I CONDUCTED THIS RESEARCH from August 1996 to July 1997 and then again in the summer of 1999, the summer of 2001, and the fall of 2003. In addition to firm-level interviews, I also conducted interviews with labor lawyers in Beijing and Shanghai, trade union officials in Beijing, Tianjin, and Shanghai, Ministry of Labor officials and researchers in Beijing, local level labor bureaus in Tianjin and Shanghai, and development zone administrators in Tianjin and Hebei Province. The book also relies on primary source materials including internal reports from the Ministry of Labor, the ACFTU, and other government and academic organizations, as well as many public sources of information.
The firms included were varied by ownership type including a stockholding SOE (interviewed five times), an urban collective (twice), a rural collective (once, then it went bankrupt), three Sino-Japanese joint ventures (three times, twice, once), one Sino–Hong Kong joint venture (three times), three wholly owned Taiwanese firms (three times, twice, twice), two Sino-U.S. JV (both once) and one wholly owned American firm (twice). The visits were spaced out between 1997 and the fall of 2003. The firms were located in Tianjin, Shanghai, Jiangsu, and Hebei. Despite some variation across industrial sectors and products, the entry skill level of the average production worker was constant across all the firms, except for the American firms, which had higher entry-level requirements. The interviews at the firm were structured but open-ended and were conducted in Chinese, unless the manager was a foreigner. I interviewed the same managerial positions across all the firms when possible. These positions included the enterprise general manager, the human resource manager, the trade union chairman, and the highest-ranking Chinese manager. Informal interviews were conducted with other personnel when possible, for example, other top managers, secretaries, and production-line workers. In all cases except at the urban collective where I interviewed at the general offices, I was able to see the factory floor, the general working conditions, and the mode of work organization.
Interviewees were asked about the general structure of the firm, its products, markets, main competition, financial situation, and future plans. The remainder of the questions revolved around issues of labor management, including characteristics of the workforce, hiring methods, firing methods, implementation of individual labor contracts, collective labor contracts, salary system, insurance, and benefits. The structure of workers’ organization was also examined, including questions about the trade union, the Communist Party cell, the Workers Representative Council, and the settlement of labor disputes. The interviews in 1999 and 2001 returned to these questions and also asked new questions about the impact of the Asian Financial Crisis. More abstract questions about the nature of labor relations, the existence of conflict, tension between foreign managers and Chinese workers, and managerial attitudes toward workers were also explored. Individual interviews ranged between one to three hours.
These firms were not randomly selected. I was introduced to these firms through personal acquaintances. I asked to be introduced to firms that were involved in manufacturing, that employed at least two hundred workers, and that had a moderately low skill-level entry requirement. I did not go through any official procedures or approvals to attain the interviews.
A small number of firms limits one’s ability to generalize. When I do make general arguments about what I believe to be the general tendency in Chinese labor relations, I also employ other kinds of data to support these points. In chapter 4 where I discuss the trends in labor contracts and unionization, I use the firm-level data to illustrate general phenomena. Under better research conditions and with a less sensitive topic, survey research would have allowed more room for generalizing. Despite the small number of firms studied, however, there are at least four reasons to believe that these firms reflect individually some of the prevalent issues of contemporary labor relations in China.
First, because the Chinese government did not select the firms or approve the interviews in any way, I did not study handpicked “model” firms. Admittedly, any firm with horrific labor conditions would not have let me in to do research. These kinds of firms do exist in China, but it is extremely difficult for anyone, foreign or Chinese, to gain entry. My focus therefore has been not to investigate the very worst labor conditions that exist in China but rather to see how firms in the middle and upper-middle range structure labor relations.
Second, I visited these firms more than once (with the exception of a Sino-Japanese JV in Tianjin that refused further interviews, two Sino-U.S. JVs that were only interviewed late in 2002 and 2003, and the rural collective, which went bankrupt by the summer of 1999 after only two years in operation). Thus I was able to gain some sense of familiarity with the firms and managers. The ability to study the firms’ development over time was particularly helpful in tracing changes in labor practices as the firms adjusted to internal reforms or external shocks such as the Asian Financial Crisis. Had I chosen to pursue one-time visits to many more firms over the same years, I would not have had the same insight into these longitudinal issues. Even survey research with its superior methods of sampling and range would have been deficient in this respect unless conducted multiple times.
Third, the variation across nationality, particularly inclusion of Japanese and overseas Chinese-invested firms, makes this sample of firms more representative of the general makeup of China’s FDI inflows, in which large amounts comes from overseas Chinese and other Asian countries. There is no bias toward American and European firms, which would present, I believe, a too optimistic view of labor trends in China today.
Fourth, I have compared the data compiled from these interviews with information found in other interviews, extensive primary research of Ministry of Labor internal publications, Trade Union surveys and internal materials, scholarly research in English, Chinese, and Japanese, and articles in the Chinese media. I point out when the practices of the firms in the sample seem unusual in light of the other documentary research.
Given the constraints of small-n research, my focus in the book is to examine general trends as manifested at the firm level. Therefore in chapter 5, I examine how the labor contract system and the requirement for ACFTU monopoly representation are reflected in firm practices. I make no attempt to compare wages, benefits, productivity, or other quantitative measures across these firms because such a comparison would not be able to adequately resolve possible causation. For example, the American-invested firms that I visited had higher wages than the Taiwanese firms that I visited. The Japanese firms that I interviewed had lower wages and benefits than the American firms but were still higher than those in the Taiwanese and Hong Kong firms. This corresponds to the general impression of Chinese workers who almost uniformly believe that work conditions and compensation are best in American and European firms, adequate in Japanese firms, and far below adequate in Hong Kong, Taiwanese, and some other Asian-invested firms. However, I avoided focusing on this kind of comparison within my study because I had no confidence that national origin was the most important variable in producing the results that I gathered. The American and Japanese firms that I visited were also more capital-intensive, more concerned with the domestic market and their reputation in it, and more likely to be producing name-brand goods that could be tarnished through association with substandard labor conditions. These problems of multicollinearity cannot be controlled for given the small number of firms in the study. The variations that I do observe in labor contract practices and modes of worker representation are discussed at length in the text, with the firm-level observations backed up by other sources. I use the firm level data to provide greater detail and richness to these general trends.