International Solidarity (ITUC, ILO, UN, Union Statements)

Implementation by the People’s Republic of China of its obligations under the ILO Convention on Employment Policy, 1964 (n°122)
(Ratification: 17 December 1997)

ICFTU Comments to the ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR)
(31 August 2005)

With a view to informing the Committee of Experts on China’s implementation and adherence to Convention 122, the ICFTU is submitting this summary report of its major concerns regarding employment and related issues inside the PRC.

Article 1
With a view to stimulating economic growth and development, raising levels of living, meeting manpower requirements and overcoming unemployment and underemployment, each Member shall declare and pursue, as a major goal, an active policy designed to promote full, productive and freely chosen employment.
2. The said policy shall aim at ensuring that--
(a) there is work for all who are available for and seeking work;
(b) such work is as productive as possible;
(c) there is freedom of choice of employment and the fullest possible opportunity for each worker to qualify for, and to use his skills and endowments in, a job for which he is well suited, irrespective of race, colour, sex, religion, political opinion, national extraction or social origin.

1.         Articles 1 and 2: Employment for all available and seeing work

1.1      Background and statistics

The ICFTU recalls that in its 2005 Report, the Committee of Experts quoted a Government report according to which “China “recorded almost 8 million registered unemployed in the urban areas, of which 3.5 million were workers laid off from state enterprises. The total number of unemployed was estimated at 24 million, and the yearly new arrivals in the urban labour markets at 10 million.A continued annual level of economic growth of 7 per cent should allow for the creation of approximately 10 million new jobs per year, but the supply of labour is expected to continue to exceed the demand for years to come.”

While the progress that China has made towards creating employment opportunities has already been noted in the report of the CEACR in 2005, it should be pointed out that it is extremely difficult to calculate and assess the true extent of unemployment and employment in China. This is partly due to a lack of resources and inadequate information collation systems. However it is also due to continuing secrecy and a lack of transparency regarding many forms of statistics and potentially sensitive issues including those relating to employment.

For example, estimates of new job seekers range from 10 million to 15 million every year, as quoted by the official news agency Xinhua, while some unofficial sources have placed the number of people entering the job market as high as twenty-five million. This is in comparison with the creation of some 8 to 10 million new jobs. (Xinhua on 2 February 2004).  

In 2004 the unemployment rate was reported to have dropped 0.1 percentage point over 2003 making it 4.2 percent registered unemployment in urban areas, but several gaping holes in reporting and complexities in registering as unemployed make this number grossly inaccurate. Firstly, it measures only registered urban unemployment, secondly it does not record laid off SOE workers (registered and unrecorded xiagang) or those who have been laid off but are paid some form of minimal living allowance. Thirdly it does not calculate the approximately 150 million rural workers who only hold temporary or seasonal jobs in cities nor those forced to take early retirement, young people “waiting for work”, people on long-term “holidays” or “maternity leave” . Finally it does not consider rural unemployment or under employment nor the number of out-of-work migrants from the rural areas. According to the figures quoted in the CEACR report there is a total of 24 million unemployed which contrasts sharply with the estimates of some others which put the number far higher. In 2001 a Beijing research group (Development Research Center) reported a more accurate assessment of urban unemployment, said to be around eight to nine percent, contrasting with official figures then giving 3.6 percent. Other recent estimates put the figure at 10 -12 percent. In some post-industrial areas, unemployment is around 20 percent and rising and while many coastal regions have been able to create new jobs for both local and migrant labour other regions have a very serious unemployment problem. Some forecasts have estimated that the total number of people unemployed or "not fully employed” will be just under 140 million or nearly 20 percent of the working-age population by the year 2006, while other figures point to 30 percent unemployment and underemployment in rural areas.

As can be seen there is a plethora of statistics from which to choose and it is impossible to assess which is most genuine. There are in fact no fully accurate figures on unemployment, reemployment or employment and neither are there precise figures on unemployment for women or ethnic minorities, and therefore it is difficult to accurately gauge unemployment for various sectors of the population and hence the efforts of the Chinese government to remedy unemployment.

While ILO programs to help improve employment reporting and statistical measurements have had a positive impact, basic improvement in the reporting of employment related statistics cannot be achieved as long as they continue to be considered as internal information, an issue examined in more detail in the following section.

1.2      State secrets

State secrets in China cover a wide range of issues and areas of control. The scope of what is defined as a state secret covers not only issues concerning national security (such as military or political secrets) but also issues which have not been approved of by the authorities as public. The range even covers previously published material. These laws allow for an almost indefinite and extremely elastic expansion of the definition. In addition, material can be retroactively classified as a state secret if the authorities determine that the consequences of its disclosure have harmed or have the potential to harm the “security and interests of the state.” Chinese citizens have no power to challenge the classification of a state secret and once charged with a state secrets offence, their trial is generally held in-camera and certain restrictions limit the right of the defendant to adequately defend him/herself. The penalty for divulging state secrets is also an elastic one and can command the death penalty in especially serious cases.

