China’s Trade Unions and Management

Why study Chinese trade unions and their role vis-a-vis management? There are several possible answers to this question. First, the Chinese economy is not only currently the fastest growing in the world but may also soon to gain economic ‘superpower’ status (Lardy, 1994).1 Second, China has the world’s largest industrial and aggregate labour force (Nolan, 1995). Third, it also has the largest trade union organization found in a single country (Warner, 1995). Fourth, since the demise of the former Soviet Union, it remains the last major example of a Leninist ‘transmission-belt’ model of trade unionism (Chan, 1995). There are no doubt many other reasons that could be adduced to study this phenomenon: we shall return to these later.

The organized labour movement in China had come into existence prior to the establishment of the Communist Party in 1921 and unions had been active even before the turn of the century (see Chesneaux, 1969). As industrialization had been confined to the coastal areas and especially the large cities such as Canton (now Guangzhou), Hong Kong, Shanghai and Tientsin (now Tianjin), it is not surprising that the early workers’ organizations had started their life there (see Guillermaz, 1972; Chan 1981; Chen 1985 for further details).In China, the formal national union structure goes back to the early 1920s (see Littler and Lockett, 1983) with the setting up of the All-China Federation of Trade Unions (ACFTU) in 1925 in Canton.

As we have seen in the previous chapter, the legacy of the past weighs very heavily on the present strategy and structure of Chinese trade unions. Therefore, the direction and shape of the ACFTU cannot be fully seen in isolation from its origins and historical context, the most recent, post-1949 background having been set out in detail in Chapter 2. The historical dimension is built into not only their strategic goals but also their structure and function.¹ As Leung (1988) observes: The current function and importance of Chinese trade unions can only be understood in the context of the development of the Chinese labour movement. Trade unions evolved in the midst of the immense social upheavals which shaped modern China.

Many of the crucial reforms of Chinese labour legislation relevant to the role of trade unions and management prior to the 1994 Law were introduced in the 1980s (see for, example, Josephs, 1988; 1990; 1995; 1996, Zheng, 1989).1 About one-third (over 600 laws) were implemented in between 1978–88 (Xia, 1991, p. 36). Often, laws were tentative and inadequate (for the Chinese legal background see Dicks, 1989; Potter, 1994; Tanner, 1994). The legislation has been described as ‘an aggregation of all existing labour regulations’ (Korzec, 1992, p. 6). Discussion among Chinese legal experts reveals a growing dissatisfaction with ‘semi-law’: the absence of proper codification of administrative law and administrative procedure law in the People’s Republic of China (Xia, 1991, p. 7). Labour legislation in the PRC was in the past paradoxically weak, given the repeated claim that the workers were ‘masters of the country’, with the system mainly protecting workers in SOEs, as noted in Chapter 1 (see Xia, 1991; Korzec, 1992; Leung, 1993; Warner, 1996a).

As has been made clear earlier, Chinese trade unions largely represent workers in the state-owned sector (and related urban collective enterprises) as opposed to the other parts of the economy. Given the nature of the relatively recent industrialization of the economy, this description is not surprising. There has been a significant institutional time lag, thus causing the official representational bodies to be currently out of ‘synch’ with the most recent structural changes in the economy and labour force. Given the latest phase of the economic reforms since the early 1990s (see Table 5.1), we shall argue that even in the state-sector there is a management- union ‘crisis’ in the making. The primacy of the state-sector cannot be underplayed in the context of union power in the PRC. State-owned enterprises (‘owned by the whole People’, in the official jargon) have long been the main pillars of Chinese industry.

Foreign capital has re-entered China for almost 20 years now, since it was admitted in the late 1970s when Deng Xiaoping launched the ambitious ‘Four Modernizations’ and opened up the economy through the ‘Open Door’ policy to investment by sources from outside the country. In retrospect, the foreign-funded enterprises, including the joint ventures (JVs), have been a pioneering force not only on the frontier of productivity and technological innovations (see Vogel, 1991) but also in managerial and labour reforms for a China now in search of a new realm of ‘market socialism’. After these years of experiments to advance ‘socialism with Chinese characteristics’, the question worth investigating is whether the once ‘enclaved’ practices adopted in these foreign-owned enterprises will be increasingly emulated by their ‘native’ counterparts in the state-owned sector, now in a vigorous process of restructuring and rationalization, as suggested by the thesis of ‘institutional convergence’ brought about by the unifying imperative of ‘industrialism’.

This chapter sets out to sketch a profile of trade unionism as it has evolved in three predominantly overseas Chinese societies in East Asia, located on the fringe of the Mainland, in what has sometimes been called ‘Greater China’ and sharing basic Chinese values (see Bond, 1986; Bond and Hwang, 1986; Shenkar and Ronen, 1987; Lockett, 1988; Whitley, 1990). They are namely, Hong Kong, Singapore and Taiwan. Each of these three societies has captured the world’s attention as a case of successful industrialization within the regional league of the East Asian newly industrialized economies (NIEs) (see Redding, 1990). Their industrial experiences of organized labour provide an interesting comparison to what has been documented in the preceding chapters about the labour movement in the PRC, as canvassed from either a historical or a contemporary perspective.Such a comparative glimpse on trade unionism in these four societies(including the Mainland) is hoped to reveal some preliminary evidence onfirst, the propensity of Chinese trade unionism towards a ollaborative stance, vis-a-vis an adversarial one, in approaching management and employers in the workplace; and second, its aptitude, within the labour movement itself, for ‘unitary’ or alternatively ‘pluralistic’ unionism within a ‘corporatist’ contest.

By the year 2000, it will be just over 50 years since the CCP took power in China and founded the People’s Republic (see Fairbank, 1987). In these five decades, its economy will have changed out of all recognition, from a state of backwardness to one closer to an ‘economic super-power’ (see World Bank, 1990; 1993; Lardy, 1994). We must not exaggerate or extrapolate these trends unduly, but even so, China has become: a major participant in the world economy. It is virtually certain to become even more important because of its size, dynamic economic growth, and continuing policy reforms. Yet there is relatively little understanding of many of the fundamental elements of China’s emergence, ranging from the actual magnitude of its economy to the extentof its openness to external influences.