Group’s failure of failure buying XCMG in 2007 buying Growth of Private Sector Growth Initially meant as a supplement Became the major environmental pressure for change Became in the system in Stimulated market (e.g. changes in banking) Became new revenue source for Became Public sector organs ‘grey’ money for cadres Now, an integral part of a ‘mixed’ economy Now, employing the majority of Chinese workforce employing Foreign Invested Enterprises Government introduced FIEs early in reform Aim to boost technology Insisted on joint-venture arrangements Thus, management constrained by Chinese partner Statistically irrelevant But – But First official form of non-public enterprise since reform Meant to be window to modernization Meant Technology transfer Hard Soft But US technology transfer restrictions Mistrust by many foreign firms after early problems Mistrust with investments with Chinese Workers Types of Workers Images of Chinese workers Based on household registration: rural vs. urban, local vs. migrants Based on ownership: SOEs, COEs, POEs, TVEs, FIEs, IOBs (individual-owned businesses) Government and state monopoly sector, and a few large Western FIEs pay the best Laid-off and Unemployed Urban Workers Smashing the “iron rice bowl” since the 1990s: various forms Types of laid-off workers ‘Survivors’: more confident and better educated workers ‘The Worried Young’: distressed young workers with few coping resources ‘The Discouraged Old’: older workers with less education looking toward retirement Migrant Workers The fundamental institutional sources of “migrant workers”: the household registration system, rural-urban differences Poorly educated, low skilled, vulnerable in the labor market, discriminated in the cities, lack of citizenship Second generation of migrant workers: more aware of their rights, more assertive and militant ...
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