Statistics are one of the areas most tightly controlled under the legislation and those regarding labour-related topics are very much included in the regulations. Employment (along with other labour related areas such as protests, strikes and structural reform) is the subject of two main regulations issued jointly by the State Secrets Protection Bureau. The first was issued in 2000 by the State Secrets Bureau and the Ministry of Ministry of Labor and Social Security (MOLSS), and the other by the All-China Federation of Trade Unions (ACFTU) and the State Secrets Bureau in 1996. This material was made public in October 2004 by Human Rights in China (HRIC). There are three main areas of state secrets; “top secret” (juemi), “highly secret” (jimi), “secret” (mimi). Finally there is “internal” (neibu) which, although it is not strictly a state secret, constitutes internal material which should not disclosed without approval” of the relevant organ.  The two regulations dealing with labour related-state secrets include highly secret, secret and internal classification.

The regulations state :

“Undisclosed unemploymentrates, social insurance fund revenue and expenditure forecasts” of the Ministry of Labour and Social Security and “composite information andstatistical figures held by the ACFTU concerning the unemploymentand livelihood hardships of workers” are “secret”. Statistics about the total number of “laid-off workers” (xiagang) in State-Owned Enteprises (SOEs) and the “distribution plans concerning basicliving guarantees and re-employment funds” for these workers are categorized as “internal”. Information on wages for those employed including “investigative materials and statistical data whichreflect the macroscopic situation of wage distribution inenterprises nationwide” are “secret” whereas information such as “revised wage policies and plans concerning enterprisesat the national level” is regarded as “highly secret.”

In addition, any objective assessment of the provision of benefits, pensions and other allowances for SOE workers or former workers is hampered by the fact that official corruption regarding such payments is also considered secret - “information concerning majorcases of embezzlement and the illegal use of social insurancefunds, and informants in such cases” is in fact “highlysecret.”

Labour unrest and protests by workers are covered by both the regulations and are “highly secret”.  For example in the MOLSS regulation;  “Composite nationwide informationregarding workers’ collective petitioning, strikes, andother major incidents” is classified as “highly secret”  while the ACFTU-issued regulation also  considers “composite information andstatistics held by trade unions on workers’ collective petitioning,strikes, demonstrations, marches and other majorincidents” as “highly secret”.

Furthermore, “plans and countermeasures for participatingin meetings of the International Labor Organizationand other important international meetings” are classified as “highly secret” by the MOLSS regulation and “work plans andcountermeasures concerning participation in the InternationalLabor Organization and bilateral and multilateralcommunications with trade union organizations of other
nations” are ranked as “secret” by the ACFTU.

More broadly, general policymaking on potentially sensitive issues such as national policies on social security, welfare and labour in general is also protected as a state secret - “statistical materials on labour protections” and “undisclosed implementation of major policymeasures and revised plans concerning labor and socialsecurity matters” are “internal”.

These regulations add to the pervasive paradigm of secrecy within the central, provincial and local authorities and the fact that many authorities are used to under- or over-reporting to fulfill quotas or to ensure praise and not reprisals and make it almost impossible to fully collate relevant information and monitor progress or compliance with Convention 122.

The ICFTU would suggest that in order for ILO programs to have maximum effect and sufficient feedback, the Committee of Experts urge the Chinese government to reduce its reliance on draconian and expansive state secrets laws. Instead the ICFTU suggests encouraging the free flow of information to help bolster employment policies at the same time as providing the ILO and other bodies to which China has reporting duties, with the ability to obtain clear, accurate and transparent statistics.

1. 3     SOE reform, unemployment and redundancy

One of the main causes of unemployment comes from the restructuring of the former state owned enterprises (SOE). The government is pushing ahead with increased restructuring since WTO membership – even before this, however, the number of jobs lost through restructuring has been phenomenal. The Ministry of Labour also reported that between 1997-2000 SOE jobs decreased by forty three million while private sector and non-state sector jobs only increased by 16.5 million.  Along with this has been the dismantling of job security, long term contracts and welfare for workers.
Although planned restructuring is playing a major role in the dismantling and restructuring of SOEs, a large proportion of SOEs are failing because of internal corruption and mismanagement. In many cases bankrupt SOEs are not able to fulfill their obligations to their workers or ex-workers. Many SOEs will lay off workers (xiagang) who are not classified as unemployed as they are still contracted to the company (this classification stays for three years when they are re-classified as “unemployed”). The SOE is then responsible for their living allowances and other benefits while they are not working. An obvious contradiction underlying this system is that the companies lay off workers to reduce unit costs in the face of increased market competition and are often unwilling or unable to pay the layoff allowance that workers are entitled to - despite the fact that local governments are supposed to make up any shortfall in living allowances and benefits.  In many cases monitored by labour groups it is clear that the non-payment of such allowances to xiagang employees is a major cause of industrial unrest and such unrest can often escalate into protests involving several tens of thousands of workers. In many of these instances, the reasons behind the failure to pay allowances, pensions, medical expenses and sometimes even wages is due to management corruption.

When workers do attempt to recover missing benefits and call for investigations into corruption or mismanagement they can be dismissed or detained by the authorities. Official silence over corruption is bolstered by the fact that information relating to “majorcases of embezzlement and the illegal use of social insurancefunds, and informants in such cases” is “highly secret.” 

