ABSTRACT
This chapter explores the dynamic and evolving cooperative sector in China, emphasizing its significant growth in relation to a key aspect of increasing relevance to the global cooperative movement: the role that cooperatives can play in the social and political transformation of society, as seen in China.
This chapter traces the origins of the cooperative movement as part of early 20th-century social reform and anti-colonial movements before delving into later legislative frameworks. Notably, the Specialized Farmer Cooperatives Law of 2007 and the Revised Company Law of 2024 have collectively enhanced democratic governance and economic participation within cooperatives. However, the implementation of these laws has faced challenges, including regulatory inconsistencies, local bureaucratic hurdles, and difficulties in balancing cooperative autonomy with state oversight, all of which have been addressed gradually over time.
China’s cooperative landscape is vast, encompassing over 2 million agricultural cooperatives that engage nearly 100 million households. While the state has primarily supported agricultural and supply and marketing cooperatives, the question of worker cooperatives remains complex, as China’s cooperative framework does not explicitly facilitate worker-owned enterprises on a large scale. However, the Revised Company Law of 2024, by enhancing employee representation in corporate governance, may provide new opportunities for worker-led cooperative initiatives, particularly within state-owned enterprises undergoing restructuring. One noteworthy case is Huawei, which operates under a worker-ownership model through an Employee Stock Ownership Plan. Although it does not function as a cooperative in the traditional sense, Huawei’s structure, where employees own shares via a union-controlled scheme, demonstrates how worker participation in governance can be integrated into a major corporate entity.
This chapter further compares the governance structures of Chinese cooperatives with the International Cooperative Alliance (ICA) principles, examining both areas of alignment and divergence. While Chinese cooperatives adhere to ICA’s principles of democratic governance, autonomy, and member participation, the unique role of the Communist Party in overseeing cooperative development introduces a distinct dimension to their structure. This governance model, in contrast with ICA’s more independent cooperative frameworks, raises important questions about cooperative autonomy in a state-led economic system.
To illustrate these dynamics, the chapter presents a case study of the Lu Wei Agricultural Machinery Farmers’ Professional Cooperative in Jilin province, which the authors visited. The cooperative’s governance model, featuring democratic decision-making, equitable profit-sharing, and government-backed modernization initiatives, underscores broader economic and social reforms aimed at enhancing cooperative efficiency and member engagement.
