Law and Labour Market Regulation in East Asia

By Sean Cooney; Tim Lindsey et al. | Go to book overview

6

Economic reform and labour market regulation in China

Ying Zhu


Introduction

China is presently undergoing a tremendous social and economic transformation as it diverges from its ‘socialist planning system’ towards a market economy with consequent economic reforms and an opening up of the economy to international trade and investment (the ‘open door’ policy). The commencement of this process can be traced back to December 1978, as a result of the decisions of the Third Plenum of the Central Committee of the Chinese Communist Party (CCP) (Zhu and Campbell 1996:29). The reform has proceeded in pragmatic steps in subsequent years, but the consistent goal has been a movement away from a command-economy towards the market (Naughton 1995). Since 1992, this has been couched in terms of the need to establish a ‘socialist market economy with Chinese characteristics’ (Zhu and Fahey 1999; Zhu 2000). 1

The transformation from the central planning system towards a market-oriented economic system requires an adequate legal framework to ensure the process is stable and controllable. The process of economic reform does not proceed according to a blueprint, and the decentralisation of economic decision-making needs a legal environment both to legitimise the party/state leadership and to provide a set of rules for governing market-oriented economic activities. The introduction of a system of labour market regulation is one of the established agendas set under the banner of establishing the ‘socialist legal system’ (shehui zhuyi fazhi).

Under the guidance of these over-arching economic and legal reforms, labour market and employment relations policies have been focused on the reform of wages, employment, welfare and management, and the introduction of new systems of labour market regulation and labour law (Child 1994; Zhu 1995; Warner 1996). Labour market reform began with the design of ‘breaking the three irons’, namely the so-called iron rice-bowl (i.e. life-time employment), iron wages (i.e. fixed wage system based on the eight-grade scale for manual workers) and iron position (i.e. unchangeable official position) (Warner and Zhu 2000:121). New systems of labour market regulation were required, which would develop a labour contract system, a structural/floating wage-system, an enterprise dismissal system, and a social insurance system (Yuan 1990; Zhu and Warner 2000a). In the 1990s, the implementation of the new Labour Law (1994) and the formation of a tripartite system

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Law and Labour Market Regulation in East Asia
Table of contents

Table of contents

  • Title Page v
  • Contents vii
  • Illustrations ix
  • Preface xiii
  • 1 - Labour Law and Labour Market Regulation in East Asian States 1
  • References 22
  • 2 - Labour Law in Indonesia After Soeharto 27
  • Notes 50
  • 3 - Law and Labour Market Regulation in Malaysia 55
  • 4 - The Development of Labour Law and Labour Market Policy in the Philippines 91
  • 5 - Vietnam’s Labour Market 122
  • References 153
  • 6 - Economic Reform and Labour Market Regulation in China 157
  • Notes 181
  • 7 - Taiwan’s Labour Law 185
  • 8 - Law and Labour-Management Relations in South Korea 215
  • 9 - What is Labour Law Doing in East Asia? 246
  • Index 275
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