China's labour legislation: implications for competitiveness

China's labour legislation, exemplified by a series of laws passed since 1994 and culminating in the Labour Contract Law implemented in 2008, reflects the Chinese Communist Party leadership's commitment to the creation of a ‘harmonious society’. The stated key to the achievement of such goals is the encouragement of domestic consumption vis a vis the global economic crisis. Such attempts to alter consumption structure and income distribution are integral to state employment policy. In addition, this contribution will examine a number of government initiatives, for instance, moves to promote more high-tech manufacturing as well as tertiary sectors and concomitant greater mobility, which in turn demand a better educated workforce. Thus, the main concern of this contribution is to discuss the extent to which recent labour legislation is being successfully implemented in the various categories of enterprise: state, domestic private and foreign invested international businesses. Brief case studies will be cited relating to areas subject to collective bargaining by trade unions. In summary, the contribution's main topic is the extent to which enterprise employment practices in China are being influenced by labour legislation. The central hypothesis to be explored is whether labour legislation and the enhanced role of trade unions are shifting the balance of bargaining power in favour of employees.