Anita Chan, “Chinese Enterprise Reforms: Convergence with the Japanese Model?”, Industrial and...

Chinese Enterprise Reforms:Convergence with the Japanese Model?

A N I T A C H A N

(Contemporary China Centre, Coombs Annex, 9 Liversidge Street, Research Schoolof Pacific Studies, The Australian National University, Canberra, ACT 2601,

Australia)

This paper explores Chinese efforts to join the ranks of the East Asian developing

economies of South Korea, Taiwan, Hong Kong and Singapore. It describes Chinese

efforts to emulate the Japanese model of industrial management rather than American

management schemes, and it notes the compatibilities between certain legacies of Maoist

socialism in China's state enterprises and the Japanese model. In particular, the paper

traces the development of the Chinese employment system in the state sector. Compati-

bilities include indications that the Chinese workers could become company men, that

they prefer paternalistic managers, that their work responds to appreciation, and that

they do not regard management and worker interests as necessarily conflictual.

Granted the evolution of greater autonomy for Chinese state enterprises, the paper

concludes that an organization-oriented system can develop within Chinese state

enterprises and that a shift to a market economy need not be accompanied by a market-

oriented employment system.

~ 1. Introduction

I The burgeoning non-state sector of China's economy has prompted bothz Chinese and foreign scholars to place China within the East Asian develop-H mental model: parallel to the ranks of the 'Four Little Dragons' (SouthI Korea, Taiwan, Hong Kong and Singapore) (Minor and Hamm, 1991;

fc McCormick and Unger, 1995). While Chinese intellectuals and policy-i makers are keen to unravel the secret of how to become a fifth dragon,| Western scholars are given to pondering the probabilities and improbabilitiesJ" of such a scenario."J A few Western scholars writing in the 1980s, at a time when the1 industrial reforms and marketization in China were at an early stage, hadJI © Oxford University Press 1995

449

at The A

ustralian National U

niversity on July 16, 2013http://icc.oxfordjournals.org/

Dow

nloaded from

http://icc.oxfordjournals.org/

Chinese Enterprise Reforms: Convergence with the Japanese Model?

set their horizons further East. They had speculated on the possibility ofChina's state-owned industry gravitating toward the Japanese model, givenChina's existing industrial organization structure, but had not explored thispotential in any depth (Shirk, 1981; White, 1987; Womack, 1991). In theyears since, a conscious effort has arisen among some Chinese academics andpolicy-makers to examine Japanese management philosophy and Japaneseenterprise culture. This is reflected in a vast literature on Japanese manage-ment published in Chinese management journals (Lewis and Sun, 1994).Most of these writings do not explicitly advocate that China should directlyemulate Japan; for obvious historical reasons, Chinese have sensitive feelingsabout Japan. But it is notable that about twice as many articles have beendevoted to introducing the Japanese model of industrial management thanAmerican management schemes.1 Behind closed doors, moreover, heateddebates have gone on in the government's think-tanks and academic circleson whether China's state-owned industry should shift in the direction of onemodel or the other.2

As shall be shown in the following pages, even though this debate hasnot been settled, certain legacies of Maoist socialism augment the potentialfor China's state enterprises to gravitate somewhat further toward the Japanesemodel. This paper will be mainly devoted to teasing out and analyzing thesefeatures.

2. A Late-late Developer

Economically, China is a 'late-late developer', and is imbued with an im-patient catch-up mentality in much the same way Japan was in the lastcentury.3 Like Japan and other late developers (specifically the Asian NICs),the Chinese have attempted consciously to seek out economic models foremulation. For a few years in the first half of the 1980s, the Hungarianeconomic reforms were seen as a possibility, but were soon overtaken by

' People's University in Beijing publishes • reprint series of worthwhile articles from the national andregional journals, entitled Retmin D*xia Baakan Fuji* Ziluu (Ptoflt'l Untvtnitj Neunpoptr sttd MMpnintRtpnwts), and between 1980 and 1990 its reprint journal Industrial Enttrpriu Managemat contained 202articles on Japanese enterprises, compared with only 122 articles regarding American enterprises. Othergood sources for pipers on the Japanese model include the journals Sbebxixxt Ytnjui (Socithgic*! Restanb),Sbaiba Ttquteo (SixxzhtM SfucUl Eamcmic Zmt Papen) and Sbtfan ($oattj).

2 As just one example, in April 1989, at a symposium organized by Ktyi Ribso (Tednohgy Dsilj)attended by twenty of China's most high-powered academics as well as staff from Zhao Ziyang's think-tanks, the director of the Chinese Credit Investment Corporation, who had been a former secretary ofZhao Ziyang in the mid-1980s, criticized those who wanted 'to cross the river in one leap', i.e. adoptthe Western model wholesale. He suggested identifying the existing organizational arrangements whichcould help China to develop like Japan. (My thanks to Zhu Xiaoyang, who attended this symposium,for sharing this information with me.)

5 This catch-up mentality comes across very clearly in the influential documentary series known as HeSbang aired on Chinese television stations in 1988.

450

at The A



Dow

nloaded from



events as China's reforms moved beyond what Hungary had ever attempted.As these economic reforms proceeded, it became difficult to see whether theChinese reforms were patterned on any particular model. At the most, onecould speak of them as having been born of trial and error, with both visibleand invisible hands having played a part. This is illustrated by the currentslogan: China should adopt 'pick-ism' (nalai zhuyi), meaning adopting bitsfrom any models that are useful ('Borrowing from Foreigners is PerfectlyOkay,' Inside China Mainland, March 1993, pp. 21-27). This very notionimplies an interventionist state, though not one particularly constrained byideological rigidities and niceties.

The role of the state is guaranteed by only one guiding principle, thatChina is to maintain 'socialism with Chinese characteristics'. By no means(at least for the time being) is this an empty slogan. China still retainscertain socialist features and probably will continue to do so for the fore-seeable future. One and a half decades after the economic reforms began,the Chinese economic structure is now quite evenly bifurcated: a statesector with socialist characteristics, employing 40% of the non-agriculturalworkforce and accounting for 45% of industrial output; and a rapidlyexpanding non-state sector with all the trappings of capitalism.4 This non-state economic sector is now taking over the labor-intensive industries ofthe Four Little Dragons as the latter move up-market in their production(Minor and Hamm, 1991, pp. 85-99). Whether the state sector can con-tinue to survive will depend on whether it can compete under intensecompetitive pressures from the non-state sector. And whether it can holdon to its 'socialist characteristics' will depend on its ability to providedecent wages and social benefits to its workforce in a climate where thenon-state sector's workers are bereft of job security and enjoy almost nosocial benefits.

3. State-, Market-and Organization-oriented EmploymentSystems

The reform of China's state sector is subject to the pulls of two fundamentallydifferent capitalist models. They are, as defined in Dore's conception (1973),the organization-oriented system, of which Japan approximates the idealtype; and the market-oriented system that pervades most Western capitalist

4 The non-state sector comprises totally foreign-owned firms, )oint ventures, private enterprises andcollective enterprises. The largest share comprises the local, publicly owned collective sector, though upto a third of these could be 'take collectives', i.e. enterprises that are actually privately owned but areregistered as collectives to take advantage of tax breaks and to avoid bureaucratic discrimination andharassment.

