Chinese Labor Market
PLEKHANOV RUSSIAN
UNIVERSITY OF ECONOMICSBUSINESS SCHOOL
IN LABOR ECONOMICS
Chinese Labor Market
Student: Goremykina Polina
Group № 5302
Supervisor: Razumova T. O.
Moscow 2012
of contents
1.
Introduction
.
Transition of the Chinese labor market
.1
Breaking the Iron Rice Bowl
.2
Consequences for a Labor Force in Transition
.
Labor market reform
.1
Post-Wage Grid Wage Determination
.1.1
Flexible Labor Market
.1.2
Government Control
.1.3
Collective Bargaining
.2
Marketization Process
.
Trade unions in a transforming labor market
.1
Organizational Structure and Function
.2
Role of Grass-root Trade Unions
.3
Distinguishing Collective Contracts and Wage Bargaining
.4
Independent Unions
.5
NGO and Foreign Influences on Labor Relations
.6
Are there “Real” Chinese Trade Unions?
.
Evaluating China’s industrial relations
.
Wages in China
.
The program of attraction of foreign experts in China
.1
Chinese experience of attraction of foreign experts
1. Introduction
’s labor market has undergone significant changes in the past
twenty years. A more market- oriented labor market has emerged with the growing
importance of the urban private sector, as state-owned enterprises (SOEs) have
downsized. At the same time, rural employment growth has slowed, and migrants
have sought jobs in the more dynamic coastal provinces. Despite the progress on
reforms, a sizable surplus of labor still exists in the rural sector (about 150
million) and SOEs (about 10-11 million).main challenge facing China’s labor
market in coming years is to absorb the surplus labor into quality jobs while
adjusting to World Trade Organization (WTO) accession. This paper estimates
that if GDP growth averages 7 percent and the employment elasticity is one-half
(in line with historical experience), the unemployment rate could nonetheless
double over the next three to four years to about 10 percent, before declining
as SOE reform is completed. These pressures would be limited by stronger
economic growth, especially in the private sector and the more labor-intensive
service industries, which have generated the most jobs in recent years.paper
first discusses trends in the Chinese labor market before outlining the
progress on reforms. It then presents an analysis of the medium-term outlook
for employment and unemployment, and draws some policy conclusions.industrial
relations have significantly changed from governmental paternalism to a more
market oriented system for large portions of the labor force. Previous labor market
institutions have either been transformed or abolished while new ones have been
slow to develop. The current institutional design suggests that the labor
market is not functioning in an optimal manner nor is there a clearly outlined
development strategy. It remains an open question if the post-reform
institutional design sets the conditions for a competitive labor market. The
other question is if a competitive and fully flexible labor market is suitable
for China and how the government can influence these developments. In the past
and to this day China has often been associated with poor labor conditions and
low wages. This constellation may be connected to the rapid economic growth but
is also associated with increasing discontent and inequality, which has equally
been on the rise as present labor market institutions have been struggling to
create social stability. In this current environment of change trade unions
have been trying to find their place in Chinese industrial relations. Recently
the government has been paying more attention to the potential role trade
unions could play in the Chinese labor market. Even so, under the current
framework they face considerable constraints in representing workers’
interest.aim of this paper is to provide insight to recent developments on the
Chinese labor market and the role of unions. Current literature provides
various snapshots of the Chinese labor market, but comprehensive research is
still very limited. As a first step to a more comprehensive understanding, this
paper, as part of ongoing research, will attempt to provide insight to central
aspects pertaining to labor market developments and trade unions. First, this
paper will provide an overview of the transition of the Chinese labor market
and its tilt toward a market based economy while highlighting some consequences
for the labor force. In the second part the paper will focus on the
marketization of the labor market since initial reform, specifically looking at
current wage determination mechanisms while emphasizing Chinese industrial
relations. In the third part attention will turn to how Chinese trade unions
are functioning, focusing on opportunities and constraints they face under the
current labor market conditions while also briefly taking external influences
and independent unions into consideration. Finally, this paper will conclude by
providing an evaluation of the emerging Chinese labor market conditions.
2. Transition of the Chinese labor market
2.1 Breaking the Iron Rice Bowl
the process of shifting from a planned economy to a market
based one the government significantly reformed the labor market, gradually
dismantling the government-controlled system to form a more competitive market.
According to Fleisher and Yang (2003) “labor market reform has been both the
source and a major limitation - perhaps the major limitation of China’s
economic transition”. Prior to 1978 the organization of labor was centered on
the work unit (danwei), which was at the core of the Chinese iron rice bowl.
Under this concept workers would be assigned to a work unit functioning as a
sort of community within the society (xiao she hui), providing its workers and
their families with a wide range of social benefits. Generally, these benefits
included lifelong employment, low wages in accordance to the centralized wage
grid system, and additional benefits such has housing, schooling, and health
care. This system detached wages and employment from company performance,
establishing nearly complete security (Saha, 2006). Such extensive welfare,
however, was only granted to members of the danwei, and variations between
different enterprises were notable. The system did not exempt workers from all
kind of hardship (e.g. during the Great Leap Forward), but for the most
provided basic care for its members. Additionally, the rural population did not
have access to such industrial welfare provisions, having their basic needs
provided through rural people’s communes instead (Shen, 2007). The basic
concept between the urban and rural forms of organization is similar in nature
while differing in quality. Because of this it is common to use the term danwei
for urban as well as rural areas in current literature; the same will be done
in this paper.
The state played a significant part in the welfare system
undermining any type of flexible markets using government paternalism to shield
the working population by guaranteeing social welfare and at the same time
limiting widespread inequality. Under the socialist economic regime the
majority of China’s labor force was employed either in rural communes or in
urban state-owned enterprises (SOE), but the distribution of jobs has
significantly changed since (Fleisher and Yang, 2003). As the Chinese
government continued its marketization efforts of the Chinese economy, benefits
provided for by the danwei have gradually disappeared. In the process of
marketization private enterprises have become increasingly important for
employment, while at the same time government controlled enterprises have
laid-off workers and significantly reduced their social benefits. Some segments
of the labor force were able to benefit from this transformation, while others
struggle to deal with the increased social risks (see section 3). The changing
composition is illustrated in Table 1. Various forms of private ownership types
are crucial in job creation enabling the government to reduce employment in the
state-owned sector.
Initial reforms limited exposure to market mechanisms, but
continuous privatization efforts reforms began to specifically target the labor
market affecting a higher proportion of the labor force. Labor market reforms
entered the most radical phase in the 1990s when the government significantly
downsized the public sector, putting an end to “cradle-to-grave” socialism and
lifetime employment (Dong, 2004).
Please note that employment data by enterprise type are based
on the annual population sample survey. As a result, the sum of the data by
ownership and by sector is not equal to the total.