In order to attract foreign investment and much needed injections of cash SOEs are shedding workers at a remarkable rate – one which the private sector creation of new jobs has yet to catch up with. In addition, many newly transformed SOEs take advantage of the new emphasis on “market” economics and the lack of job security asked for by the government and rehire cheap labour after laying off older workers originally employed on relatively good terms. Many workers laid off from SOEs find themselves out of a job while watching new private investors transform the SOEs into a profitable business and employ cheaper migrant workers on short terms contracts on much lower wages. The ICFTU is of course aware of the fact that similar trends in restructuring also exist in many other countries, both industrialized and developing. The problem is however amplified in China owing to the sheer size of the country and the massive scope of restructuring; it is also compounded by the various restrictions of workers’ rights prevailing in China.

While the changes taking place in the state owned enterprises will be painful to many adversely affected, the ICFTU would hope that the government can ensure that all xiagang and formerly unemployed workers receive the payments and allowances to which they entitled. It also hopes that corruption and mismanagement of SOEs and former SOEs is neither unnoticed nor unpunished and that workers taking management to task for failure to provide benefits or calling for investigation into alleged corruption are given adequate opportunity to have their concerns dealt with and their grievances redressed. It would also like to see the government take seriously its responsibilities to the millions of laid-off workers and their families and ensure that living allowances and social security schemes can reach them and provide a sustainable living.

Foreign Investment and employment

In addition, there has been growing concern over the lack of oversight and employment regulation in the private sector, which includes the majority of foreign direct investment (FDI). This includes poor working conditions, long hours and low wages.   Many claim that FDI is given preferential treatment at the expense of Chinese workers. However, much FDI actually consists in taking over existing responsibilities, buying existing assets and SOEs, as opposed to the creation of wholly new enterprises and jobs.

The enforcement of legislation governing wages, working hours, contracts and OSH requirements is often ignored by many employers but the situation is especially bad in the private sector and often particularly in the Special Economic Zones. In many instances, especially in the south, wages are higher than elsewhere in the country, but there are also claims that local authorities have been offering incentives which reduce heavily the necessary benefits, overtime payments and other related requirements usually called for by domestic laws, thus encouraging sweatshops, low wages and the continuance of unskilled labour as one of the “attractions” of investment in China. While FDI has created many jobs, much of the FDI attracted is cost-minimized and encourages the creation of labour-intensive low-paid jobs. Indeed the majority of investors favour China in particular not just because of its market potential but also for its extremely low wages and government incentives as opposed to rule of law, transparency and educated workforce favoured in some other developing countries. It cannot be denied that China has an abundant supply of cheap labour but it is yet to be seen if government policies are encouraging the development of this workforce (both in terms of wages, benefits, skills, training and education level) as opposed to its continuance in its bid to attract FDI. While China claims it wants to attract investment which encourages the growth of a skilled workforce and its tertiary sector, the actual reality of its policies on the ground reveals a very different development.

Employment training and education

The lack of training for workers is another major obstacle to improving the opportunities of decent work for the majority of workers in China. Chinese legislation states that workplaces must provide training to employees, but many use funds set aside for training on managers, leaving little or none for ordinary workers. 

In particular migrant workers remain one of the most under educated and untrained sectors of the labour force – a recent survey (August 2005) by the Ministry of Labor and Social Security showed that  average levels of education and training were also low: 83 percent had only reached junior middle school level and 72 percent had received no employment training at all. In the construction industry, 76 percent of all workers are migrant (some 32 million), but few have received employment training. Problems are now coming to the surface as the south of China faces a shortage of skilled and trained workers as wages increase and low-skilled jobs move inland in search of ever cheaper labour and ever more uneducated workers

The role of foreign investment will continue to grow in China and the ICFTU suggests that the ILO call on the Chinese authorities to ensure that FDI encourages positive domestic growth and improved labour conditions by following international guidelines such as the ILO Tripartite Declaration. The ICFTU also hopes the ILO will strongly support training and education opportunities for “ordinary” workers in China and in particular efforts to raise the status and employment opportunities for migrant workers.

2.3 Social security/pensions and medical care

As mentioned, the “undisclosed implementation” of “plans and measures” and  “statistical materials” concerning social security and living allowances for laid off  workers, are considered internal and this ensures that the real status of  reforms to the social security system remains unclear – it also makes it almost impossible to gauge how many workers are receiving newly instituted benefits.

While there has been some improvement in the coverage of both urban and rural schemes for unemployment insurance and related provisions, efforts to improve the social security systems have generally been poorly implemented and piecemeal. In many areas the authorities still rely on SOEs for provision of benefits to laid off workers – despite many SOEs failing in their responsibilities - and in some urban areas there have been some recent advances but such schemes still only cover a small number of workers and their families.

Despite low wages and restrictions on the choice of work, previous forms of employment in China (through one’s work unit or “danwei”)  gave many workers full coverage in the most needed areas of education, medical coverage, pension, maternity and living allowances in case of layoffs or disability. The concept of state provision for medical and other social security benefits is now being replaced with a “pay as you earn” system which puts the onus onto the worker and not the state [except for those already laid off from SOEs who are still covered by SOE provisions -generally being phased out]. This has meant that many workers fall outside coverage – they do not belong to a pay as you earn system, nor do they receive benefits from an SOE. This includes most rural residents, most migrants (although this is beginning to change) and many in the private informal sector or those on short term contracts.