451

at The A



Dow

nloaded from



economies (specifically the British variant),5 but which in recent years havealso been gradually adopting, either in large measure or piecemeal, elementsof the Japanese model.6

Dore traces the formation of these two systems to different attitudestowards labor and skill. Under the market paradigm,

skill is a kind of capital owned by, and embodied in, individuals, and . . .labor services, utilizing those skills, are bought and sold by those indivi-duals in the market . . . that is to say, the forces of demand and supplydetermine the price (wage, salary) which different kinds of service will fetch(Dore, 1987, p. 25).

The result is that labor is mobile; the individual theoretically decidesregularly whether to be on the move, seeking the highest price for his/herskill; and management always cautiously weighs the returns from its trainingcosts, for the loss of trained skills is a constant threat to the productionprocess. The system is marked by a high sense of insecurity and lack ofcommitment from both parties. Neither side feels obliged to the otherbeyond the labor contract, as their relationship is only bound temporarilyby market exigencies. Employees therefore do not develop a sense of loyaltyto the enterprise. Personal interests and enterprise interests are not perceivedas closely linked; in fact, they are often perceived as in conflict. Thequintessential example of this ideal type is found in the export-orientedindustries of some of the developing countries, modern equivalents of thehard-nosed industrial-revolution capitalism practised by the industrializednations of yesteryear. Marketization of the entire Chinese economy isthreatening to force the state sector into this market-oriented mode.

The organization-oriented system, exemplified by the Japanese model,holds a different attitude towards labor.7 Training and retraining are pro-vided by the firm, which, having footed the bill, is keen to conserve the

' Dore's conception of the difference between the two models first appeared in Dore (1973). Hesystematically developed the concept in Dorc (1987). Refer specifically to the table summarizing thecharacteristics of the two systems in Dore (1987, pp. 29-31). The outline of the two employmentsystems described here is a summary of Dore's ideas. Except for erosion at the fringes, the essentialfeatures of the Japanese system have basically remained unchanged (Dore, 1989).

6 For a recent comparative study of Japanese and American industrial organization largely based onDore's conception of welfare corporatism' (a term used by Dore in his 1973 study), see Lincoln andLalleberg (1990). The authors concluded that the American system is gradually shifting toward theJapanese model. For the success of Japanese transplants in the USA, see Florida and Kenney (1991) andAdler (1993). On the other hand, in Britain such a transfer was less successful due to workers' resistance(Wilkinson and Oliver, 1990).

1 I would like to caution readers who might confuse my usage of Dore's organizacion-oriented systemwith Shirk's (1981) adaptation of the concept. Shirk posed the organization-oriented system against an'efficiency-oriented' system, which implies that an 'organization-oriented' system is less efficient than amore market-oriented system. My usage of the term here, however, is borrowed strictly from Dore'swithout such an implication.

452

at The A



Dow

nloaded from



trained skills. In consequence, both parties hold high expectations for a senseof permanency in the labor contract, with a reciprocal willingness of laborto enter into a paternalistic relationship. Consequently, payment for laboris person-related rather than skill-related; that is, labor is not paid strictlycommensurate with skill levels, but also in accord with other criteria suchas age, years of service, even size of family. In return, management demandsa high level of committed loyalty from the employees, and individual,management and enterprise interests are perceived ideally as congruent.

The Chinese state-sector employment system does not fall into either ofthese two categories. It operates by its own internal logic. This we shall callthe 'state-oriented employment system' in that the socialist economy wascentrally planned, with centrally planned employment and remunerationsystems (not always the case in the European socialist economies, which facedlabor shortages, but very strictly the case with China). Neither the marketnor the enterprise, but the state, represented by different levels of bureaucraticadministrative agents, became the ultimate mediator between the productionprocess and labor, as well as in allocation of resources and the redistributionof wealth. As in Japan, it was a paternalistic provider, and in the name ofthe Chinese state great pressures could in turn be placed on the individualto surrender personal interests. This system, too, was characterized by a highdegree of security, low job mobility and a person-related wage system. Thestate-oriented and organization-oriented systems overlap in these particularaspects, including denial of individual interest; but the objects of identificationare different: the former involved submission to the state and its agents, thelatter to the enterprise organization.

The distinction is an important one. In Japan today the collective welfareof the enterprise takes precedence over the state's and the individual's. (Thisis not 'culturally' bound: in the pre-World War II period, the interest ofthe state, personified in the Japanese emperor, prevailed over all otherinterests). Under Mao, although slogans had supported a balance betweenthe tripartite interests of the state (an abstraction of 'the people'), thecollective (industrial enterprise or agricultural collective), and the individual,in practice the highest levels of the polity repeatedly sought to have allinterests bow to the overriding will of the party-state and, at the height ofMao's personality cult, the will of the deified leader. The political systemmanufactured pejorative labels such as 'individualism', 'economism' (whenenterprises took any initiative to grant workers higher pay and more benefits)and 'syndicalism' (when trade unions tried to be more independent of theCommunist Party) to pre-empt any signs of non-subservience to the state.At the height of political campaigns, these labels could be criminalized toinvite sanctions, purges and imprisonment.

453

at The A



Dow

nloaded from



Politically, as of the 1990s, the state-oriented system as described aboveno longer aptly describes in any respect the Chinese government's relation-ship with the industrial state sector. Enterprises increasingly are encouragedto competitively seek out their own interests in the market. So, too, sincethe beginning of Deng's reform program, the state-oriented employmentsystem has been under incessant attack as dysfunctional and as obstructingeconomic reforms. Some Chinese economists argue that only with the intro-duction of a labor market will workers' incentives and enterprise efficiencybe raised. Through the conscious effort of advocates of the market-orientedsystem, marketization has made inroads into the state-oriented system, evenif it has not yer completely triumphed. The introduction of the contractlabor system in place of the life-tenure system; the introduction of an awardsystem that is related to the quantity and quality of work done rather thanseniority or other factors; the recruitment of an increasing number of casuallaborers into the state sector to enhance labor flexibility to changing marketdemands and in order to drive down labor costs; the shrinking of fringebenefits; the privatization of housing; and the possibility of dismissals orpartial lay-offs at a reduced wage are all measures that would utterly trans-form the state-oriented system. Thus far, these policies have only beencarried out piecemeal, here and there, now and then, depending on localsituations, but the pressures are there.8

Two major obstacles have prevented the state-oriented system from beingdismantled in one fell swoop. First, since the 1980s the state-sector workershave been resisting the reform measures to take away their 'iron rice bowl'.Resistance in the 1980s usually was not manifested in head-on confrontationssuch as strikes (which are illegal and on which accurate figures are impossibleto come by) but rather in workers resorting to 'weapons of the weak' —absenteeism, go-slows, passivity, lax work ethics, even sabotage.9 The statehas been alert to this dissatisfaction. When workers participated in theupheavals of 1989, which were marked by the emergence of an autonomoustrade union (Walder and Gong, 1993), the government responded not onlywith repression but also by slowing down the reforms in the latter part of1989 and by resorting to the Maoist tactic of heaping eulogies on the'working class' (Chan, 1991). The political and social collapse of the formerSoviet Union not long thereafter only served to hammer home to both rulers

8 Sec, for example, the announcement of the Deputy Labor Minister th»t, as of 1992, the entirecountry would be shifting to a Ubor market system (China Daily, 19 May, 1992, p. 1).