Downsizing of the state sector is reflected in Figure 1, as
the proportion of employees in state enterprises rapidly decreased in the early
1990s whereas it remained relatively stable in the years before. Consequently,
as has been the case in other post-communist countries, a major employment and
welfare institution was reformed, significantly influencing fundamental values
of the Chinese society. Continuous liberalization resulted in marketization of
labor relations, specifically related to determination of hiring, dismissal,
and wages, transforming the paternal employer-worker system to an exchange of
labor services for wage payments (Rawski, 2003).
The demolition of the danwei system and the establishment of
a mix-economy have brought along an increase in private held enterprises,
entrepreneurialism, and profit orientation. But unlike in many Western
countries where capitalism and workers’ rights were able to develop themselves
during the industrialization process, any such developments remain under tight
orchestration of the Chinese government. In order to please the country’s
desire for industrialization and economic development, output and profits have
been given key priority. Often this came at the expense of workers’ rights and
the environment as a mechanism needed to be developed to find employment for a
massive number of laid-off state employees in an effort to reform highly
unproductive government enterprises. If this apparent economic policy path
chosen by the Chinese government was necessary for job creation remains
debatable.
2.2 Consequences for a Labor Force in Transition
attention on high profile cases of labor and environmental
maltreatment has recently been cause of much discussion in China. China’s labor
market has been in the press internationally and to an increasing amount
domestically for poor working conditions, default on wages, low wages, forced
labor and other forms of abuse, not to mention the depletion of the environment
which is contributing to health problems within the population while keeping
production costs low. Unpaid wages and violation of employee rights have become
an apparent problem within the labor market and are an indicator that the labor
market is highly unregulated. A survey conducted by the Standing Committee of
the National People’s Congress (NPC) in 2005 found that 80% of private firms
violate employee rights (China Daily). This is reinforced by figures for
defaulted wages. Considering many cases of unpaid wages are not reported, an
exact figure on default wages can only be estimated, as official data may be
the tip of the iceberg. However, national data on defaulted wages from the
state regulated construction industry may illustrate the enormity of the problem:
278 billion yuan (2001), 336.5 billion yuan (2002), 367 billion yuan (2004)
(Chan, 2005). Data for 2001 indicates that private companies are especially
prone to disputes, being involved in far higher numbers than state-owned
companies (Cai, Wang and Du, 2005). The negative trend of rising labor disputes
has been increasing over the years indicating that the Chinese labor market is
facing significant challenges and discontent among its labor force. As with
figures for defaulted wages, the official data may only be an indicator for a
much greater national problem.in aggregate terms China’s massive population has
enjoyed significant benefits during the government reform efforts it has become
clear that the rapid GDP growth has come with a price tag and that workers’
rights are not being adequately protected. As inequality is growing and
benefits of the reform effort are unevenly distributed among the population,
discontent about unfair treatment is on the rise. World Bank and Asian
Development Data show that the Gini coefficient has dramatically risen from
0.16 in 1978 to 47.3 in 2006 giving China one of the regions highest growth
rates for at least the last decade. In response to this the government has, at
least on paper, taken action to increase its efforts to somewhat shift the
imbalance between capital and labor.exploitation of natural resources and labor
could otherwise backfire threatening the country’s tremendous economic
development. At present, many economic costs are externalized by the industry
at the cost of the public. In how far this policy has contributed to the
enormous growth and impressive development of the Chinese economy would require
further detailed research. Perhaps other economic policies would have been more
suitable and sustainable, but a full discussion of this topic is beyond the
scope of this paper (see e.g. Stiglitz, 1996). Regardless of this debate, this
policy influenced initial economic reform and labor market polices. After
achieving first milestones, these policies have not been able to adapt to
challenges related to dissatisfaction and uncertainty in society. China’s
current social problems become apparent when considering the growing income and
wealth gap in the country as well as the speed at which this has happened. Certainly
the vast majority of the country has benefited from the countries development
in terms of living standards, but as the wealth gap is rising and workers’
rights are being violated further change seems necessary. Abolishing the
iron-rice bowl under the danwei system were important steps in the
marketization efforts, but the government has not yet established labor market
institutions effectively protecting worker’s rights, while at the same time
private enterprises have had the opportunity to exploit a wide range of
opportunities with little regulation creating a significant power
imbalance.lack of supporting social institutions might now be a threat to the
continuous transition to private employment (Fu and Gabriel, 2001). The move
from a socialist paternal labor relations system has been implemented without
providing the labor force much possibility to adjust nor supplying it with
necessary support providing institutions. In a sense the Chinese labor market
flexibility has become so prevalent that when there is no work workers often
have no income, but during busy periods overtimes reach levels in violation
with national laws (Chan, 2005). The government has relied on the private
sector for job creation as it was downsizing the state-owned sector and perhaps
for this reason has provided management much leeway in establishing an
industrial relation system best suiting their needs. In this process the
government has shifted from a system where it had complete control over labor,
benefits and wages to a system where its influence has significantly been
reduced. From an enterprise’s perspective these conditions might be favorable
at first, but this kind of capitalism cannot be beneficial in the long-run.
Uneven institutional evolution of labor markets including their regulation has
profound economic, social, and political consequences for China. Dealing with
the challenges of the transformation of the labor market is an essential task
the Chinese government must tackle (Fleisher and Yang, 2003).
3. Labor market reform
continuous reform efforts the labor market has attempted to
progressively marketize. Equally the Chinese labor market has become segmented,
creating different conditions for a now heterogeneous labor force. In great
contrast to the previous wage grid system which ensured unified wages
independent of performance, the unified labor market has been broken up and a
variety of labor market segments have evolved creating variations in the
consequences faced as marketization efforts are being carried out.the iron rice
bowl brought dramatic changes to the Chinese labor market. First, over time the
state controlled enterprises increased worker lay-offs. As outlined above these
workers were dependent to find subsequent employment in the newly established
private sector. People entering the workforce faced a very different scenario
from previous generations, now being confronted with a far more flexible labor
market, where different criteria determine employment. Searching for job
opportunities, portions of the population began to migrate within the country;
typically from rural to urban areas. However, constraints due to the household
registration system (hukou) put migrant workers in a difficult legal situation,
making them susceptible to exploitation. Commonly these jobs are described as
“three-D-jobs”: dangerous, dirty, and demanding. Usually they are attributed to
little job security or benefits as the usually informal nature of such jobs
makes it easy for employers to evade formal rules regulating the labor market
(Cai, Wang and Du, 2005). Second, the market and profit orientation leading to
wage deviations along the different segmented sectors of the labor market have
increasingly determine wages. The lack of labor market institutions filling the
large gap left by the demolition of the iron rice bowl set condition for
establishing a flexible labor market with an uneven employer-employee
relationship.this stage of the Chinese labor market reform, the evolution of
institutions regulating the now more flexible market have been slow to evolve,
often providing employers with far more leverage over the average worker.
