Historical institutionalism has demonstrated the value of close analysis of policymaking to illuminate the relationship between institutional change and policy outcomes. This article emphasises the importance of the institutional setting in which state agencies in an authoritarian regime shape the agenda for choice, resolve disagreements and implement decisions. It outlines a model of policymaking and policy implementation in the sphere of labour relations in China by examining these three issue areas: enforcement of labour contract legislation, technical and vocational education and training (TVET) and pension reform. In all three, policymaking reflects the interaction of state entities, with minimal participation by non-state actors. However, in China, more than in other post-communist countries, political authority is dispersed across state bodies with overlapping responsibilities and levels of the administrative hierarchy. As a result, new policy initiatives tend to be “layered” on top of older ones rather than displacing them, and implementation tends to be hampered by jurisdictional competition and diverging bureaucratic policy preferences. This pattern helps account for the pattern of incremental change and weak implementation.