9 For discussions of workers' dissatisfaction and resistance, see e.g. Sbijitjifji Daoimc (VcrUEauumicHtraU), 23 January 1989; Zbtnggia Xiuwa (Cbiaa New), 4 January 1989; and Cao Xiaofeng and ZhaoZixiang (1991), 'Duoxing xintai: Qiye zhigong laodong jijixing diluo de yuanyin qianxi'(The Psychologyof Lazinesj: A Brief Analysis of the Reason for the Low Incentives of Enterprise Staff and Workers'),Sbtbmi (Socuty), no. 4, 40 -42 .

454

at The A



Dow

nloaded from



and ruled the importance of maintaining social stability. When the govern-ment tried once again in 1992 to lay off surplus labor in money-losing stateenterprises by carrying out a 'breaking the three irons campaign' (breakingthe iron rice bowl, iron wages and iron chair of tenured employment), stateworkers again resisted, and pro-market policy-makers cautiously had toretreat once more,10 though they stopped short of announcing that theirpolicy was inappropriate and should be discarded. In early 1993 new effortscommenced (China News Digest, 17 August 1993) and again met a rise inworker dissatisfaction. In 1994 this labor unrest escalated. When the govern-ment's budget could no longer subsidize money-losing enterprises, 200,000workers in the Northeast and China's interior reportedly went on strike ordemonstrated publicly (China Labour Bulletin (Hong Kong), (No. 3, May1994, 8-9).

The second obstacle to the dismantling of the state-oriented system is nota conscious policy choice but the unintended consequence of some of thereform policies, in particular those policies related to enterprise reforms.These enterprise reform measures have caused the state sector to drift in thedirection of the organization-oriented system as opposed to the market-oriented system, even though the latter is actually the generally preferredmodel of high-level decision-makers. To comprehend this drift we need firstto examine the features of the existing state-oriented system that are legaciesof the Maoist system.

4. The Maoist State-oriented System as a Prototype of theOrganization-oriented System

Many cross-national studies identify shared 'Confucian' cultural roots as aningredient in the economic success of the Four Little Dragons and Japan(Harris and Hofstede, 1990; Mackie, 1992). The cultural norms shared byChina and Japan (obvious ones like social conformity, deference to authority,attitude towards learning, emphasis on morality, etc.) for our purposes willbe taken as having provided the two countries with certain similar predis-positions on the eve of their respective phases of industrialization andmodernization.

Yet, as argued by Dore (1973, Ch. 14), the differences between post-World War II British and Japanese employment systems can be historicallytraced more to institutional roots. What are the institutional legacies that

10 For reports of these industrial protests see Tbt New York Tima, 12 June 1992. In August 1992China's Labor Minister openly admitted there had been strikes when efforts had been made to lay off onemillion state workers that year (Reuters News Service, 3 August 1992). For the government's placatoryreaction, see e.g. the special editorial in the Profit'I Daily of 5 May 1992.

455

at The A



Dow

nloaded from



are playing and will play a part in molding Chinese industrial relationsand employment practices in the direction of the organization-orientedmodel?

The most tenacious of these Maoist legacies are lifetime employment andpromotion based on seniority. These two practices, as already noted, arebeing targeted by Chinese reformers as detrimental to the economic reformefforts; yet they are features seen widely by Western and Japanese scholarsas important to Japan's economic success. n The question that needs address-ing, then, is why similar practices have engendered such different results.The Japanese lifetime employment system has been successful in cultivatingamong its employees a sense of security and, in turn, their strong identifica-tion with the enterprise. In fact, even some large Western corporations todayrecognize the positive side of lifetime employment, and have begun insti-tuting it (Dore, 1992, p. 6). Why is it, then, that it is perceived so nega-tively by Chinese reformers as the root cause of Chinese workers' laziness andlow productivity? Could it be possible that, driven by a utilitarian free-marketeer determination to break the 'iron rice bowl', they are actuallydismantling something that ought to be retained, throwing away the babywith the bathwater? An over-reaction to the state-oriented system? Lifetimeemployment and seniority promotion systems are not, I would argue, theroot of the problem. There are others, and a key one pertains to thecontradiction between individual and collective interests.

In the realm of economic practicalities, subjugation to the interests of theparty-state meant that industrial enterprises under Mao were run by Partyfiat, often at the expense of economic efficiency. The enterprise had tosurrender all profits to the state, and as far as the employees were concernedthe enterprise was only the state's surrogate administrative unit in charge ofhousing and welfare provisions. Income was paid in accordance with anationwide wage scale, with little relationship to the financial situation ofthe enterprise. Employees and workers were not able to develop a strongeconomic identity with their enterprise since the economic performance ofthe enterprise had little effect on the individual's economic gains or losses.Their identification with the party-state was only an abstraction. This, Iwould argue, was one of the reasons for the general lack of work incentivesin Chinese state enterprises under Mao, and still is to a large extent today.

11 MOM Chinese advocates of the Japanese model, as noted earlier, do not draw any explicit comparisonbetween Japan and China, less still openly argue that China should seriously learn from Japan. At leastone article, though, gingerly suggests that the reforms should not rashly dismantle the lifetime employ-ment system because it has been recognized as a practice essential to the successful Japanese model. SeeZheng Haihang (1990), 'Zhongri qiye jingying guanh gaige — jianlun ihongguo qiye gaige' ('ComparingChinese and Japanese Enterprise Management Reforms — Including a Discussion on Chinese EnterpriseReforms'), Gmigt (Reform), No. 6, 168-175.

456

at The A



Dow

nloaded from



The crux of the issue of workers' incentives lay with state-oriented ethos,rather than the practice of lifetime employment.

Beyond lifetime employment, a Maoist feature that finds close parallelsin Japan is that the workplace doubles as a community.12 In China, theconcept is called the damuei system; in Japan, the 'workplace family'. In bothcases, work colleagues are also neighbors. Work lives and after-hours livesare closely intertwined. The sense of community is reinforced by the work-place being a mini-welfare state that takes care not only of the employees'welfare in work but also their medical needs, retirement funds, choice ofmarriage partners, education of their children etc. In Japan, the largeenterprise provides for the bulk of an individual's welfare needs, with thestate providing a small portion. In China, a state enterprise, as the agent ofthe state, similarly takes care of its employees' welfare.