Recent negative developments on the labor market have perhaps convinced the
government to introduce stricter rules and regulations. The new Employment
Contract Law taking effect January 1st, 2008 is intended to provide employees
with improved protection and rights. A core component of the law requires
employers to enter into a contract with an employee within 30 days of fulltime
employment. Further, the law sets out to provide improved protection of
employees’ rights. Perhaps this move can be seen as a statement to limit full
liberalization of the labor market and to set out certain minimum standards,
all contributing to a healthier and harmonious relationship between workers and
employers. On paper these changes appear impressive but they remain little more
than a paper tiger when employers continue to violate existing laws.
3.1 Post-Wage Grid Wage Determination
analyzing the marketization of the labor market, wage
determination mechanisms are a crucial component. For the purpose of this paper
the scope will be limited to this dimension. Fragmentation of the labor market
and different reform efforts has had its effects on the wage determination
process. At this stage the Chinese workplace relation system is in the making;
with several competing or perhaps interrelated systems in place. Current
competitive labor markets are coexisting with government control and attempts
of collective bargaining (Chan, 2000) but it is still unclear which system will
prevail. Regional experimentation rather than the “big bang” approach has been
a notable feature of Chinese reforms as policy makers did not prescribe to the
mainstream economic formula of development (Qian, 2002). When dealing with the
evolution of the labor market similar developments are noticeable.authors such
as Meng (2000) will argue that the Chinese labor market has become increasingly
flexible with evidence of a neoclassical labor market with an evolving market
mechanism, whilst others will reject the competitive hypothesis and argue that
administrative controls on wages continue to exist (Yao, 1999) and that there
is no evidence of regional or sector wage conversion (Yang, 2005) as the neoclassical
model would predict. Other recent studies (e.g. Fleisher and Yang,
forthcoming/Cai, Park and Zhao, 2004) indicate no major developments, which
have led to an improvement in the functioning of labor markets. Yet, others
argue that China has inherited several institutions from the pre-reform era,
which in the post-reform era interact with the newly emerged labor market (Cai,
Wang and Du, 2005). The current discussion shows the complexity of the Chinese
labor market and conflicting conclusions for different segments. In some cases,
the different perspectives can be explained by the different sectors of the
labor market, which have been the focus of analysis, but a comprehensive
understanding is still lacking. However, current literature will agree to the
fact that the labor market has become increasingly flexible while pre-reform
institutions are still influencing the newly developing labor relations. To
illustrate the increasing marketization of the Chinese labor market the
influences of three existing wage determination mechanisms and the problems for
the labor force which result out of them will be briefly outlined: flexible
labor market, government control, and collective bargaining.
3.1.1 Flexible Labor Market
Pay based on qualification and performance is a driving
component in the marketization of the Chinese labor market, both in the state
as well as the private sector. Though the government may still influence wages
(see section 3.1.2 below) its influence was considerably reduced having a growing
portion of wages being non-regulated. In a competitive market, regional
disparities would attract migration from low earning regions to regions with
higher pay reducing wage differentials over time (Yang, 2005). However, this
assumption can only function in presence of complete labor mobility, not to
mention that it assumes that wages are the only determinant and relocation of a
human being is as simple as shifting money from a low interest country to a
high interest country. With a large migrant population and a continuous shift
from rural to urban areas, labor mobility seems to be present in China.
However, the hukou system still continues to be a major constraint and an
institutional barrier. Workers may migrate to higher paying urban areas in hope
to find employment, but pre-reform institutions create a major obstacle,
putting them at a disadvantage while providing employers greater bargaining
power.the low skill sector with an enormous pool of workers looking for jobs
and intense rural-urban competition, supply and demand result in low wages,
poor working conditions and job security. Workers cannot be sure to keep their
current job, nor can they rely on their source of income as the flexible labor
market will lay them off in an economic downturn as quickly as it has hired
them. To make matters worse a large informal sector combined with weak
enforcement of laws may strip workers of nearly all their rights. Neoclassical
theory would prescribe that workers leave the labor force under unfavorable
working conditions. Considering, that welfare and social security is basically
non-existent, this option does not appear to be feasible for the majority of
employees relying on wages for income. With a large pool of labor supply for
the low skilled sector, enterprises will seldom be in the situation where they
are required to improve working conditions to secure adequate employment
numbers. Certainly, workers will try to choose the companies with the best
labor conditions and the situation will contribute to high labor turnover at
companies with poor working conditions, but the enormous labor pool puts
employees who rely on wages at a disadvantage
vis-à-vis employers. Additionally, high labor turnover will reduce employers’
willingness to invest in training and may further contribute to an inefficient
labor market.the skilled sector the same market conditions apply, but in this
case high skilled workers are in a far better condition, enabling them to
bargain for higher pay and opt for better positions and conditions if such an
opportunity arises. While at the same time the heated competition for skilled
and highly skilled employees has come with significant wage increases, wages
for unskilled workers have been stagnant and in real terms declining (see e.g.
Rawski, 2003 and Chan, 2005). This then again underlines the weak position of
unskilled workers and that they are bearing the brunt of problems of the
marketization efforts. Speculatively, they may be punished as management
attempts to off-set wage increases in the skilled sector. Whereas undersupplied
skilled labor can bargain for improved labor conditions, the majority of the
labor force faces a unitarily determined wage rate set by management. The
problem with all this flexibility is that the share of unskilled workers is far
higher than the share of skilled workers, creating a challenging situation for
the majority of the Chinese workforce. As a result this development may have
contributed to high income disparities and it might be questionable if this is
a desirable situation for the social and political system of China.
3.1.2 Government Control
As illustrated in Figure 1 the importance of government owned
enterprises have become less relevant to the majority of the population, as
enterprises have drastically been downsized and emphasis has been put on the
private sector. For the remaining employees certain components of the danwei
system are still in place in the state sector although the government has
gradually withdrawn from its extreme intervention and let market forces take
over (Knight and Song, 2005). During the mid-1980s and especially during the
1990s, when the most significant labor market liberalization efforts were
undertaken, SOEs were granted more freedom in setting wages (Yueh, 2004).
Wage-grid style government control is no longer known in China as the labor
market has shifted from a planned economy to a market based economy. Wage
structures in SOEs have been reformed during the 1990s, subsequently
implementing performance based schemes and a reduction of regulations (Saha,
2006). Still so, the government continues to influence market conditions as
government and party officials establish wage guidelines mostly for, but not
limited to, SOEs. Typically, this influence may pertain to regulating total wages
and increases of total wages, leaving internal wage distribution to the
management (He, 2003). How wide spread government wage guidelines are and in to
what degree they are actually enforced remains unclear. However, it can be
expected that the overall influence for the majority of the labor force will
remain negligible as these guidelines will most likely only be applicable for
executive or mid-level management positions (Rawski, 2003).of the state-owned
sector the government has introduced minimum wages for China in 1994. The
minimum levels vary by province as well as within the provinces themselves due
to variations in cost of living. Although the minimum wage rate has been
increased since its introduction, increases have not been able to keep up with inflation.