In the past 10 years or so there has been extensive progress towards establishing a comprehensive social security system to replace insurance coverage by the state sector. There are both “pay as you earn” schemes with individual accounts and pooled resources.  Social security schemes now cover the five main areas of pensions (endowment insurance, unemployment insurance, medical insurance, and industrial injury insurance and maternity). A major aim of these reforms was to increase the number of workers covered (and not just those in SOEs), however despite claims of extensive coverage and success in reality they are failing to produce the results that were hoped for. The reluctance on the part of the government to classify workers as “unemployed” - and therefore to register them as unemployed is partly believed to be because of inadequate social security resources. However the main cause of the relative failure of these reforms resides partly in corruption and mismanagement and partly in a lack of resources entering these funds and the lack of national coverage [as opposed to piecemeal and localized initiatives]. Indeed mismanagement and even embezzlement of labour insurance funds by company managers have constituted widespread abuses. Ample evidence exists of such cases, as well as of repression of collective workers’ protests against such practices, as evidenced by successive issues of the ICFTU’s Annual Survey of Violations of Trade Union Rights (available at www.icftu.org/survey/).

An effective social safety net that covers all workers is essential to managing industrial restructuring of the state owned sector in China and to ensure that workers in privately owned companies received adequate coverage in the event of retirement, illness, maternity, injury and unemployment. At present this system is far form adequate with millions of workers – predominantly rural and migrant workers falling through the net. The ICFTU hopes that the ILO will further encourage the Chinese government to invest more money and legislative weight towards creating a national unified system that covers workers of all class and geographical areas (including the rural poor and migrants) as soon as possible. It also hopes that information relating to the creation of such funds is made available to the ILO and similar bodies and in particular that “information concerning majorcases of embezzlement and the illegal use of social insurancefunds, and informants in such cases” is also made available and adequate safeguards preventing future misuse are established.

Employment Centres

SOEs are required to establish re-employment centres to assist their xiagang workers. These are now being phased out and only a very small minority of workers made redundant by SOE’s find help in re-employment centers set up by their company, where they can receive up to half their former salary and some training for new employment. Previously it was claimed by the government that some 95 percent of all laid off SOE workers had registered at re-employment centres and all but 6 percent of those registered were receiving basic living expenses from their former employer. These figures appear to be in contrast to the increasing number of protests by laid off workers who claim not to be receiving any benefits or allowances from their former employees (see below). While new labour centres are being developed these only cater to small groups of urban workers.

The ICFTU emphasises that access to the services of public employment offices by all workers including migrants is a key part of a successful labour market policy

1.4 Wages and employment

The quest for a living wage while employed

There have been undeniable and very welcomed increases in the standard of living for many in China, yet there is still a considerable number of people who, despite working way in excess of the maximum number of working hours (in many cases much more than even the maximum amount of overtime allowed under Chinese law) do not receive a living wage and cannot afford to keep a family above the poverty line on such wages. In the cases of migrant workers employed in the private sector in unskilled jobs, most cannot afford to keep their families in the cities and leave them at home to survive on the farm or in an extended family network. Many wages for those employed at the lower end of the social scale do not pay enough to provide food, rent and other basis necessities for a family. In the countryside the estimated number of those living below the international poverty line is at least 100 million. Only a few people can afford the new symbols of status such as expensive cars and foreign holidays. Most can still barely afford daily necessities, let alone savings, education for their children and medical costs in the event of an illness.  

According to some figures, overall inequality in disposable income (the Gini index) increased from 28.8 to 41.6 in the period from 1981 to 1999 giving China an income disparity worse than that of both India and Indonesia, at 34.3 and 32.5 respectively and this difference is growing –some estimates now put the figure at closer to .5.

While China is developing its economy on the backs of its massive and cheap workforce, the ICFTU believes that sacrificing workers' rights to achieve economic competitiveness is not an effective or sustainable strategy. Already we are seeing companies move to countries with even lower wages such as Cambodia and Vietnam.  A priority must be to shift to a more balanced and qualitative growth structure which provides sustainable economic growth and employment for the majority of China’s workers. This is based on ensuring that priorities for growth are adapted to meet the needs of workers and they are not ignored in order in favour of foreign investment or a growing middle class, The ICFTU hopes that the ILO will further encourage a more even spread of resources and opportunities and that the growing imbalance between rich and poor, inland and coastal and east and west in China is halted.

1.5 “Full and productive employment” and the non-payment of wages

It has been estimated that in August 2004, over 360 billion Yuan (about $US 45 billion) in unpaid wages remained owed to migrant workers. In the state sector the problem is especially serious for workers in failing, near bankrupt and bankrupt SOEs – including those in the process of restructuring when previous promises and wages are not honoured by the new management. In some areas – especially regions where heavy industry was formerly concentrated - missing wages from SOEs is rife. For example in the northeast of China, protests over wage arrears are a regular occurrence (see below). The provincial authorities are complicit in the problem by ensuring that there is a culture of impunity for enterprises withholding wages and other benefits (often because of the intertwining of SOE management and local officials).  

