1. Introduction

What sort of industrial relations can be found in the Third Line Enterprises? To answer this question, this chapter makes a review of existing literature on Chinese state-owned enterprises’ (SOEs) management and further presents the theoretical framework of this book. In this chapter, the author argues that while facing workers’ rule-breaking behaviors, group leaders of the Third Line Enterprises do not usually punish them or report them to their senior managers. Instead, they are inclined to exhibit tolerance. The author also indicates that the group leaders’ toleration is an adaptive strategy cultivated by the factory’s densely interconnected social networks and the workers’ control on production lines in isolated areas.