Further, the Ministry of Labor and Social Security (MOLSS) has advised
enterprises, especially profit making ones, to pay workers more than the
minimum wage (CLB, 2007). As with many things, in how far this is enforced,
also in presence of wages rates below the minimum level, remains an open
question and is likely to vary across the country and sectors., the government
has a considerable share of control over agreements involving trade unions as
any collective contracts (see below) between unions and management are subject
to approval by the MOLSS. But here too, as with minimum wages, the same issues
are apparent. Given the sizable influence the government can have on limiting
market mechanisms, its influence on the private sector will depend on local
government’s preferences and abilities, and may be more enforced on a
case-to-case basis rather than on a large-scale basis.
3.1.3 Collective Bargaining
It is noteworthy not to confuse collective bargaining with
collective contracts, which usually do not include wage negotiations. Quite in
contrast to collective contracts, collective bargaining requires courage,
skills, and the determination to confront management with fundamental issues of
the collective labor force represented by the trade union. There have been
limited experimentations with collective bargaining in China, with the majority
of collective wage bargaining taking place at the enterprise level, although
there are also regional and industry variations. There are MOLSS regulations
for the process of collective bargaining, but it remains unclear how this
process gets initiated. Therefore, it is no surprise that collective wage
bargaining remains highly uncommon in Chinese industrial relations, as trade
unions have little bargaining power over management and lack political support.
To this day, Western style collective bargaining has been given little priority
in the government’s determination to increase marketization. We will return to
this topic in more detail in section 4.4.
3.2 Marketization Process
the beginning of first economic reforms including continuous
downsizing of the state sector accompanied by specific labor market
liberalization in the 1990s, the Chinese labor market has become extensively
marketized while the government has permitted market forces to control larger
shares of the labor market. The changing employment patterns and conditions
have become more market oriented, while causing problems to job security,
social protection, and wages. It may seem as if the Chinese government has
relied on these mechanisms in the immature labor market to solve problems of
unemployment during the transition period. Market forces have taken on an
important part in developing the labor market and breaking up formally fully
institutionalized wage structures (Cai, Wang and Du, 2005). Compared to the
past, the Chinese labor market has for sure become more flexible. According to
Fleisher and Yang (forthcoming), major problems contributing to problems within
the labor market can be contributed to current legislation often not being
“incentive compatible with the goals of local governments”. Current efforts to
privatize and let market forces take over have paid-off, enabling the evolution
to a more market based economy, but at the same time other parallel
institutions contributing to a labor market with fair treatment of labor have
been neglected. In how far the government has remained in complete control of
these privatization efforts should also kept in mind. Heilmann (2004) argues
that due to bureaucratic confusion regarding how to control the private sector
combined with a general underestimation of the developments, growth was fairly
unnoticed and uncontrolled. This led to the point where the private sector had
gotten too large to enforce a “conservative counter-strike”.
4. Trade unions in a transforming labor market
4.1 Organizational Structure and Function
All-China Federation of Trade Unions (ACFTU), the governing
body for all unions in China, has not much changed in terms of its basic organizational
structure, although its responsibilities have dramatically changed with the
demolition of the iron rice bowl where unions’ main duties were related to
social welfare and leisure activities (Heuer, 2004). In 2007 the ACFTU had over
150 million official members, covering about 20% of the labor force (ACFTU,
2007). A breakdown of unionization by ownership type is a difficult task, as
figures cannot be confirmed by official ACFTU data. However, Shen (2007)
provides own estimations as well as figures used by other authors. Generally,
SOEs are likely to have a high degree of unionization, with as much as 90% of
enterprises having a trade union. Figures for private enterprises and foreign
owned enterprises vary by author, ranging from under 10% to about 50%. These
figures are to be treated with caution, but it can be assumed that non-SOEs are
significantly less likely to unionize voluntarily.ACFTU’s current structure is
a top-down, hierarchical organization. As outlined by Chinese Trade Union Law
grass-root unions can be established at the enterprise level if so desired by
workers, which would then represent the lowest organizational level. The law
does not tolerate competing enterprise unions and all established grass-root
unions are subordinate to the local, provincial and industrial levels of
organization, with the national ACFTU on top. Grass-root union representatives
are usually appointed by party officials and as a result one can expect that
union leadership is more likely to side with management than to fight for its
members’ interests. Since, for the vast majority, workers do not choose union
leadership, their interest can be easily ignored. Contributing to this, local
governments are in competition for foreign investment domestically as well as
with other rising regional economies such as Vietnam, and may prefer to keep
trade unions tame (Chan, 2000). Consequently interaction between union
officials and members is nearly non-existent and it may be argued that Chinese
unions are likely to operate more on behalf of government and management
(Metcalf and Li, 2005). There have been small numbers of enterprise level
elections of union officials potentially contributing to provide workers with
improved representation, but in how far this mechanism is suitable and
supported by the government is yet to be determined (Chan, 2005). As with many
policies in China, much depends on the sentiment of local officials. Since
local and provincial governments are expected to deliver high growth of output
and exports while often facing excess labor supply, official sentiment can
easily tilt towards employers (Rawski, 2003). The dependence on local
governments’ preferences can reduce unionization efforts, and, if they are
established, their effectiveness and bargaining power.important role for trade
unions has been to keep the government in touch with its workers, having them
functioning as a “transmission belt” (Dong, 2004). The top-down function is the
mobilization of labor for means of production and serving the government’s
interest. The bottom-up transmission then is the protection of workers’ rights
and interest. However, workers have little room to communicate their interests
as much bottom-up transmission is suppressed (Chan, 2000). In this sense, its
core activities have little to do with Western understanding of trade unions.