In both countries, an individual's place in urban society is identified byone's workplace. In Japan, one is a Hitachi person, a Sanyo person. In China,the first question asked of someone is: 'Nali?', literally meaning 'Where?',short for 'Which work unit are you from?' Without the backing of a workunit, an individual in China would need to overcome great hurdles to getanything done. A person without an official relationship with any work unitis a non-person (Zhu and Chan, 1994, Ch. 5).13 However, whereas theworkplace as a community in Japan serves economic and social functions, inChina the Maoist danwei system has held an additional function — politicalcontrol. The workplace and neighborhood became efficient agents in theparty-state's penetration of society since the boundary between control overone's work life and one's private life was blurred. Political control wasomnipresent. With people constantly instructed to be vigilant against classenemies,14 any colleague/ neighbor was a potential informant. The Maoist workunit/community was not blessed with harmonious human relationships;it was a place which bred mutual suspicion and mistrust. By instilling fear,it atomized human relationships.15 Under such circumstances the Maoist

12 For • discussion on the Japanese enterprise as a community, see Dore (1973, Ch. 8). For the Chineseenterprise as t community, an excellent account of the historical origin and the sequencing of eventsthat culminated in the ossification of the danwti system can be found in Lu Feng (1992). A descriptionof the Chinese cUmwtt as a community can also be found in Henderson and Cohen (1984).

13 For a detailed analysis of the serious social and political consequences of someone not belonging toa work unit in China even today, see Zhu and Chan (1994).

14 Sate penetration into the private lives of individuals through the work unit was deeper underMaoism than Stalinism. A good description of the political control in the work unit and a discussion ofMaoism as a variant of Stalinism can be found in Meaney (1988, Ch. i).

" For a graphic description of the dangers of being exposed by neighbors see three short storieswritten by Chen Jo-hsi (1978) 'Residency Check', 'Jen Hsiulan' and Chairman Mao is a Rotten Egg'.For a scholarly study of interpersonal isolation in work places and neighborhoods, see Vogel(1965).

457

at The A



Dow

nloaded from



work unit squandered opportunities to play a cohesive social role similar tothe Japanese work unit.

On the shopfloor, the Japanese utilize greater non-material incentives thanWestern enterprises to raise workforce incentives: organizing competitionsbetween work groups, running emulation campaigns, and utilizing peergroup pressures and visibly displayed score boards. Japanese firms alsopromote democratic participation to help raise worker morale. Institutionalarrangements have been established to solicit workers' opinions on innovativemeans to increase efficiency, and the Japanese QC (quality control) circle hasbecome widely recognized in the Western world as a highly successfulmanagement technique to raise incentives (Bank, 1987). The Maoist systemprofessed very similar practices. For example, workers formally were askedto 'raise rational suggestions' (ti helihua jianyi) to enhance production,resulting in enormous pressure being placed on enterprises to prove theirdemocratic management style by chalking up the numbers of 'rationalsuggestions' raised by workers, to the tune of a few thousand per enterpriseeach year. l6 There was also much talk of workers' participation in manage-ment, small group competitions, model emulations, granting of honoraryawards to model workers, etc. In fact, these incentive-raising measures,which inundated the shopfloor in the form of campaigns, were given muchgreater play than in the Japanese system. Yet these Chinese practices becameformalistic rituals, and never achieved the results intended. The core of theproblem was that the non-material incentives were appraised on grounds ofpolitical conformity, which only served further to alienate workers from theirlabor, their colleagues and the enterprise (Walder, 1986).17

Compared with Western factories, Japanese factories put in great effortsto narrow the social gap between management and workers: well-knownpractices such as using a similar monthly salary system for both white- andblue-collar workers, mandatory wearing of the company uniform for all, andestablishing single-status eating and toilet facilities.18 Maoism too espousedegalitarianism. With frugality and conformity imposed, everyone wore basi-cally the same ubiquitous dull-colored garb. Facilities tended to be single-status, the pay system was monthly for all and the sloganeering was thatthe 'workers are the masters of the state'. The distinction between staff andworkers in a factory was not visibly marked. In Government statistics, staffand workers were always referred to as zhi-gong, as if they were one single

16 A general description of jome of the Maoist practices to motivate workers u contained in Hoffman(1974, Ch. 4).

17 The failurt of the Maoist management practices on the shopfloor is well documented by Walder(1986, Chs4-6) .

18 This kind of egalitarian work culture is not always easily acceptable to Western management staff.See Wilkinson and Oliver (1990, pp. 333-354).

458

at The A



Dow

nloaded from



categoryof 'workingpeople', inanexercisetofudgetheboundarybetweensocialgroups.19 In reality, management, staff and workers did not enjoy equal fringebenefits and social and political status, but the ideology of egalitarianism hashad a lasting influence, to the extent that today's economic reformers, whobelieve that inegalitarianism is the panacea for national economic and enter-prise reforms, consider it one of the most tenacious of obstructions.20

Similarities are also present in recruitment of the workforces of largecorporations in Japan and China. To be sure, under Mao job allocations werecentrally planned by the state. There was no labor market, no freedom toenter or quit any job and little geographical mobility once in a job, exceptin cases where one was banished to take up lesser jobs in the countryside.A great drawback was that job-assignment was often based on political ratherthan on meritocratic principles, causing enormous wastage in human resourcesfor several decades. The problem was compounded by an over-supply of laborin China's cities during the 1970s. To avoid their children being sent to thecountryside to become peasants, the urban populace had sought to popularizea new system called 'dingti', in which children were provided with a job attheir parents' place of employment when they retired.21 In labor recruitmentthe Maoist system was the antithesis of Japan's highly organized meritocraticrecruitment practices: of top Japanese corporations recruiting graduates fromtop universities, and so forth down the hierarchy. The dingti system infestedChinese enterprises with particularistic blood relationships that compoundedthe parallel problem of recruitment based on political criteria.

Today, even though a market ideology is supplanting one of politicalparty diktat, particularistic and clientalistic relationships continue to play avery influential role in enterprises' recruitment of new staff and workers. Ina country with a massive over-supply of labor, this legacy will not so readilydisappear. Thus, despite the government's repeated attempts in the 1980sto institute a meritocratic-based labor market, with the erosion of centraljob allocations parents have been able to continue to pressurize their work-places' management to recruit their children.22 Moreover, cadres have begun

19 In feet, for a researcher this presents an irritating problem because Chinese statistics do not separate

out the white-collar and blue-collar staff, making it very troublesome to 6nd out, for instance, the

differences in income between them.2 0 O n discussions of'egalitarianism' as a problem, tee 'New Problems in Income Distribution', Insult

Cbiiu MMIMUOJ, July 1991 , pp . 1 5 - 1 7 ; speech (or document written) by Jiang Zemin , (1989) , 'Renzhen

xiaochu shehui fenpai bugong xianxiang' (Seriously el iminate the phenomenon of unfair distribution

in society), Remsbi Zhtngct Ftpii Zhtunkan (SptctaJ JOMTMOI on Pmomd Policies mnd Rules), N o . 10, 2 - 7 .2 1 See the 'provisional regulations regarding recruitment of workers in state enterprises', issued by the

Labor Bureau on 8 December 1990. (LjtoJong Zbtnga Zbusnkan (SptciaJ)carnal on Ltbor Policy), N o . 2 ,

1991, 13.)2 2 Shao Lei and Chen Xiangdong (1991) , Zbonggm Sbtimi Banbmng Zbidu Gaigc (Reform of China's

Social Security System), Beijing, Jingji Guanli Chubanshe, pp . 66—68. Also see L*adca% Zbtnga

ZJnumJun, op . c i t . , p . 13.

