The Structure and Roles of China's Party-state System in Industrial Relations: An Updated Review

China's late leader, Deng Xiaoping reaffirmed his determination to clear the ideological obstacles to market-oriented economic reform during his "southern tour" in 1992. China's reforms have been substantial since then. To name but a few, state-owned enterprises (SOEs) began to be privatised in the mid/late 1990s, China finally entered the World Trade Organisation in 2001 after years of hesitation and negotiation, the Communist Party of China (CPC) revised the Party Constitution to accommodate private business owners in 2002 and the state revised its Constitution to provide legal protection for private properties in 2004.¹

This series of reforms profoundly affected not only China but also the rest of the world as China's influence in the global economy increased significantly. Among various changes during China's reform era, the newly developed labour market and a subsequent series of labour issues captured much attention. The unique characteristics of China's industrial relations system, however, confuse many people. The biggest difference between China and western countries in their industrial relations systems lies in the "party-state" system.

In modern liberal democratic systems, state power is usually separated into three major areas of power — the executive, legislature and judiciary — to prevent the possible abuse of power. The concept and structure of the state in China, however, are completely different. Nominally, China also has its own divisions among the executive system (the People's Government), the legislature system (the People's Congress) and the judiciary system (the People's Court and People's Procuratorate), but there is hardly any balance or "separation of powers" among them. Instead, as we will see later, the party-state system penetrates every aspect of the political, social and economic life of the whole country. As a sub-system of the broader social system, the industrial relations system is of course no exception. The question arises then:

What are the structure and roles of China's Party-state system, particularly in regard to industrial relations in China's reform era?

This topic is important, but relatively less studied. Though some scholars discuss the roles of the party-state in China's industrial relations, most do not analyse the matter in depth.² For example, Zhang discussed the role of the party-state in the union development of China, but did not look at how the party-state, as a whole, fits into the industrial relations system and functions.³

This paper provides an updated review of recent official documents as well as academic literature in an attempt to provide answers to the above question. A different view of the function (or dysfunction) of China's party-state in industrial relations is presented here which may act as a starting point to explore the topic in more depth in the future.

Structure of the Party-state in Industrial Relations

After the establishment of the PRC in 1949, the party-state system went through numerous major restructurings. Especially after the launch of the "reform and open-door" policy in 1979, the roles and functions of the party-state changed significantly.⁴ In particular, the party-state's control over and interference in purely economic or personal areas declined greatly. The roles of the party-state in industrial relations changed accordingly. Taylor et al undertook the first attempt to provide a chart to explain the party-state's position in industrial relations (see Figure 1). The diagram and analyses that followed it, however, contain some problems:

Figure 1.

Party-state in Industrial Relations

Source: B. Taylor, K. Chang and Q. Li, "Industrial Relations in China" (Cheltenham: Edward Elgar, 2003), p. 19.

1. 1. They did not clarify the difference between nominal and actual leadership. This problem is reflected in the lines between the people's congresses and governments. Whereas Figure 1 seems to indicate that the people's congresses have direct power over the governments, they are usually referred to as "rubber stamps" in China, meaning that they have little real influence over the operation of...