Although equal pay for equal work has been clearly incorporated in the law in China for several decades, its implementation faces considerable impediments. This article investigates how labour market transformation and state sector reform in China have led to new forms of labour market segmentation that have undermined gender equality and created barriers to upholding the equal pay for equal work principle. Using the dual-track employment and remuneration system in the public sector as an example, the analysis illustrates the absence of implementation mechanisms or a remedial channel to support this principle in the Chinese context. It shows how the values and norms used in wage-setting in China impede the implementation of equal pay for equal work and in turn its extension to the notion of work of equal value mandated by the International Labour Organization in its Equal Remuneration Convention. It concludes that unless fundamental changes take place at the institutional level with strong state intervention, the International Labour Organization principle will remain a high-level inspiration rather than an enforceable law that could benefit those who are disadvantaged in the labour market.