This historically limited role may have, among others, two reasons. First, the
concept of the iron rice bowl, the wage grid system as well as the a non-market
economy with non-profit oriented enterprises administrated by the government
meant that most traditional trade union activities were occupied by the
government, leaving trade unions with a limited role associated to providing
for welfare issues. Second, all people, workers and management, were
(supposedly) pursuing a common goal which due to the ideology made any further
union activity futile. Another factor which contributes to the stagnant
organizational structures and tight government association are political fears
owing to the association of parts of the ACFTU and especially autonomous trade
unions with events during the 1989 Tiananmen Square incident (Sek and Warner,
1998). As a result Chinese trade unions remain under the same strict government
control as it has in the past thirty years. Nevertheless, due to the increasing
marketization of the Chinese economy, the ACFTU has been confronted with a
rapidly changing environment. With reform efforts drastically transforming the
previously planned economy, the formerly homogenous Chinese workforce has
become increasingly diversified, creating problems of representation for such a
centralized organization as the ACFTU (Howell, 2003).tripartite between
government, management, and trade union may cause legitimacy to be questioned
by employers and workers for different reasons. Workers’ trust in the state
controlled union will be limited for fear that it does not represent its
interest but rather that of management and/or the government as the union is
caught in the dilemma set out by the rules and regulations governing its
existence. Management, on the other hand, next to the standard reservations
against unions, may fear close ties to the government and worry about potential
state interference (Ge, 2007). Several authors such as Metcalf and Li (2005)
will however argue that the interaction between unions and its members is
practically non-existent, while unions tend to operate on behalf of the
government and management instead. These circumstances put unions in a
situation which is prone to a conflict of interests making it difficult to
truly represent its actual constituency when bargaining with management.
4.2 Role of Grass-root Trade Unions
exploring what role Chinese unions are currently doing, this
paper will first highlight the tasks outlined by legislation and regulations
set out by the ACFTU itself, followed by a critical evaluation of its present
role as well as the limitations set out by the conditions influencing the
current situation on the Chinese labor market.the past decade the Chinese labor
law as well as the role of unions has been transforming. But a serious gap of
what trade unions are entitled to do and what they do in reality persists, as
this paper will try to demonstrate below. Today, as the ACFTU constitution
states, the union’s basic responsibility is to protect workers’ legal rights
and interest. This then is reflected in the union’s core activities outlined in
Article 28 of the constitution, including assistance in mediation of labor
disputes, education programs, legal supervision, and workers’ representation
during collective contract negotiations. The majority of the activities include
dealing with malpractice in employment and poor working conditions which have
been recognized as factors contributing to unstable labor relations (Dan,
2003). Basically, a core function of Chinese trade unions is to act as a
watch-dog for the implementation of labor laws and to provide workers a
pressure valve to which they can turn in the event of unfair treatment in
violation of current laws. Very much in contrast to Western unions, wage
negotiations are not a core function for Chinese unions at this point (see
section 4.4). On the national level the ACFTU has been pushing on the
legislative front to improve the legal status of the workforce, most notably
the new Employment Contract Law. Certain parts of the law were under criticism
by European and American lobbyist groups representing Western enterprises’
interests in China and have been watered down. Worried about wide spread
discontent, the government, in a recent push, set quotas to unionize foreign
owned enterprises and in a high profile case successfully unionized Wal-Mart in
2004 which elsewhere refuses its workers to organize (Chan, 2005).it comes to
evaluating what Chinese unions are actually doing one could have a vivid
discussion. Arguments could be as far as that unions are practically
non-existent to that unions are doing their very best, given their current
status. Perhaps everyone would be able to agree that Chinese unions currently
function very different compared to Western unions, both in terms of their
organizational structure as in the role they have representing workers’ interests.
For this reason it may not be appropriate to compare them with each other.
Certainly the working conditions of Chinese unions are very challenging as they
have multiple objectives to keep in mind involving government, enterprises, and
the interests of workers. It is only naturally that conflict of interest will
arise leading to unstable implementation of policies. The dilemma of unions may
question its legitimacy of representing workers. As a result, workers tend to
still view trade unions less associated with their representation, as personal
linkages between management, government, and union leadership continue to be
assumed (Heuer, 2004). Even if grass-root unions are willing to protect its
members’ rights, they still have very little bargaining power over employers.
Some authors such as Chen (2003) will argue that after smashing the iron rice
bowl the government is “sacrificing workers interests for the sake of
restructuring the economic system”. Local officials’ preference for GDP growth
might also contribute to side with the enterprises’ desire for a union free
labor relationship at the expense of protecting workers’ legal rights. The
government has discovered the potential of unions, but at this stage might
still be experimenting on what exact role they should be given even as they are
pushing for a stronger unionization rate. As the paternal role of the
government has been abandoned this vacuum might be filled by unions (Metcalf
and Li, 2005) and lead to a revised form of state paternalism. In an effort to
please workers’ needs and to prevent confrontational labor issues its new role
may be to appease discontent workers (Chan, 2000). Of course this assumption
might conflict with workers’ limited trust in trade unions itself (see section
4.4). Union activity has been controversial and it might be questionable if
workers’ interests are truly being represented. The government, limiting the
possibilities of union officials, must support any changes. But changes in the
Employment Contract Law and apparent strengthening of union activity might be
first steps in helping workers assume their legal rights which have and
continue to be violated in many cases; developments underlined by increasing
numbers in official labor disputes, keeping in mind that these might be dwarfed
by actual violations.its current stage Chinese labor unions are to take on a
role to protect workers legitimate rights outlined in the country’s labor laws
and to enable workers to communicate grievances in their employer relationship.
Perhaps in response to increasing worker-employee tensions the government has
taken first steps to protect workers from exploitation, poor working
conditions, and uncertain labor relations. These developments in increased
labor protection are new and might conflict with the government’s current
economic policies and chosen, yet debatable, strategy for continuous growth and
job creation (see section 3). On paper workers are now given some leverage in
the unequal power relation between workers and employers. But Chinese trade
unions traditionally, have had a collaborating role with the communist party as
well as management and it might seem unlikely that they will strongly oppose
the state bureaucracy. For the long-run development they need to improve their
ability to represent workers’ interests and change their organizational
structure (Ge, 2007).
