Labour Market Developments

This chapter focuses upon labour market developments during China’s transition to a market economy. It is suggested that the rationalization of state enterprises and the continued transfer of labour from rural to urban areas, will be the major features shaping China’s labour market development The former will result in increased urban unemployment and the loss of traditional benefits to urban workers, while the latter will add to job pressure in urban labour markets. These suggest the prospect of major social unrest Several barriers remain to the operation of a flexible labour market, and changes to basic labour institutions will be required. In particular, the transition to a market economy will require industrial relations and trade union institutions appropriate to a market economy. However, reform in these areas has not been successful to date due to the retention by the central government of tight political control