19 Pages

The Significance of Tripartite Consultation in China

Progressively deepening economic reform in the People’s Republic of China since the mid-1980s has led to radical changes in labour relations.1 The traditional guarantees of employment, wages and welfare have been eroded as state-owned enterprises (SOEs) have been progressively freed from state control and subjected to increasingly competitive market pressures and as economic growth has seen the rapid expansion of new forms of non-state enterprise in which none of the traditional guarantees exist. The subordination of enterprises to the constraints of the market was tempered through the 1980s and 1990s by a degree of state intervention, particularly but not exclusively in SOEs, to preserve the ‘socialist’ character of the ‘socialist market economy’. However, the institutional framework and the financial resources required to maintain such intervention have been progressively eroded as responsibility for economic management and financial solvency has been passed to the enterprises. The withdrawal of support for the once privileged SOE employees has provoked a rapid increase in spontaneous industrial conflict and social protest right now and in the near future (Blecher, 2002; Cai, 2002).