459

at The A



Dow

nloaded from



to take advantage of their power to place their relatives in coveted positions.According to some surveys, the phenomenon of 'familism' (Jiazu xianxiangotjiazu zhuyi) in Chinese state enterprises has worsened rather than improvedwith the market reforms. This kind of familism should not be confused withthe familism of Japanese enterprises, a term used to describe Japaneseidentification with their workplaces. The nepotistic Chinese practice adverselyaffects the reforms in state enterprises: it lowers the quality of new recruitsinto the enterprises; it creates factions and cliques in the workplace; and ittends to further inflate the number of surplus laborers in the enterprises,running diametrically contrary to reform policies. Above all it providesenterprise cadres opportunities to utilize their own relations to empire-build,inviting charges of favoritism, power struggle and abuse of power, seriouslyeroding workers' and staffs morale and incentives.23

In some other respects, though, the recruitment system was quite similarto the Japanese system. In Japan, since most people have been recruited intoa work unit not based on specific skills but on level of academic attainment,with the understanding that training for any specific position would beprovided upon entry to the enterprise, there is a good deal of flexibility injob assignments on the shopfloor, facilitating adjustments to new technologiesand enterprise restructuring, in contradistinction to the very rigidly definedjobs performed by British workers.24 The Chinese system of job allocations,despite the adverse effects listed above, avoids this rigid British-style com-partmentalization by trade skills, and may yet be turned into an asset if onlymore attention is paid to the general suitability of recruits.

Because the Maoist system had always been hostile to the bonus system(used by the Japanese), and more so the piece rate system (traditionally usedby the British), a very flat pay scale based on seniority prevailed (Dore, 1973,Ch. 3). During the less ideologically charged periods of Mao's rule, though,a bonus system was grafted onto the seniority system. Under Deng's eco-nomic reforms, bonus systems have been widely adopted to raise incentives,although such bonuses still comprise a small percentage of the total wageincome.25 The types of components in the package, though, are verysimilar to the Japanese. Both countries' monthly wage systems contain a basewage component tied to seniority, guaranteed to meet basic needs. Both also

2 3 Sbthmi (Society), N o . 4 , 1991 , pp. 42—45. A survey of fourteen state enterprises revealed that from

1983 to 1989 , the total number of employees increased by 8 6 % . The percentage of employees who have

blood relations in the same work unit increased from 11.65 to 3 3 % , and of these 9 2 . 2 % are related as

parents/children, husbands/wives or as siblings.24 For a comparative discussion of the British system see Wilkinson and Oliver ( 1 9 9 0 ) ; for the

Australian system see Ewer a tl. ( 1 9 9 1 , Ch. 7) .2 5 For details of the evolutionary development of China's wage system under the economic reforms,

see Alcio Takahara (1992) .

460

at The A



Dow

nloaded from



provide subsidies, reflecting the two systems' paternalistic character. In theJapanese system during the 1970s the bonuses in large firms made up 26%(for medium and small firms, the bonus percentage were 22% and 16%,respectively) of the year's income (Kazutoshi Koshiro, 1983, pp. 240-242),reaching an average for all firms of 35% in 1990 (Ministry of Labor (Japan),1990; cited in Curtain, 1993). Monthly bonuses in China similarly havebeen increasing yearly in the 1980s comprising about 20% of the entirewage package as of 1991. It should be noted, though, that under theChinese reforms the base wage portion has been shrinking (from 85 to 49%of total wage income between 1978 and 1991), and constant pressure isbeing applied to introduce a job/skill-related remuneration component (thejineng gongzi zhi),21 a component that parallels the job-level supplement inthe Japanese system, which even in Japan was an innovation of the 1960s.Before then, for the two decades after the war, the Japanese wage structurewas very strongly work age-related, which is to say very similar to theMao era wage system (Karsh and Cole, 1968, pp. 45 -63 ; Dore, 1973,p. 104).

In sum, the carry-over of the Maoist wage structure and the Dengisttransitional structure seems to be leading the Chinese wage system in thedirection of Japan, rather than toward a more market-driven system. Thepiecework system, for instance, is not widely used in the state sector. Amongother things, introduction of piece rates in some industries requires sophisti-cated management know-how in planning and norm-setting techniques,which the Chinese lacked under Mao,28 and which even today continues tobe extremely undeveloped. Though Chinese reformers aspire to introduce'scientific management', the buzzword for Taylorism (Howard and Howard,1992), in reality Chinese management has no expertise in this respect — acommon phenomenon of socialist shopfloors (Thompson, 1992, pp. 247—248).

Management—labor relations also bear the marks of the Maoist institutional

26 The changing proportions of the various components of the Chinese state sector wage structurefrom 1978 to 1991 can be round in 1992 Zbcnggui Laodmg Gongzi Tongji Numjian (1992 Cbinae LaborVagt Statistical Ymr Book). Zhongguo Tongji Chubanshe: Beiijing, p. 125. In 1978 above-quota wagesand various lands of bonuses only made up 2.4% of the total wage bill of the country's state workers. By1988 it had gone up to 19-596, and has remained basically the same since. For the Chinese wagecomponent in 1992, see 'Long Live the Working Class,' Chin* News Aiulysu, No. 1465 (1 August1992), p. 6.

2 7 Though the base wage has been shrinking, subsidies have increased, thus cancelling out some of

the incentive-raising effects of the skill-related and bonus wage components . However, there are constant

pressures from the reformers to cut back on subsidies: feasible only if wages keep up with inflation. In

times of high inflation, the workforce wil l continue to press for maintaining and increasing subsidies.2 8 See Richman's pathbreaking work on Chinese enterprises in the 1960s. Armed wi th a comparative

perspective drawn from his expertise on the Soviet Union , Richman pointed out the appalling lack of

management know-how in Chinese state enterprises ( 1 9 6 9 , pp . 8 1 9 - 8 2 1 ) .

461

at The A



Dow

nloaded from



legacy, which similarly is now pulling China in the direction of theorganization-oriented system. Much as under Stalin, in practice labor hadno representation under Mao. A system of politically geared paternalism hadsought to reinforce the ideological notion that under socialism harmonyprevails between the workers' state and the long-term interests of theworking class. By this logic, contradictions between labor and managementcould not possibly arise. In reality, there were, of course, repeated conflictsof interest between management and labor, but the ideology of a 'workers'state' successfully hindered the development of a class-based workers' con-sciousness vis-a-vis the party-state. In contrast, such a consciousness has sunkmuch deeper roots in capitalist states like Britain, resulting in an adversarialmanagement—labor relationship whereas in Japan the enterprise union struc-ture and firm-focused ethos have been more conducive to a relatively consen-sual relationship.

In brief, the Maoist state-oriented employment system possesses many ofthe prerequisites for a transformation to a Japanese-style organization-oriented system rather than to a market-oriented system. But these wereelements that only existed in a formalistic structure deprived of operationalopportunities.