4.3 Distinguishing Collective Contracts and Wage
Bargaining
chinese labor market reform
Collective contracts have been present in China since the
early 1980s and have been reshaping themselves over time (Sek and Warner,
1998). Despite their presence and evolution one might question their
effectiveness. First, its representation of workers’ interest is questionable
as is the leverage against employers in the bargaining process. Second, their
scope is fairly limited. The agreements do not emphasize a confrontational
bargaining process between management and unions, as the main goal is to create
“harmony” and “stability” within society (CLB, 2007). Consequently, as
mentioned above, collective contracts do little more than reflect current labor
legislation and for the most do not include any additional provision which
might increase labor costs. Clarke (2004) refers to collective contracts as a
self-regulatory collective institutional mechanism to secure ‘harmonious’ labor
relations”. The ACFTU’s perception of collective contracts and agreements is in
a similar fashion:
“Practice has shown that under the conditions of developing a
socialist market economy in China, implementing the system of collective
consultation and collective contract has played a very important role in
protecting workers' legitimate rights and interests, establishing harmonious
and stable labor relations and promoting economic growth.”at first one might
question the significance of collective contracts for workers as they limit
their scope to legislation, in a country where labor laws are often ignored to
the benefit of management this can be an institution which improves working
conditions for employees covered by collective contracts, assuming unions then
actually control the implementation. Wage negotiations, a central point in
advanced economies, only play a limited role, but as Chinese industrial
relations are in the making, this might be too much to ask for at the current
transformation phase.new Employment Contract Law of January 1st, 2008 can be
seen as a commitment by the government for further development of collective
contracts. Revisions and additions to the old law outline that “labor unions
shall assist and guide workers in the conclusion of employment contracts with
their employer and the performance thereof in accordance with the law, and
establish a collective bargaining mechanism with the employer in order to
safeguard the lawful rights and interests of workers” (Article 6). Article 53
even gives provisions for industry and area wide collective contracts quite in
contrast to the usual enterprise level based system in place. The new law
improves the legal status of workers, but for the most it excludes provisions
regarding collective bargaining and yet needs to prove its effectiveness.wage
bargaining is still premature, but since the 1990s there has been
experimentation (Howell, 2003). According to the ACFTU, “with painstaking
promotion and positive participation by trade unions at various levels in
China, by the end of 2006, 305,000 special collective wage contracts had been
signed across the country, with 526,000 enterprises and 37.15 million workers
involved; and 23,900 special regional and industrial collective wage contracts
were signed, with 281,000 enterprises and 11.138 million workers involved”.
Assuming these numbers are not inflated, coverage is 4.8% of the total
workforce. It also remains to be analyzed how and under what conditions these
negotiations are carried out. Given the limited bargaining power of Chinese
unions the actual significance may need to be put in perspective. However, it
should be noted that, very much in line with previous Chinese reform efforts, a
certain amount of experimentation is being carried out at a regional level.
Though collective wage bargaining is being carried out to a limited extent,
wage negations do not belong to the core activity of unions and the focus has
been instead on protecting workers’ legal rights. Chinese trade unions are
highly unlikely to become as confrontational as in many Western countries any
time soon, but the government has taken steps to increase their power base in
protecting workers legal rights and providing them a pressure valve in case of
violations. Current Chinese conditions are not favorable for wage bargaining as
without a power balance the process on equal terms is not feasible. Strikes
would provide workers the necessary instruments increasing their leverage
during the negotiation process. However, strikes are viewed with apprehension
by the government as it is disruptive to labor-management relations and might
be a source for potential social unrest (Sek and Warner, 2000). Since 1982
Chinese law, therefore, officially prohibits strikes, significantly weakening
trade unions’ bargaining power.
4.4 Independent Unions
indicator that Chinese workers are increasingly facing
frustration is the now frequent occurrence of spontaneous strikes and unrest,
which have led the Communist Party leadership to identify labor related unrest
as one of the most worrying threats to Chinese stability (Sheehan, 2000). As
illustrated above grass- root trade unions under the governing body the ACFTU
are to defuse this threat. At the same time trade unions should help prevent
the emergence of independent trade unions, especially out of fear of the
prospects of a Polish Solidarity union uprising (Metcalf and Li, 2005). These
fears were underlined by events around the Tiananmen Square events in 1989 and
have increased party control over any union activity, as well as the
determination to undermine independent trade unions. In many cases trade unions
have failed to resolve labor disputes or to represent workers’ interests
increasing the perception among workers that its interest are not effectively
being represented (Howell, 2003). Studies confirm low approval ratings: only a
fraction of unionized workers would turn to the trade union for assistance (see
e.g. Chen and Lu (2000) and Yao and Guo, 2004). Needless to say, that this
refers to unionized enterprises only, and does not consider the discontent
among workers where unions have not been established, whether the reason is
management or government refusal, nor the large migrant workforce
population.legitimacy and strong linkages with management and government, and
as a result ambiguous union activity, are harmful in establishing any trust
among its members. Considering in 2006 22.4% (Chinese Labor Statistics, 2006)
of the workforce were unionized and assuming that only a fraction of these see
any benefits of unionization, a staggering proportion of the labor force is not
effectively represented. One can only estimate the proportion of discontent
workers which have no effective way of having their interests protected as the
power balance in the employer-employee relations is completely off-balance.
Officially labor disputes have been on the rise and wild strikes as well as
unrest are not uncommon events in China. In order to make their voices heard
the desire to form independent trade unions truly representing their interest
in face of weak government protection is only natural.immediate suppression,
attempts to establish autonomous trade unions have occurred in the past
including the Beijing Workers Autonomous Federation, migrant workers of
Guangdong 1995 and 2002, the Beijing taxi drivers in 1998, and the Free Labor
Union of China (see Howell, 1997 and 2003). The existence and actual work of
independent unions is negligible as authorities are quick to step in.
Autonomous union involvement during the Tiananmen Square events of 1989 have
contributed to creating a nearly impossible environment for setting up
independent unions in the near future, but as Howell (2003) says: “such
attempts are a constant reminder to the ACFTU at both the national and local
level that its claim to represent is questionable and its power to defend the
interest of workers (is) weak.” Ironically, at times the government gave in to
demands, sometimes enforced by illegal strikes, organized by autonomous unions
or labor activists only to then imprison the responsible people (Heilmann,
2004). These attempts underline the current frustration of many workers and
reservations against the ACFTU. In their usually short-lived formations
independent trade unions can only play one role: remind the Chinese leadership,
that for the majority of the workforce the current role of ACFTU affiliated
trade unions is insufficient and the government should attempt to improve and
enforce its duties as outlined in the legislation.
4.5 NGO and Foreign Influences on Labor Relations
enterprises have entered China in large numbers since the
beginning of the 1980s and have in many cases shifted labor intensive
production from countries with higher pay and stricter labor legislation.
China’s enormous workforce and limited regulations provide favorable conditions
for investors needed for economic growth. Foreign enterprises involvement in
emerging or developing economies is controversial, as weak legislation and
different labor standards give rise to exploitation of workers. In the past and
to this day, reports of poor working conditions in foreign enterprises are
common. If put on the spot by the press or non-governmental organizations
(NGO), and because of the recent trend of corporate social responsibility,
companies will usually give in to the public outcry and improve working
conditions above the domestic levels or at least to the minimum domestic
levels. Under this Western moral pressure, companies may improve working
conditions for its labor force. Existing evidence suggests that in China
international firms do provide higher pay and more favorable working
conditions, much in contrast to enterprises under Greater Chinese ownership,
which are notorious for bad labor conditions (see Ge, 2007; Fu and Gabriel,
2001; and Heilmann, 2004).have become allowed to operate in China to some
degree, but usually these are foreign or Hong Kong based. Recently, efforts by
Social Accountability International, a US based NGO for promotion of corporate
social responsibility, has lead to heated discussions if they have protection
of Chinese workers’ rights in mind or if they are working on behalf of Western
protectionism trying to erode China’s competitive advantage (Chan, 2005). There
have also been reports of NGOs assisting workers who have been denied payment
of wages (China Daily). In how far there is domestic diffusion and what roles
foreign influences play would require further study. Given the concentration of
foreign enterprises to the Eastern seaboard as well as the limited role of NGOs
in China it can be suspected that the overall impact is small and will only
affect a share of the workforce, mainly in areas where competition for labor is
high.
