An Expert’s View on Labor Trends in China

October 28, 2011
  • Jason Ho

    Former Manager, Advisory Services & CTI, BSR

I recently sat down with legal expert and Shenzhen University Professor Hou Lingling to discuss the implications of China’s 12th five-year plan. In particular, we focused on the new social insurance law, which guarantees five social insurances for workers, including: pension, unemployment, work injury, medical care, and maternity leave regardless of non-local residency. We also spoke about the collective bargaining mechanisms (CBM) that were developed in response to demands from a new generation of workers that is more conscious of their rights and frequently using collective action against their employers.

Highlights include:

  • Groups such as the All-China Federation of Trade Unions are increasingly promoting CBMs as means to create a safe communication channel between employees and employers in which both groups can speak freely and on equal ground to reach an agreement.
  • Employers are encouraged to have internal discussions with their employees about the most effective ways to implement CBM’s, which will help facilitate positive labor relations.
  • The new social insurance law mandates the legal and governmental reform needed to effectively provide the social insurances mentioned above to employees.

The discussion also explored some of the challenges that Chinese factories face when implementing the social insurance law and CBMs, including a lack of government and employer support for both as well as no current legal regulation requiring employers to establish CBMs.

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