In the private sector those affected are mainly migrant workers.  According to official sources, China has an estimated 94 million migrant workers who are owed a total of over 100 billion Yuan in back wages. The problem is most severe in the construction industry which accounts for over 70 percent of the total amount owed. In the construction industry part of the problem comes from poor employment practices (such as the employment of workers illegally and with no contracts) and a lack of clear accountability in legislation. Migrants are often recruited by an individual contractor who arranges for a group of migrants to work on a project. There is then a legal ambiguity about who has actually employed the workers and who is liable for their wages – especially when, as is all too common, the sub contractor disappears and the project company refuses to pay wages directly as it claims it has already paid the contractor the amount.

The ICFTU welcomes the launching by the government of a major campaign at the start of 2004 to seek repayment of missing wages for migrant workers and to assist workers in struggles to seek payment.  However, although the government has been very active in pursuing cases of missing wages and has recovered a large amount of wages the successes the government has consistently reported cannot provide the full picture.  According to officials the campaign has met with every success – in 2004 employers across the country had paid out approximately 14.8 billion Yuan (about 1.79 billion US dollars) in overdue wages to migrant farmer workers, over 90 percent of the 16 billion Yuan (1.93 billion US dollars) owed in 2003, while employers paid 22.89 billion Yuan (2.76 billion US dollars) in overdue payments to migrant workers and construction teams in the two months leading up to Chinese New Year in January 2004 - or about 72.3 percent of the total accumulated. By August 2004, official sources were claiming that unpaid wages in 2003 for migrant workers had been essentially recovered.

However, the number of migrant workers and the wages repaid only apply to migrant workers with contracts, while a large proportion of migrants in fact work without written contracts. Indeed some estimate that up to 90 percent of migrants work without contracts, in violation of China’s Labour Law. In addition there are too few penalties for not paying wages and many companies can simply shrug off any limited fines imposed.

1.6 Occupational Health and Safety

While Convention 122 does not specifically address the issue of occupational health and safety it does call for active policies designed to promote “productive” employment.  Productive employment surely does not mean employment with such high levels of human wastage as in China. Many thousands of Chinese workers die needlessly every year because their workplaces ignore and flout health and safety legislation or because they operate illegally. For example, 2005 has seen some of the nation’s worst mining disasters in years. In the first half of 2005 mine accidents killing more than 30 people have doubled over the same period in 2004 - from January to July 2005 there were six such disasters killing 485 workers compared to three similar cases in 2004 killing 106 workers.

There is a lack of consistent and regular monitoring of standards throughout China because of a lack of financial and personnel resources. In addition official collusion at the local level and widespread corruption are exacerbating the problem, as many localities turn a blind eye to problems or in some cases are part of the management or ownership of the enterprise in question. A case in point is the recent Daxing mine disaster in Xingning city, in the southern province of Guangdong where local officials were shareholders in the illegally operating mine. The mine had been operating illegally when it flooded on 7 August 2005 killing some 123 miners. It was later found that several shareholders were also local officials and that the owner was also a policeman – along with several others who had reportedly bought their “police” positions – who unsuccessfully spent over 300 million Yuan in covering up the disaster after he forced the miners to carry on working at night after the pit was closed down on safety grounds.

2. “Fullest possible opportunity”

The ICFTU warmly welcomes the very recent ratification (on 28 August 2005) by the Standing Committee of the National People's Congress of ILO Convention 111 concerning Discrimination in Respect of Employment and Occupation. It looks forward to reading in due course about the effect given by the Chinese Government’s to this key-ILO instrument. In the meantime, however, it considers it essential to indicate how current patterns of discrimination in treatment and opportunity in employment for large segments of the country’s workforce are incompatible with the principle of “fullest possible opportunity” specified in art (1) (c) of the Employment Policy Convention, especially since many of these patterns have in recent years been increasing in scope and not decreasing, as explained below.

2.1 Sexual Discrimination

Redundancy and reemployment

There have been great advances for women in China since 1949 but recently some of these advances have been steadily eroded. In the recent economic reforms in the state sector women have been the biggest losers and are generally the first workers to be laid off or dismissed. Indeed, throughout the past decade women have suffered disproportionately from lay offs and it is estimated that some 70 to 80 percent of laid off workers are women, especially in the northeast of China.  In many instances the women workers are not technically laid off but are asked to take prolonged “rest” from work or are forced into early retirement. Regulations (RegulationsConcerning the Arrangement of Surplus Workers of the State Owned Enterprises) governing SOE reform allow for women to be forced to “retire” at 40 or to take enforced two year maternity leave without pay. As well as depriving women of their equal right to employment, such discriminatory practices mean that women have far lower pensions, fewer opportunities to save and lose their access to child care, medical care and other allowances.  In some cases, SOE management believes that, because many couples work for the same SOE (especially in the industrial cities where the entire local labour market is dominated by an SOE), it is best practice to lay the women off first so that they can care for the family, while their husbands continue to earn a wage. In addition local authorities perceive that rising unemployment among men poses much more of a threat to social stability than a town of unemployed women who work in the home, who are not registered as unemployed and are therefore also not included in the in official statistics on unemployment for that region.