4.6 Are there “Real” Chinese Trade Unions
mentioned above Chinese trade unions by no means fit any
Western definition. However, when evaluating Chinese trade unions one needs to
consider the inherited institutional structure in which national trade union
practices need to be constructed (Clarke, 2005). At this stage it would be
unfair to judge Chinese unions on the basis of understanding of trade unions in
advanced economies. Despite all its advances China remains an emerging economy
and it is far from having completed its transformation from a planned economy.
The newly developed labor market is little more than a decade old.
Additionally, the size of the Chinese economy and having the world’s largest
labor force creates additional challenges, perhaps calling for a different
approach. Potentially trade unions may have a balancing effect in the
increasing marketization of the Chinese economy after growth has been the
driving force behind much of the economic policy during initial stages of
economic development often compromising the labor force. Increasing
environmental degradation and violation of workers’ rights are now a source of
discontent; current economic policy and unions may provide the necessary
instruments to appease these developments. At this stage wage bargaining, a
core function for Western trade unions is not at the center of attention. Much
more it is the instruments protecting workers’ rights. However, an important
obstacle which ACFTU affiliated trade unions must overcome is their limited
credibility with its members (see section 4.5). Limited credibility will result
in failure of this pressure valve and the threat to release itself in another
way, potentially causing political and social unrests, which cannot be in the
interest of any government. It remains an open question whether the current
trade union structure can achieve the goals the government has in mind without
further reforming the organization and powers of trade unions. In sum, Chinese
trade unions currently are facing a significant number of limitations including
problems of representation, close management and party ties, weak enforcement
of laws, and the desire for continuous attraction of investment and growth.
Though their overall position is weak, trade unions are a potential tool in
improving protection of workers’ rights. In order to develop into a powerful
balancing labor market institution it will be necessary to build on its
current, in comparison to Western unions limited, objectives and further evolve
from there. At this stage protecting the legal rights of workers has become a
central issue for the Chinese government and trade unions have the potential to
be successful. A study based on the Chinese Economic Census Yearbook 2006
conducted by Ge (2007), while highlighting trade union’s weak position, the
weak enforcement of laws, as well as the limited scope of collective contracts,
concludes that unions do contribute to the protection of workers’ rights. He
further finds that in an employer dominated environment with frequent
violations of the law, trade unions might be the only institutions, which
currently can improve workers’, working condition and legal status. Most
importantly, unionized enterprises provide workers with the necessary channels
to protect their legal rights, whereas in non-unionized enterprises workers
interest might be significantly less protected.
5. Evaluating China’s industrial relations
markets, for a number of reasons, are a special market.
Workers as a factor of production differ from capital and land, comprising a
human component. Unlike other factors, they have a desire for fairness and
equality. In this sense, fully flexible and competitive labor markets may not
be the best alternative in the long-run when transforming a command economy,
requiring the government to set up institutions pressing for a non-market
outcome when required (Knight and Song, 2005). An unregulated market cannot be
relied on to solve all problems in the long-run; much in contrast to this a
regulated market within a functional institutional framework is a prerequisite
for a positive long-term development. In its evolution the Chinese labor market
faces many challenges and one cannot expect it to change as fast as other parts
of the economy. An institutional arrangement considerably distinct to the
pre-reform arrangement needs to be carefully developed. Following Deng
Xiaoping’s famous “feel the stones while crossing the stream” phrase, China has
chosen a unique and pragmatic approach in transforming the country: adjusting
the institutional design while testing different arrangements and correcting
them when necessary. Similar developments are now observable in the labor
market as it is in the process of shaping and reinventing itself. At its
current transformational path it is not yet clear which destination it is
heading for. Moreover, China’s current labor market is an evolving and
tremendously crucial component of the Chinese transformation process.determined
forces have significantly contributed in transforming the Chinese command
economy to a more market based one, but with rising inequality and an unequal
employer-employee power balance, more harm could be done than gained if
non-market institutions are not able to develop themselves. Chinese workers
have been granted the right to choose their own employment while at the same
time paternalistic institutions were withdrawn and bargaining power is
significantly in favor of employers (Saha, 2006). In a way, the Chinese
government is in a dilemma. On the one hand it needs to find ways to quickly
create jobs for the largest labor force in the world, increasingly relying on
the private sector and market forces rather than historically proven failure
prone government control. On the other hand, despite improved living conditions
for most of the population it is facing growing income disparities and
discontent among its labor force, potentially creating social and political
problems threatening the necessary reform process. While conditions have been
unevenly favorable for enterprises, the continuous and apparent hardship may
require the government to seriously take distinctive measures attempting to
rebalance the power disparities in Chinese industrial relations.’s economy
still needs to develop the necessary institutions for its market based economy
to function efficiently. Otherwise marketization is in danger of going too far,
too fast, annihilating non-market institution or not enabling them the chance
to develop (Knight and Song, 2005). Unbridled marketization has its limits in
developing a sustainable economic structure, as it is beneficial only if the
power balance is strong enough to prevent the strongest from exploiting the
weak. From a macroeconomic perspective such a market based labor market may
establish an inflation/deflation prone system when it lacks institutions, which
could contribute to more predictability and control. Labor markets have a
different function with different stages of development (Cai, Wang and D, 2005)
and at this stage it might be necessary to consider the development of non-
market institutions. Facilitating the establishment of employer and employee
associations may contribute to improved coordination in the labor market. Trade
unions can be an effective tool in achieving this goal. However, the federal
government’s current goodwill towards strengthening their position still needs
to actually materialize on the provincial level both to gain legitimacy from
its members and to establish itself as a powerful tool in balancing industrial
relations.
6. Wages in China
this paper I would like to write about the wages in China and
the policy of attraction of foreign experts into the country. I chose exactly
this theme because I have plans of connecting my future career with China.
Currently I study Chinese and am planning to go to China to study for the
spring semester.is the world's largest manufacturing power. Now it takes a
fifth place of global manufacturing. Its factories have made so much, so
cheaply that they have curbed inflation in many of its trading partners. But
the era of cheap China may be drawing to a close. Costs are soaring, starting
in the coastal provinces where factories have historically clustered. Increases
in land prices, environmental and safety regulations and taxes all play a part.