The basis of the state-oriented model could be traced to a highly politi-cized ethos, and by the 1970s it had become patently dysfunctional. Theeconomic system was infested with clientalistic relationships and low pro-ductivity (Walder, 1986, Ch. 7). Morale was at its lowest, the economystagnating, and interpersonal and class relationships strained.

5. Dengist Enterprise Reforms and Organization-orientedTendencies

Deng's urban industrial reforms commenced in earnest in the mid-1980s.The economic system was decentralized; social controls relaxed; and the'socialist man' ethos was abandoned in favor of notions of economic man. Inthe industrial sector, decentralization meant the gradual release of stateenterprises from the control of the party-state and the command economy.Though patron—client relationships could not so easily be ended abruptly,increasing numbers of state enterprises saw the apron-strings to higher levelsformally cut. In July 1992, a new law with sharper teeth was passed tofurther grant enterprises the power to resist bureaucratic intervention {BeijingReview, 35(46) (16-22 November, 1992), 13-17). Government depart-ments that violate the new regulation will bear criminal responsibility{Beijing Review, 35(32) (10-16 August, 1992), 4).

Even more important, the rapid erosion of vertical Party linkages, com-462

at The A



Dow

nloaded from



bined with a policy of separating Party and administration (dangzbeng fenkai)alongside the establishment of a manager responsibility system, mean thatthe Party secretary and the Party committee, which had hitherto enjoyednear-absolute power, have been marginalized at the expense of the expandedpower of the manager.29 In some enterprises, Party secretaries not only havelittle say in management affairs but do not even carry enough weight toinfluence decisions.30

At the same time, enterprise links with the central state are being greatlyweakened. To promote this, the State Commission for Reform of the Eco-nomic System {Tigaiwei), a powerful body under the State Council, proposedin 1992 that the industrial ministries be abolished, with their responsibilitiesand leading personnel shifted to an association for each industry. Theenterprises would no longer be subject to the minutiae of government decreesbut rather to indirect guidance plans emanating from a government agencysimilar to Japan's MITI (i.e. the Tigaiwei itself) and mediated by each of theindustrial associations. At the 11th Party Congress in October 1992, DeputyPremier Zhu Rongji, who holds special responsibility for economic reform,accordingly proposed that 'government bureaus be abolished and replacedby commissions' (san bu she wet), most specifically an economic planningcommission and trade commission, and the deputy premier observed thathe had MITI explicitly in mind.31 In March 1993, in furtherance of thisplan, it was announced that seven of China's industrial ministries were tobe abolished, and at least two of these — the Ministry of Light Industriesand the Ministry of Textiles — were transformed directly into federations ofassociations (Jingji ribao {Economic Daily), 17 March 1993, p. 2; informationalso based on my interviewing in Beijing).

In short, Chinese state enterprises progressively are being freed from boththe grip of the centralized command economy and of the Party's control

29 That this shift has been deliberate is evident in comments by Yuan Baohua, the chairman of China'sEnterprise Management Association (Zboaggm Qiyt Gtanlt Xiihti), that 'The enterprise is not a politicalorganization. The Parry's function within the enterprise is not the same as that of the Party committeesat the central and local levels . . . The enterprise is an economic organization. All its activities shouldbe centered on the manager. The enterprise is a legally incorporated body, and the manager is the legalrepresentative of this legal body who occupies the central position and is the chief initiator of activities'(Bao Guangqian and Guo Qing, 1991, p. 403). As chair of the China Enterprise ManagementAssociation, Yuan Baohua played a key mediating role in the drafting of the laws and regulations relatingto the enterprise reforms.

3 0 Luuwani (OntlwJk), No. 17, 1988, 11-15 . My own observations, gained from visiting three stateenterprises in 1991 and 1992, also point in this direction, although this does not preclude former Partysecretaries from assuming the hat of a company director and continuing in that capacity to be the mostpowerful person behind the scene. It should be emphasized, though, that authority now comes from agovernment bureaucracy, not through Party channels.

31 Jimsbi nundmi (The Nimtits), February 1993, 46 . Zhu noted in an address to the Shanghai delegationat the Congress that MITI's relationship with Japanese industry formed the explicit model. This latterinformation derives from an interview in Beijing conducted by You Ji, to whom I am indebted.

463

at The A



Dow

nloaded from



systems, with the state-oriented system gradually giving way to greaterenterprise autonomy. In 1993, the proportion of total industrial outputvalue covered by mandatory planning stood at only 4% (Beijing Review,37(3) (17-23 January 1994), p. 4). The factory manager has been given amission to provide profits and is increasingly able to perform as an economicman, unfettered by the authority of the Party secretary or ministry bureau-crats. He is being invested with new discretionary powers to decide on hiringand firing, wage scales, bonuses and penalties. The role of the state enterprisemanagers is becoming increasingly similar to that of the factory managersof large corporations in the capitalist systems. The reformers among thepolitical elite have placed great expectations on the factory managers to helpraise production efficiency through market-oriented employment practices.

The upshot of these new efforts, as noted, has been a rapid climb inindustrial conflict between management and workers as the reforms' adverseeffects on job security and perquisites prompt workers to fight to preservethe proto-organizational-oriented feature of the Maoist system.

Worried by the growing worker dissatisfaction and unrest, the govern-ment has promulgated a new Enterprise Law that seeks to restore harmonyin the factory. Under it, workers are supposed to select representatives to astaff-and-workers council,32 and the Law specifies the council's right toinvestigate management and also its power to veto all regulations vital toworkers' welfare: on wages, bonuses, labor safety, penalties and awards, etc.It also formally is to hold the right to decide on how workers' welfare fundsshould be spent and on the distribution of housing (a vitally important issueto Chinese workers). And the council is supposed to designate at least one-third of the membership of an 'enterprise management committee' (Bao andGuo, 1991, pp. 193, 385).33 The enterprise trade union, which is to be thestaff-and-workers council's administrative organ, is supposed to play a strongerrole within the firm. The idea behind these various measures is to shape agreater sense of identification with, and consensus within, the enterprise.This notion is, again, in line with that of the Japanese model.

Yet in the great bulk of China's state firms, the councils have not yet evenbeen given a chance to function. For a start, the Enterprise Law has not beenrigorously enforced to date, and in some regions not enforced at all. Some

3 2 Ax early as 1980, staff and workers' congresses that had functioned only in name in the 1930s hadbeen revived in some factories to provide a facade of democratic management. But insofar as the state-oriented structure and ethos were basically left intact throughout the first half of the 1980s, few of thecongresses had carried out their purported functions.

3 3 This no-less-than-one-third representation is not spelled out in the law, but was cited by YuanBaohua, who is an authority on this matter. The rest of the members of the management board, whichis to be chaired by the manager, include: the deputy manager, the senior engineer, the senior accountant,the Party secretary and the Youth League secretary.

464

at The A



Dow

nloaded from



cities have gone so far as to enact local laws to counteract the national law.34

Moreover, as one of the municipal trade unions has noted in frustration,even the national statute does not provide any mechanisms for penalizingmanagers who violate it.35 Yet on paper, if not in reality, the workers andunions enjoy powers within the enterprise that are at odds with the market-oriented system but in keeping with the organizational-oriented system.