In terms of re-employment, women workers also find it harder than men to find new jobs. Some figures show that about 75 percent of laid-off women were still unemployed after one year, compared with the 50 percent of men still unemployed after one year. Most employers discriminate against older women in favour of young women or men. Enterprises are keen to look for men or young women who are freer to undertake overtime, cost less and are less likely to be needing child care, maternity benefits or flexible working arrangements.  

Another cause of the discriminatory firing and hiring policies is because of the restrictions in Chinese law on the types of work not acceptable for women and other clauses in the legislation governing women’s employment. Older women are seen to be more expensive because of the legislation outlining various benefits and compulsory rest periods for women, so most enterprises prefer hiring very young female workers.  Labour laws and laws such as the “Law on Protection of the Rights and Interests of Women” provide restrictions for the type and duration of work women can undertake during menstruation, pregnancy, and breastfeeding. Certain types of work are forbidden to women during these periods and some work is restricted at all times, including for example work at high altitudes or extreme temperatures. They also put the retirement age for women at 50 compared to 55 for men. Leaving aside the huge sectors of the economy where women are simply denied their statutory rights and benefits, there has been increasing debate on the negative effects of such protectionist legislation that emphasizes women’s physical and biological differences with men. These laws, initially designed to protect women, are now helping to perpetuate the differences in employment and opportunities.

Despite the many protections outlined in regulations, some of the most basic ones are disregarded by most enterprises, especially in the private sector. For example, for many women, becoming pregnant entails the end of their working life at a particular factory. Laws regarding non-termination of work contracts for pregnant and nursing mothers are often not enforced and women are dismissed. In terms of social security, while there has been some real progress towards the creation of provincial or even national welfare systems which would provide benefits such as maternity pay and child care, at the moment, until the system is more comprehensive, industries or enterprises with a high proportion of female workers often see their choice as being to either deny such benefits to their female employees or to dismiss them in favour of men or women who do not ask for these benefits.

These practical problems are compounded by a growing move away from the post-1949 emphasis on sexual equality towards a more traditional and imbalanced view of women as being better suited to certain types of jobs and to being second class workers after men. Work such as cleaning, repetitive factory work requiring “nimble” fingers, service industries, primary school teaching etc is seen as women’s work. This is having an effect on the retraining and reemployment of those lucky few who are reemployed. Many will leave a factory post at an SOE and when entering a retraining scheme will find that the ones open to them often consist of mainly “female” occupations such as retraining as a hairdresser or a maid.

Lower pay for those in employment

Discriminatory hiring practices, unequal educational opportunities and cultural influences help ensure that many women are forced to take the lowest paid jobs in the private sector. Indeed, despite national laws to the contrary, discriminatory hiring practices appear to be increasing and enterprises discriminate by both sex and age – leaving older women the least favoured. For professionals and white collar workers, there is a distinct preference towards male graduates while young non married women are preferred for assembly line posts thus increasing gender segregation of work. Recruitment advertising still continues to emphasize this division of work and recruiters state their preferences for males or females depending on the type of work, often asking explicitly for unmarried women. For example, despite a growing labour shortage in Guangdong province (as companies travel inland in an ongoing race to the bottom), employers are still asking for young woman workers. According to a Labour Bureau official in Dongguan for example, in 2004, of those Dongguan enterprises that were facing shortages last year, 75 percent were looking for women, and 60 percent were trying to find women aged 18 to 25.

The ICFTU recommends that legislation be adopted that expressly prohibits gender discrimination at work, both direct and indirect and that these laws and existing regulations are adequately enforced and encouraged. It further recommends that the ILO encourage the Chinese authorities to seriously consider and counteract the negative effects on women of current economic reforms and to ensure that women are given equal education and training opportunities (especially in rural areas where inequalities are extreme). In addition to enforcing existing labour laws, women should be given the means to ask for redress against discrimination and unfair treatment in employment and retraining. Also desirable is the promotion of women’s right to freedom of association at work, their increased involvement in worker organisations and government bodies and their right to strike.  In addition the ICFTU also recommends the publication of gender specific employment related statistics.

2.2 National extraction and social origin

2.2.1 Ethnic Minorities

In the Xinjiang Uighur Autonomous Region (XUAR), it has been alleged that in 1949 around 90percent of Xinjiang's population were now ethnic Uighurs [a central Asian Turkic speaking group] compared to less than half in 2004. The rising numbers of Han immigrants [China’s largest and most dominant ethnic group] to the XUAR has given rise to claims of cultural assimilation and economic marginalization. The development projects in progress (and the ‘go West” campaign in general) are mainly infrastructure projects which benefit the urban Chinese sector of the population and are designed to bring in revenue to the central authorities. A byproduct of this is to provide employment for thousands of Han Chinese who are given substantial incentives to move to XUAR. This had led to locals arguing that the reforms have brought little opportunities for ethnic Uighurs who instead are becoming marginalized and pushed out by more affluent Han businesses and rising costs. Local unemployment in XUAR remains extremely high and is rising although there are no specific figures published by the government for unemployment in XUAR. Problems of education for Uighurs in their own language and the lack of adequate schooling for Uighur children also contribute to the imbalance in employment opportunities and there is little in the way of major poverty alleviation or minority development programs.  

