Rust mars the iron rice bowl

The Management of Human Resources in Chinese Industry
November 24, 1995

Malcolm Warner chooses his title carefully: not Human Resource Management (HRM) in China, since, as he goes on to argue in contradiction to some recent studies, no such thing yet exists. Acknowledging the "family resemblance" between some features of Chinese practice and western HRM, he nevertheless sees the differences between them as more important. Pointing out the obvious, he identifies important cultural differences as one factor making convergence between the West and China in this field unlikely. Since Chinese enterprises have in most cases not yet set out along the road of western-style HRM, and would in any case not be starting from the same place as their western counterparts, it is not altogether surprising that they have not ended up at the same destination. He conjures up a marvellous image of the optimists among the China reform-watchers who see clear signs of HRM practices emerging in China, warning them not to get too carried away with "imagining shadows on the wall of the cave". It is still all too easy when examining the fudges and complexities of the Chinese reform scene to pick out only what one wishes or expects to see.

This book goes much further than debating the extent to which HRM can be said to exist in China, looking at recent reforms in labour and personnel, wage systems, and social insurance, the so-called "three systems reforms" of 1992. It focuses on what might be termed China's rust-belt, state enterprises in the old industrial heartland of the northeast. In particular, the question is posed as to whether state enterprises' "iron rice-bowl" of lifetime job security and work-unit welfare provision, a system which has proved remarkably resilient thus far despite the economic reforms, will cease to exist in the near future.

In the early 1980s the Chinese press was already talking of "smashing the iron rice-bowl", as the first experiments with fixed-term employment contracts commenced. But despite the gradual spread of contract labour and various wage reforms, dismissals are still rare, labour mobility is low, and China still cannot really be said to have a labour market. However, it seems from the data and arguments in this study that the 1992 labour reforms do represent a significant change. Warner argues that incremental implementation of the three systems reforms beyond those enterprises chosen as pilot sites is the only realistic way forward for China's policymakers. In this scenario, the state sector both reforms and reduces itself in importance within the national economy, resulting in a shrinking away, rather than a smashing, of the iron rice bowl.

The alternative to this scenario is what makes this subject so important. Nowhere is the political dimension of reform so important as in labour, as Warner demonstrates in his discussion of how Chinese ideologues have attempted to reconcile Marxism with the concept of a labour market. The threat of mass unrest fuelled by rising unemployment and insecurity among urban industrial workers is a very real one, and forms a constant backdrop to Warner's discussion of recent reforms.

Confident predictions of China becoming the next economic superpower appear less well-founded when one contemplates the consequences of an ever-growing workforce finding its aspirations thwarted by a faltering economic growth rate.

Jackie Sheehan is a lecturer in international history, Keele University.

The Management of Human Resources in Chinese Industry

Author - Malcolm Warner
ISBN - 0 333 60524 1
Publisher - Macmillan
Price - £40.00
Pages - 217

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