Employment Relations in China: Impact of Cultural Factors and Statutory Regulations

Employment Relations
in Asia
A Case of China

Executive Summary
China is a communist party-led state with its capital city in Beijing. Its administration is divided into three; Sheng (23
provinces), Zizhiqu (5 autonomous regions), and Shi (4 municipalities). The Establishment of People’s Republic of China was
on 1St October 1949. Its legal system is such that the civil law systems for the soviet and continental European influences its
own; statutes interpretation power is retained by the legislature. In 2017, the passing of the General Provisions for China’s Civil
Law by the National People’s Congress was the first step in the adoption of the new civil code. The executive branch consist of
President XI Jinping and his Vice president WANG Quishan. The head of government include; Premier LI Keqiang, HAN Zheng
the Executive vice Premiers, SUN Chunlan, LIU He, and HU Chunhua. The Judicial branch has highest court(s) and
Subordinate Courts.
Over the years, the economy of China has undergone many reforms that has shaped its today’s economic state. The most
significant reform was the shifting from the closed and centrally planned system to market oriented system in late 1970s. It has
become one of the largest global trader and has restrictions to support its key sectors. For this reason, it’s one of the largest
exporters but it has restrictions on importations. China has a population of more than 1.3 billion, with more than half of them
living in the urban areas. The economic growth for this economy has been high. Its unemployment rate has been low at an
average of 4% but this has been criticized as it doesn’t include the 270 million immigrants who live in China. This economy
creates millions of jobs annually but not sufficient for there are 8 million fresh graduates every year.
Employee relationship in China is impacted by factors such as guanxi where networking is considered more important,
Confucianism where people from certain social class are considered superior, and humanism where the use of force in the
workplace is criticized. The China’s statutory clearly states the rights of the employees and the role of business owners and other
shareholders; it explains their contractual relationship obligations. Good industrial relations is noted to improve economic
performance; the federation of trade unions is centralized and the state is in support of state owned enterprises. Inter-firm
relationship is where businesses learn from each other and create good relationship. China has realized the importance of
vocational education and is on constant development. Businesses in China are expected to maintain a good corporate governance
as mandated by the law. The labor law in China defines the obligations of the employees, employers, and all the shareholders.
There are many people in China who are in union groups. the role of unions is to represent workers as an individual worker
cannot stand on his/her own.

Introduction
The China’s Demographic Data
The July 2017 estimate for population in the China was 1,379,302,771. This total
population presents an overall measure of prospective impacts of this country within its region
and on the world. There are several ethnic groups in the China; 91.6% are Han, 1.3% Zhuang,
7.1% others (including; Manchu, Hui, Yi, Miao, Uighur, Tibetan, Tujia, Dong, Mongol, Yao,
Buyei, Korean, Bai, Dai, Hani, Kazakh, Li, and other nationalities) (Cia.gov 2018). As at 2017,
China had a population growth rate of 0.41%. As at 2018, 59.2% of the total China population
lived in the urban areas with an annual urbanization rate of 2.42%. The official language used in
China is the standard Chinese/Mandarin, Yue, Wu, Minbei, Minnan, Xiang, Hakka dialects, Gan,
and minority languages. Many couples in China were restricted by the 1979 mandate from having
more than one kid but this was loosened as at 2016 and couple were allowed to have an extra kid.
Many couples in China were restricted by the 1979 mandate from having more than one kid but
this was loosened as at 2016 and couple were allowed to have an extra kid. This may explain the
slowed population growth rate of this economy.

Economic Analysis
As at the 2017 Est., China’s GDP measured by purchasing power parity
(PPP) was $23.16 trillion; based on official exchange rate, it was 12.01 trillion. Its
real growth rate of GDP was 6.9%. GDP per capita based on (PPP) was $ 16,700.
Gross national saving was 45.8% of its GDP. In comparison of China’s GDP
composition to the world; household’s consumption was 39.1%, 14.6% government
consumption, 43.3% investment in fixed capital, 1.1% investment in inventories,
19.7% exports, and -17.8% imports. The rate of industrial production growth was
6.2%. Based on occupation, Chinese labor force is distributed into; 27.7% in
Agriculture, 28.8% in industry, and 43.5% in services according to 2016 Est. 3.3%
of its population live below the poverty line. In comparison to the world, China has
a -4.3% of its GDP budget deficit. Its public debt is 47.8% of its GDP. Its inflation
rate based on consumer prices is 1.6%. Of late, this economy is going to face
difficulties following the imposition of a tariff on its exports by the US government.