In the Tibetan Autonomous Region (TAR) and surrounding Tibetan autonomous prefectures and counties, there are frequent claims of discriminatory employment practices and economic opportunities which favour the Han Chinese and disadvantage Tibetan nationals. Unemployment among Tibetan youth has been put at some 70 to 80 percent, while the disparity in Chinese language skills required for well paid jobs perpetuates the already skewed system of preferential recruitment against ethnic Tibetans.

Economic tensions are also rising in other regions between ethnic minorities; for example some Hui minority people in rural inland areas such as Henan province have been caught up in violent disturbances with the local Han population -  many complaining of not being given any real economic opportunities. In the south west of China drug addition, prostitution and trafficking among the border areas of Yunnan province reveal similar stories of unemployment among the 25 local ethnic minorities in Yunnan.

The ICFTU considers there is a very strong need for employment policies which actively try to redress the imbalance between racial groups in China. It further believes that a careful evaluation of large development projects in the west of China is urgently required. It recommends that such projects should not be discriminatory in either design or implementation and that ethnic minorities concerned have full and equal access to the economic and social benefits such projects are meant to bring. Energy exploitation initiatives in ethnic minority areas should similarly benefit the local population and local industry.  The ICFTU furthermore suggests that statistics and other relevant information on the particular employment/unemployment patterns among different ethnic groups in China should be produced and published and that the secret classification of “composite information” on unemployed workers held by the ACFTU be declassified and such material made available as such material could greatly enhance efforts to redress severe imbalances on either ethnic or racial grounds in employment policies and access to the labour market.

2.2.2 Migrants

There are some 150 million rural workers seeking or with employment in the cities and this number is growing. The number of new migrants seeking work is increasing by almost 6 to 10 million every year, depending on which figures are quoted.  These new rural workers generally do not have the training, the education or the residency permits needed to compete for the better, registered jobs in urban areas.

Workers from the countryside are discriminated against in several main areas. A first element resides in the extensive restrictions on freedom of movement brought about by the “Hukou” system. The Hukou system is a form of household registration whereby each family member is registered according to his/her family residence. Rural residency can only be changed with great difficulty. The majority of rural residents, despite living in urban areas, have to keep their rural status which is also passed onto their children. It is now estimated that there are some 100 plus million people who are living in areas different from their registered status. To reside illegally in an urban area for example usually means being illegible to receive benefits such as education, access to medical care, housing and other state services.

Owing to the “Hukou” system, rural workers only hold rural residency status which disqualifies them from freely seeking and obtaining the better paid opportunities in the cities unless they can obtain temporary residency and work permits. Employment opportunities are initially often – but not always – obtained through a labour recruiter who travels to villages and rural towns seeking groups of potential migrants to work on projects in the cities. In many cases the potential migrants have no real way of knowing what type of work they will undertake and if they will be paid what they are promised - often promises fail to materialize. Many leaving the countryside often resort to working illegally without permits or residency, which means that they are employed without written contracts and without any benefits such as medical care. They are more vulnerable to arbitrary dismissal, illegal working conditions and non-payment of wages.

Cultural discrimination against migrants, a lack of educational opportunities in the countryside and the ease with which they are often exploited makes them eligible merely for low paying positions in labour intensive industries. Although this situation is being remedied with increasing wages and demands by migrants in the south, too many of them are still employed at the lowest rates of pay.

2.2.3 HIV, Hepatitis B and other discriminatory practices

Many other discriminatory employment practices remain the norm creating unequal opportunities for employment for other sectors of the population including those suffering from chronic or acute illnesses such as HIV or Hepatitis B. The ICFTU welcomes the recent newly drafted pilot regulations and revised medical examination rules for civil servants encouraging non discrimination of Hepatitis B sufferers applying for government posts, but notes that chronic or acute sufferers (those who may exhibit symptoms) are still denied employment with many government offices and private firms – indeed cases of factory workers testing positive for Hepatitis B being sacked have also been reported. Other discriminatory practices, including asking for female applicants with “regular features” for office workers, applicants over a certain height and with no physical deformities for civil service posts and similar unfair practices continue to be commonplace in both government recruitment and private recruitment. The ICFTU strongly recommends the phasing out of such practices.

3. Article 3:  Consultation and Co-operation

According to the Statement adopted by the ILO-sponsored China Employment Forum in 2004, one of the main aims of future work on employment is “Strengthening tripartite social dialogue as an important mechanism for preventing and resolving conflicts, contributing to employment promotion and fostering social stability, as well as for enhancing enterprise performance” . Convention 122 also calls for dialogue and the participation of those affected by policies. However there seems to be no real movement towards including workers in the drafting of new laws and the shaping of government practice. Indeed the exclusion of workers from the decision making extends to the prohibition of independent worker-organized and led trade unions and the prohibition of effective freedom of association. While workers are classed as the “masters of the state”, in reality lower paid workers and farmers in search of a job are increasingly marginalized in a society where the gap between the haves and the have-nots is increasing.

Despite some progress in removing tax and other burdens from the rural population, local corruption and lack of opportunities (including education) ensure that the rural poor remain the fodder for China’s factories. Ordinary workers in SOEs and private enterprises are being ignored by the local and central bodies when they attempt to demand respect for their rights. Many individual workers end up becoming “petitioners” who travel to the capital in the vague hope of influencing an official to hear their case.