Whether in future years a Chinese enterprise union, in line with its rolein the staff-and-workers council, can assume an enhanced position in thefirm is impossible to predict, but whatever the outcome it is unlikely thatthe unions will become adversarial trade unions in the Western tradition.For one thing, a tradition of management-union 'antagonism' is missing,and this institutional legacy is apt to draw Chinese management-laborrelations, if mediated by the unions, closer to the Japanese model. After all,the union federation is still an arm of the state, and its personnel come fromthe same stock as the state officialdom. Though the bureaucracies in differentsectors of the economy and society increasingly are asserting their ownbureaucratic interests and those of their constituencies, it is unlikely thatthe unions will develop a confrontational stance vis-d-vis the state. The unionfederation has always abided by the principle of working with, not against,state or management interests. Its guiding principle is still the time-honoredone of balancing individual, collective and state interests. In recent years,in fact, the unions have been pushing hard for a concept known as 'theenterprise as a body of mutual interests' (qiyi liyi gongtongti). It recognizesthat management and workers hold different interests, but stresses that ifboth parties could compromise and cooperate, with income distributedfairly, they could work harmoniously toward the collective good of the enter-prise.36

Added to this, the Chinese trade union structure has never been organizedalong the line of trades or professions as in the British tradition, but, rather,all of the staff and workers in a Chinese enterprise automatically becomemembers of a single enterprise union. In this respect, the structure ofChinese unions resembles that of the Japanese enterprise union. Given

M Chongqing Municipal Trade Union Research Department, 'Counter-measures to deal with problemjin implementing the guiding principle of "whole-heartedly relying on the working class" ' (in Chinese).This is an internal document that was presented at a conference in 1991-

" Ibid." A collection of the essays written by various provincial-level unions is published in the volume Qijt

LJyi pmgtDMpi Cbtitsn (Prtlimitutry Imvaligathtu inn tbt Enttrpnu *s * Body of MMMMJ Inttmts). ZhongguoGongren Chubanshe: Beijing, 1990. For an example of such a collective contract, see pp. 206-209.The most interesting essays in the collection were compiled by the unions of Jiangsu and Hebei provinces.These recount the history of collective contracting in the two provinces; how the 'mutual interest' ideawas seen as a solution to the problems that had emerged with the manager responsibility system, andthe alleged success of the program in reducing management-workers tensions, which in turn waseffective in increasing production.

465

at The A



Dow

nloaded from



current trends in China, there exists a good chance that the Chinese laborunion structure will converge toward that of the Japanese enterprise union.

6. Adopting the Japanese Model

In the heated debate within think-tanks and academic circles as to whetherChina should learn from the West or from Japan, some advocates for thelatter position have argued that the existing structural framework of Chineseenterprises presents preconditions that favor taking the Japanese route. Morethan this, a popular assumption among these advocates involves a presumedclose affinity between Chinese and Japanese cultural roots. Japan's cultureof 'familism' (Jiazu zhuyi) is seen as the fountainhead of the strong 'enterpriseidentity' in Japan, harmonious Japanese management—worker relations andan emphasis upon human relationships among Japanese workers. They pro-mote too idealistic a picture of Japanese enterprise culture, but this positiveimage widely pervades Chinese perceptions of Japan's industrial success.

Some Chinese academics point out that the slogans used by Chinese state-run enterprises are still too centered on national goals to inspire workers'identification with their enterprise.37 It is believed that if only Chinese'collectivism' could be activated by instilling a Japanese-style 'enterpriseculture' {qiye wenhua), e.g. introducing company songs, wearing companybadges and uniforms, and daily recitals of a company motto, then Chineseworkers' identity and solidarity with their enterprises would be enhancedand in time this would help to raise Chinese workers' incentives.38 Someenterprises in the past few years have imported such practices in an effort tonourish an 'enterprise culture', the codeword for adopting the Japaneseenterprise model.39 Enthusiasts for the model have established 'enterpriseculture associations' in several major cities, to realize the mission of trans-forming Chinese enterprises into efficient, modern, civilized, harmonious,people-centered work places a la the image of Japan.40

3 7 See, for example, D o n g Xij i tn and Guo D i n (1988) , 'Zhongn Qiye: Peiyang he Fayang Qiye

Jingshen Yitongdian Chutan' ('Chinese and Japanese Enterprises: A Preliminary Investigation into the

Similarities and Differences in the Cultivation and Development of Enterprise Spirit'), Sbtbui, N o . 10, 3 2 -

3 6 . Also Lu Siulan ( 1 9 8 9 ) , 'Riben Qiye shi Zemmayang Diaodong Zhigong Jij ixingde ( 'How Japanese

Enterprises Instigate Staff and Workers' Incentive1), Shanghai Qiyt (Sbtxghai Enttrpriu), N o . 11, 37—38.3 8 This kind of argument can be found in many short articles published in China in either general,

academic or management magazines. They all tend to be cliche*, with conclusions arrived at without any

empirical studies. For a sampling of such articles, see Sbthdi (Society), N o . 11 , 1988 , 3 2 - 3 6 ; Shthni, N o .

5 , 1988 , 20—21; and Waigm) Jingji dunli (Foragn Ewwmia and MMOMgemtnt), reprinted in Zbonggvo

Ramiti DMXKI Shutmo Ziluu ZJxngxm, Gongji Qijt Gusnli, N o . 6 , 1987, 1 3 2 - 1 3 4 .

" This information was provided by a researcher at the Workers' Movement Institute (Gngyin XMTJIUU)

in Beijing. There seems to be a consensus among some academics and trade unionists in Beijing that Capital

Steel, a national model of a successful state enterprise, has cultivated a commendable enterprise culture.4 0 I know of theexistenceofsuchassociations, made uprf academics, government omcialsand factory direc-

tors, in Beijing, Shenzhen and Guangzhou. There is also an umbrella peak organization located in Beijing.

466

at The A



Dow

nloaded from



An in-depth comparative survey conducted by Japanese academics intoChinese and Japanese workers' attitudes provides some interesting data onthe potential for a convergence toward the Japanese model. The study,conducted in 1987 (Sengoku Tamatsu, 1988), a few years after Chinese stateenterprises had switched over to the managerial responsibility system, mea-sured Chinese workers' attitudes towards their own work and management,and their self-perception and identification with their workplaces. It wasclaimed that a 'laziness disease' worse than the 'British disease' had becomeentrenched among Chinese workers,41 but at the same time the surveyrevealed that both Japanese and Chinese workers perceived themselves asorganically linked to their workplaces above all other social institutions. (Incontrast, the Americans identified their social relationships primarily withtheir residential neighborhood.)42 Unlike the Japanese, though, Chineseworkers did not see their self-interest as closely linked to their enterprises.

