Economic transition, Corporate Governance and Implications for Employment Relations in China

Abstract

China’s economic transformation following its open door policy in 1978 has led to the informalisation of employment and the associated proliferation of forms of employment. These employment modes represent not only the employers’ strategy to address risks vis-à-vis declining profitability due to fierce competition, but also the government’s attempt to alleviate employment pressure. Nevertheless, state intervention remains a defining feature in employment relations, despite a significant shift from the dominance of a state sector economy to a private sector economy in the last four decades. These purposeful choices undermine not only workplace collectivism, but also workers’ ability to participate in the regulation of employment relations as part of corporate governance. Political-business alliance further weakens the institutional and organisational position of the workers, with serious implications for corporate ethics, responsibility, and risk management as important elements of corporate governance.