The China Employment Forum also stated that “Equal employment opportunities for all, respect for workers’ rights and full employment are of primary importance in achieving social justice, economic development and world peace.” However despite this rhetoric China has still not ratified the fundamental conventions of the ILO in respect to worker’s rights. There is no effective freedom of association, the right to strike is not clearly guaranteed and only one, government-sanctioned, trade union is allowed to operate – the All-China Federation of Trade Unions (ACFTU).

Restrictions on worker rights and the role of the ACFTU are partly driven by the government’s fear of losing control of its decentralised organs but also because of fear that such rights may lead to an erosion of its low wage advantage for investors. For example, at the same time as ratifying Convention 111, the NPC Standing Committee also passed a revised Security Administration Punishment Law outlining administrative penalties for public order offences. This regulation includes detention for the new offences of “instigating” and “masterminding” illegal public demonstrations, thus bringing a further sanction down on potential labour disputes and the workers involved in them.

Cases of arrested workers who have attempted to have a say in the reform of their enterprise or local policies are all too common. The lack of participation in the shape of economic reforms by workers and the lack of legal channels for their grievances help give rise to the growing number of labour disputes and labour unrest throughout China – from the industrial SOE heartlands to the special economic zones of the Pearl River Delta – the story is the same.

The number of violent protests and large scale disturbances by the dispossessed and those affected by large scale corruption is increasing year on year, not decreasing.  Figures for labour disputes vary according to sources and definition of a dispute – in 1999 it was reported that some 198,000 disputes occurred while in 2000 there were 327,152 officially reported cases, Out of this number, 24.2 percent took place in SOEs, 20 percent in so-called collectively-owned enterprises, 15.5 percent in foreign-invested enterprises and 14 percent in private Chinese-owned companies. In 2000 there were some 8,247 collective actions. Cases involving alleged corruption or economic reforms leading to the non-provision of owed pension payments, social security payments or wages make the majority of disputes.

The right to freely choose employment and to enjoy employment should extend to ensuring that workers are able to express their dissatisfaction with working conditions and to hold legal actions against abuses or mismanagement. Currently although strikes are not expressly forbidden in Chinese law, the right to strike was removed from the Chinese constitution in 1982 and there are many cases monitored where strike leaders have been detained for their involvement in industrial action.    In addition, the use of administrative punishment - “re-education through labour” continues to be used against labour activists and others protesting state policy or practice. A worker can be assigned to up to three years re-education through labour (without recourse to the criminal justice system and on the recommendation of their employer) simply for being classified as one of those who "have a job but for a long time refuse to labour or destroy labour discipline, who ceaselessly and unreasonably make trouble, and who disturb the order of production or work”. While a law is currently being drafted to replace “re-education through labour”, the ICFTU remains concerned that the new law will mirror the current system and will continue to support a parallel penal system giving defendants no right to legal defence or safeguards.

Collective bargaining

The recent government “white paper” on employment encourages the ACFTU to conclude “collective contracts” in order to protect workers’ rights, and the labour law permits collective consultation and contracts to be concluded between the ACFTU and the management. However despite greater opportunities for collective bargaining and the obvious need for worker protection for many workers – including migrants – there has been little progress towards any form of genuine collective bargaining.  Instead the ACFU continues to “represent” the workers to management and government structures without seeing the need to discuss, inform, listen to or be guided by the workers who still have little say in policy.  In the private sector, where branches of the ACFTU are largely inexistent, workers denied the ability to organise independently face almost insurmountable obstacles to collective bargaining and representation.

The ICFTU very much hopes that genuine collective bargaining will in the future be encouraged by the Chinese authorities as a means of dialogue and representation. It also hopes that workers, including those in ethnic minority regions will be able to participate more in the shaping of China’s economic future and will be treated as the central underpinning to any economic success the Chinese government envisages. The ICFTU further expresses the hope that freedom of association will stop being seen as an obstacle to economic reform but instead will be viewed as a crucial element in any long term successful economy. Freedom of association has a fundamental role to play in the shaping of local and national policies, the smooth implementation and monitoring of labour laws and regulations, increased productivity (as evidenced by many other countries) and as an essential voice for the workers in all matter pertaining to employment.

4. Conclusion and recommendations

There are very serious omissions in Chinese government statistics and other information on employment issues relating to Convention 122. ILO programs to improve labour standards, strengthen the unemployment benefits’ system and strengthen policies relating to employment can never be fully realized until China signs all core ILO conventions and withdraws its reservation to the International Covenant on Economic, Social and Cultural Rights on the right to form independent trade unions. Until then Chinese workers – despite marked improvements in many areas – will never be able to freely choose their employment and will not be in a position to help raise standards themselves contrary to the aims of Convention 122. The ICFTU is concerned at the regional imbalances and social problems caused by persistent poverty for the rural and urban poor. It recommends that adequate labour market regulations be enforced to protect workers from the negative effects of economic reform and against the excesses of the “market” system. This will by necessity include the need for independent trade unions and the removal of the extensive state secrets legislation regarding employment, social security and economic reform policies.

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