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Multiple Labour Markets in the Industrial State Enterprise Sector*

Published online by Cambridge University Press:  12 February 2009

David Granick
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Extract

Employment in the Chinese industrial state enterprise sector is multifaceted. The bulk consists of regular state workers, entitled to an iron rice bowl and to higher earnings than other workers. Quite apart from the recent contract workers, however, such employment also consists of members of large and small collectives for which the state enterprise is the patron and over which it exercises control. Temporary state workers constitute a third auxiliary category that has long existed in this sector. The national government is the main body determining the number of people in the principal category of workers. However local authorities and the enterprise itself decide on the number in the auxiliary categories as well as choosing the individuals in all categories. (Throughout this article, “local” authorities are denned as including provincial, prefectural, municipal and county. This definition follows from what is appropriate to the hypotheses examined below.)

Type
Research Article
Information
The China Quarterly , Volume 126 , June 1991 , pp. 269 - 289
Copyright
Copyright © The China Quarterly 1991

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References

1. All except two enterprises remained in the same classification throughout the period studied. These two changed classification in opposite directions, moving between sole supervision by a national ministry and joint supervision. There were indeed a fair number of other changes with regard to supervision, but none that cut across the gross categories used in this article. It might be appropriate here to consider the view held by some that all state industrial enterprises that are classified as large or medium sized are under the direct control of the central ministries or of the provincial governments. In my opinion this is clearly incorrect. In 1985–86, 4% of all large and medium enterprises were not even state-owned in whole or in part (Zhongguo gongye jingji tongji ziliao 1987(Statistical Material on China's Industrial Economy, 1987) (Beijing: State Statistical Bureau Publishing House, 1987), p. 142)Google Scholar. Six of the organizations in our sample were under the supervision of sub-provincial units at one time or another after 1974; four of these six were almost certainly within the classification of large and medium industrial enterprises, and two of these four were under solely local supervision throughout.

2. The industrial-output percentages are calculated from the Statistical Yearbook of China 1986 (compiled by the State Statistical Bureau, People's Republic of China. Hong Kong: Economic Information & Agency), pp. 142–43Google Scholar, and from Zhongguo gongye jingji tongji ziliao 1987, pp. 142–43. During 1985 and 1986 respectively, there were 7,873 and 8,665 industrial enterprises operating on an independent-accounting basis that were classified as medium or large. These figures compare with a total of 8,593 industrial enterprises which both operated on an independent-accounting basis at the end of 1985 and which employed 1,000 or more personnel (Zhonghua renmin gonghe guo 1985 nian gongye pucha ziliao (People's Republic of China 1985 Industrial Census Materials) (compiled by the State Industrial Census Group. Beijing: State Statistical Bureau Publishing House, 1988), Vol. III, pp. 1,044–47)Google Scholar. It seems safe to hazard that a minimum of three-quarters of all industrial enterprises with over 1,000 employees fall into the Chinese classification of medium and large, and that roughly 90% of these are state-owned.

3. See Granick, David, Chinese State Enterprises: A Regional Property Rights Analysis (Chicago: Chicago University Press, forthcoming), ch. 1, esp. table 1.2Google Scholar. The characteristics of the sample are discussed in ibid. ch. 1 and by Lee, and Chow, , “Characteristics of the twenty firms,” in Tidrick, Gene and Jiyuan, Chen (eds.), China's Industrial Reform (published for The World Bank; Oxford: Oxford University Press, 1987), pp. 11–38Google Scholar.

4. It is not clear what hiring policy would be followed with regard to sex if the enterprises were left on their own. Managerial inclination is evident; but the interview materials document some rank-and-file support for greater equality than currently exists in the hiring ratio as between the sexes (at least among children of the workers of the plant).

5. Since workers are often hired as apprentices, and provide essentially no product for several years, we must interpret these figures as relating to the expected value of the discounted sum of wages and of marginal values over the working life of the newly employed worker. This condition is stronger than that explicitly stated in the text.

6. Granick, David, Job Rights in the Soviet Union: Their Consequences (Cambridge: Cambridge University Press, 1987), ch. 3Google Scholar. The figure of less than 1% annual dismissals for reasons other than violations of the labour code can be compared with lay-off statistics for all manual workers in American manufacturing. Lay-offs constitute a subset of the category of what would be treated in Soviet statistics as dismissals for other than cause. During those five years of 1930–74 when lay-offs were at their lowest annual proportion of the American labour force, they constituted 16 to 19% in two years, and 8 to 11% in three.

7. Ibid. pp. 102–103.

8. This is a finding of the first set (Hu, Teh-wei, Li, Ming, and Shi, Shuzhong, “Analysis of wages and bonus payments among Tianjin urban workers,” The China Quarterly, No. 113 (1988), pp. 77–93CrossRefGoogle Scholar). However, the authors of this analysis took no account, through simultaneous equation analysis, of the factors leading to entry into the state sector versus the collective one.

9. It is for this last reason that I do not include in the text as temporary labour those hired since 1980, and particularly since about 1984, under the new contract system that is intended eventually to replace permanent employment.

10. Lee, and Chow, , “Characteristics,” p. 13Google Scholar. No detailed end-points of the period are given. See also Chan, K. W. and Xu, Xueqiang, “Urban population growth,” The China Quarterly, No. 104 (1985), p. 608Google Scholar.

11. JPRS-CEA-85–033 of 4 April 1985, pp. 232–33.

12. Lee, and Chow, , “Characteristics,” pp. 5–6Google Scholar; Perkins, Dwight H., Market Control and Planning in Communist China, (Cambridge, Mass.: Harvard University Press, 1966), p. 151Google Scholar; Richman, Barry M., “A firsthand study of industrial management in communist China,” (Graduate School of Business Administration, University of California at Los Angeles, 1967), p. 39Google Scholar. One of the sample enterprises introduced piece work in 1962; it revoked it for most workers in 1965, and for the rest in 1966.

13. The calculation is based on the proportion of earnings due to quota piece work, divided by these same earnings plus those from time work (Statistical Yearbook of China 1986, p. 573).

14. Walder, A. G., “Wage reform and the web of factory interests,” (unpublished paper of 1983), fn. 62Google Scholar.

15. Calculated from Statistical Yearbook of China 1986, pp. 279 and 283–84. The percentage figure is a slight overstatement, as it includes both social security payments and transport costs.

16. See Granick, Chinese State Enterprises, ch. 6.