The biggest factor, though, is labor.different parts of China have very
different standard of living, China does not set one minimum wage for the
entire nation. Instead, the task of setting minimum wages is delegated to the
local governments. Each province, municipality, or region sets its own minimum
wage in accordance with its own local conditions. The table below lists the minimum monthly wages for the most
popular provinces or regions in China.
Hong Kong
|
Monthly (Yuan)
|
Monthly (US$)
|
Hubei
|
600, 670, 750,
900
|
95.33, 106.45,
119.16, 143
|
Hunan
|
600, 650, 725,
800, 850
|
95.33, 103.27,
115.19, 127.11, 135.05
|
Jilin
|
830, 890, 950,
1000
|
131.87, 141.41,
150.94, 158.88
|
Inner Mongolia
|
680, 750, 820,
900
|
108.04, 119.16,
130.28, 143.00
|
740, 820, 900,
980
|
117.57, 130.28,
143.00, 155.71
|
Shandong
|
600, 800, 950,
1100
|
95.33, 127.11,
150.94, 174.77
|
Shanghai
|
1280
|
202
|
Beijing
|
1260
|
198.74
|
Guangzhou
(Guangdong)
|
1300
|
205.16
|
Wuhai (Inner
Mongolia)
|
900
|
142.04
|
Hainan
|
680, 730, 830
|
108.04, 115.99,
131.87
|
on this graph we can see that the wages in China increase
every year. This makes the country an attractive place for work.
7. The program of attraction of foreign experts in
China
China is actively undertaking the problem of attraction of
high quality experts, scientists, and managers. Attractive working conditions
for foreigners even lead to such tendency, as "brain drain" in the
Republic of China.deputy head of Public administration for foreign experts of
China Liu Yanguo in interview for the China Daily edition says that in China
there is a campaign for attraction of foreign experts for implementation of the
active involvement in various scientific and economic spheres of China. It is
planned to complete the project in 10 years and attract 1000 high quality
experts from the various countries of the world. The program started to operate
last year, from 40 involved experts 30 started to work, and the others were by
the end of September of this year. The main spheres and fields of knowledge
where foreign professionals will work are mathematics, physics, researches in
the field of chemistry, environment, engineering, power, biological sciences,
and also management in the business sphere.Yanguo noted that there is a very serious
approach to selection of candidates for work in China. Among requirements - age
less than 65 years, possibility of work in China not less than 3 years, and
also carrying out in the country not less than 9 months a year. Well and, of
course, high qualification of the candidate which will be checked by the
special commission.the beginning of the program, 530 offers from candidates for
work were applied. Mostly interest to work in China is shown by the USA, Japan,
Great Britain, Germany and Russia.also specifies in this regard that, in
contrast to "the American dream" about which people spoke in the past
much, there came time of "the Chinese dream" which can be attractive
to the most talented experts from all over the world. Due to the world
globalization and rapid development of China the country is ready to invest
money in attraction of experience of foreign experts, and also to create
attractive conditions for work. So the foreign expert who is coming in China
for work within the project, the single subsidy of 1 million Yuan (about 157
700 dollars) from the government of China will be paid. Foreign researchers can
also receive grants on carrying out scientific researches at the rate from 3 to
5 million Yuan.of China on attraction of highly skilled experts from other
countries is capable to lift national economy on new level, as occurs now.
Other countries, obviously, can study much from this.
7.1 Chinese experience of attraction of foreign
experts
experts from abroad China is focused, first of all, on accumulation
of knowledge in the most advanced areas from all over the world for the purpose
of their effective application for the benefit of economic, military and
technological power of the country. However this policy isn't new. In 1990th
scientists from other countries began to come to China. Jeffrey Lekhman, the
rector and the professor of Institute of law of Michigan University, started to
organize trips for scientists from Michigan to work at the Beijing University.
This tendency is suitable also because of reduction of budgets of many western
higher educational institutions - scientists are ought to look for work in
other scientific centers, and China in this regard offers attractive
prospects.2008 the government of China also started the project of attraction
of the foreign experts, called "The program of one thousand talents".
Within that program about 1600 people arrived, many of whom, however, were the
ethnic Chinese living abroad. Li Jun, the assistant professor of Hong Kong
University of pedagogics, believes that due to the fact that universities of
China receive huge financial means from the government, they are capable to
attract highly-skilled personnel from other countries for the scientific
work.foreigners working at the universities of China increase their
competitiveness and reputation that is important in the conditions of the
competition among higher education institutions. It, in turn, promotes
receiving of the scientific capital by universities that necessary for carrying
out researches. The Chinese higher educational institutions attract generally
specialists of applied scientific branches - mathematics, design, and various
technological branches. The country during an era of technological breakthrough
needs such experts providing further technological and economic development of
China.the attraction of foreign experts helps them to receive a great
experience and necessary information, which can be very valuable in the
homeland. Due to this interaction the Western world learns China and its rules
of the game in modern difficult economic conditions.requirements to the foreign
specialists who want of work in China increased in respect of scientific
qualification and experience due to a large number of people who are willing to
work and need of the country for the most talented scientists. These programs
offer foreigners to pay for all the expenses, connected with moving, providing
conditions for accommodation, and also good conditions for career and
professional growth.authorities of China also pay much attention to attraction
of highly skilled experts of the Chinese origin who have earlier left to study
abroad and reached certain professional heights in other country. The
government of China is ready to stimulate financially such people to homecoming,
offering attractive working conditions. Such experts earn several times more
than average inhabitants.is obvious that to other countries including Russia do
have things to learn from the Chinese colleagues who concentrate the advanced
scientific experts and their mobilization for the solution of necessary
scientific and technological tasks, which rise national economy forward., being
geographical "neighbor" of China, closely cooperates with it in the
most different areas, including migration of labor. It is necessary to note
that in China there are a lot of natives of Russia, working at prestigious
positions. Sometimes they are more demanded than Americans or Europeans thanks
to the fewer claims for living conditions and level of wages. More often Russians
work in the companies, which are anyway focused on Russia in respect of trade,
tourism, finance or cargo transportation.the Chinese model of attraction of
qualified personnel is attractive? First of all, because the country, in the
conditions of an economic crisis, pays special attention to attraction of the
foreign experts who have the knowledge and experience necessary for China, and
the country is ready to pay for it. The use of foreign experience is applied
fast in the latest technologies, which also receive generous financing by the
authorities of China.don't hesitate to study from foreigners, adopting their
experience, while being on study or work abroad. The government of China
encourages Chinese students for study abroad and provides the financial help to
such students by means of various funds, aspiring to integration of the
citizens into the foreign companies. Then the most talented experts "grown
up" thus entices back, to China.becomes more and more popular place both
for work, and for tourism. Chinese language gains popularity around the world.
The Chinese economy shows impressing rates of economic growth. All these became
possible not least because of the thought-over policy of attraction of talented
scientists, experts and managers to the country.
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