Human Resource Management in Developing Countries

The People’s Republic of China (hereafter referred to as the PRC) recently celebrated its fiftieth birthday in 1999. Its growth over the period since the ‘Liberation’, when the Communists took over the mainland in 1949, has by any account been impressive. After the Civil War and Japanese occupation, China was in a dire state; grinding agricultural and urban poverty were the norm. Mao Zedong set out to ‘modernize’ China, with Soviet aid for a while, building on a relatively small urban industrial base, with a labour force largely composed of illiterate and uneducated peasants (see Naughton, 1995). It was a colossal exercise in ‘mass mobilization’ or ‘people-management’ on a scale hitherto not undertaken. The way the Chinese went about it colours the description of how human resources are managed in the People’s Republic.

First, we will sketch out some basic statistics about China. It is a big country, with 22 per cent of the world’s population but only 7 per cent of its land surface. It has a population of over 1.2 billion people (expected to rise to 1.6 billion by 2050), with a life expectancy of 71 years, with literacy over 80 per cent. The PRC has a huge workforce of over 700 million, most still living in rural areas and in townships and villages. It has a ‘one-child policy’ in most of the country to restrict population numbers as new citizens as well as existing ones have to be fed, housed and employed, no easy challenge. Half the workforce are employed on the land but about 200 million of these are estimated to be surplus to economic requirements and already over 100 million are already in the towns as part of the floating’ migrant population known as mingong. Over one-third of the population live in urban areas. Those out of work in the towns are officially calculated at 3.5 per cent but in reality this could be over 10 per cent, even 20 per cent in the Northern rust-belt areas.

The PRC nonetheless has enjoyed two decades of economic growth since Deng Xiaoping initiated the Open Door policy in 1979. It has recently been hailed as a potential ‘economic superpower’ by agencies like the World Bank. Living standards have risen greatly but the distribution of benefits has been uneven. By mid-2000,

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