Surprisingly, when asked to choose between competition or egalitarianism,a higher percentage of Chinese workers (69%) than Japanese workers (57%)opted for competition.43 But the Chinese workers also exhibited a highpropensity toward dependency, and their incentive to work was highlycorrelated to whether the manager exhibited paternalistic behavior and ahuman touch, and showed personal concern for the workers outside theworkplace. Harmonious management—worker relations, a symbolic visit tothe shopfloor by the manager and the leader's own personal character,whether he was fair, morally upright and hardworking, were all factors thatseemed crucial in instigating Chinese workers' enthusiasm to work. Verysimilar to Japanese workers, the Chinese workers' morale and their sense ofpersonal worth were highly correlated with external appreciation and respectrather than the nature of the work itself, such as whether the job itself wasinteresting, important or creative. (Again in contrast, the nature of the workwas much more important to the American worker.)44 Remuneration, forboth Chinese and Japanese, was a low priority. Somewhat different from theJapanese workers sampled, the Chinese workers would want a right to speakup when an important decision was to be made.45

41 The research team set up in 1987 was headed by Prof. Sengoku Tamatsu of the Japanese YouthResearch Institute. The original findings were published in Japanese, and were translated in Chinese in aslightly revised version (Sengolcu, 1988). The survey covered (bur Japanese factories and one Japanese depart-ment store, and eight Chinese factories and one Chinese department store. The questionnaire was designed tobe cross-nationally comparative for Chinese, Japanese and American workers' attitudes. This appears to bethe most rigorous study of Chinese workers' attitudes that has yet appeared in Chinese publications. (Itshould be noted, parenthetically, that the thrust of Sengoku Tamatsu's study is to demonstrate the differencesbetween Japanese and Chinese workers, rather than to seek out similarities in attitudes.)

4 2 Ibid., No. 6, p. 29.4i Ibid., No. 7, p. 28.** Ibid., No. 7, pp. 2 6 - 2 7 .Ai This finding is supported also by a Chinese trades union federation survey which found that 90%

467

at The A



Dow

nloaded from



7. Conclusion

At present, the Chinese employment system in the state sector is in transitionand has already shifted considerably away from the state-oriented system.The likelihood of a reversal is slight. But faced with the challenge of themarket-oriented practices of the non-state sector, what are the chances thatChina's state enterprises will gravitate toward the organization-orientedJapanese model? Pre-existing attitudes carried over from the Maoist state-oriented system indicate that the Chinese workers could become 'companymen'; that like the Japanese they do prefer paternalistic managers; that theywould work much harder if others showed appreciation for their work; andthat, unlike the British and Americans, they do not regard management'sand workers' interests as zero-sum and contradictory. With state enterprisesbeing granted greater autonomy and with the enactment of the EnterpriseLaw, the preconditions are there for an organization-oriented system todevelop in Chinese state enterprises. The state sector's shift to a marketeconomy does not have to be accompanied by a market-oriented employmentsystem. If 'socialism with Chinese characteristics' is to have any meaning atall, an organization-oriented system in China's state enterprises may yet beits substance.

Acknowledgements

I am grateful for comments on the paper by Barrett McCormick, StephenFrenkel, the three anonymous readers and the participants at the workshopon 'East Asian Labor in Comparative Perspective', sponsored by the Instituteof Asian Studies, University of California, Berkeley, in 1993, where thepaper was first presented. Thanks also go to Jiang Shu for his researchassistance and special thanks are due to Jonathan Unger for his penetratingcritique and editing. The fieldwork was funded by an Australian ResearchCouncil Fellowship Support Grant. The author is currently an AustralianResearch Council Fellow hosted by the Australian National University.

References

Adler, P. S. (1993), Time-ind-Motion Regained,1 Hmrvrd Busintss Remtw, Jan.-Feb , 97-108.

Akio Takahara (1992), The Politics e/Vage Policy i* Post-rwolxthivry China. McMillan: London.

Bank, J. (1987), Teaching the Chinese About Quality Circles —A Personal Account,' in M. Warner(ed.), Mgnugmaa Rtformi in Chin*. Francis Pinter: London, pp. 99-110.

of state workers think that major issues proposed by management should be approved by the staff-and-workers councils (Feng, 1994, p. 247).

468

at The A



Dow

nloaded from



B*o Guangqian and Guo Qing (1991), Yuan Baobua Fangtanlu (Interview records with Yuan Baohua),Remmin Cbubansbe. People's Publishing House: Beijing.

Chan, A. (1991), The Social Origins and Consequences of the Tiananmen Crisis,' in D. Goodman andG. Segal (eds), Cbitu in tbt Nineties: Crisis Management and Btyond. Clarendon Press: Oxford, 105-130.

Chen Jo-hsi (1978), 'Residency Check,' Jen Hsiu-lan' and 'Chairman Mao is a Rotten Egg,' in TheExecution of Mayer Yin and othtr Stories from the Gnat Proletariat Cultural Revolution. Indiana UniversityPress: Bloomington, IN.

Curtain, R. (1993), 'Recent Developments in Human Resource Management Practices in JapaneseEnterprises,' unpublished paper presented at the Australian National University, 17 December.

Dore, R. P. (1973), British Factory-Japanese Factory: The Origins of National Diversity in Industrial Relations.George Allen 4 Unwin. London.

Dore, R. P. (1987), Taking Japan Seriously. A Confucian Perspective on Leading Economic Issues. The AthlonePress: London.

Dore, R. P. (1989), "Where We Are Now: Musings of an Evolutionist,' Work. Employment & Society, 3,425-466.

Dore, R. P. (1992), 'International Markets and National Tradition: Japanese Capitalism in the 21stCentury,' Social Science Centre Occasional Paper no. 5, University of Hong Kong.

Dreery, S. (1991), The Deregulation of Industrial Relations,' Australian Universities Review, 31, 3 -7 .

Ewer, P., I. Hampson, C. Lloyd, J. Rainibrd, S. Rut and M. Smith (1991), Politics and tin Accord. PlutoPress: Leichhardt, NSW.

Feng Tongqing (1994), Zhongguo Zhigong Zhuankuan Diaocha de Zongheferm,' (An Analysis of aSurvey of the Situation of Chinese Staff and Workers') in Jiang Liu et al., Zhonggm 1993-1994: SbebuiXingsbi Fenxt yu Yuce (Analysis and Prognosis of the Social Situation in China 1993-1994). Social ScienceAcademy Beijing: Beijing.

Florida, R. and M. Kenney (1991), Transplanted Organizations: The Transfer of Japanese IndustrialOrganization to the US,' American Sociological Review, 56, 381-398.

Harris, M. and G. Hofstede (1990), The Cash Value of Confucian Values,' in S. R. Clegg and S G.Redding (eds), Capitalism in Contrasting Cultures. Walter De Gruyter: Berlin, pp. 383-390.

Henderson, G. E. and M. S. Cohen (1984), The Chinese Hospital. A Socialist Work Unit. Yale University:New Haven, CT

Hoffman, C. (1974), The Chinese Worker. State University of New York Press: New York.

Howard, P. and R. Howard (1992), 'China's Enterprise Management Reforms in the Eighties. Techno-cratic Versus Democratic Tendencies,' in W. Wedley (ed.), Advances in Chinese Industrial Studies, Vol. 3.Changes in the Iron Rice Bowl: The Reformation of Chinese Management. JAI Press: Greenwich, CT, pp 3 7 -58.

Karsh, B. and R. E. Cole (1968), 'Industrialization and the Convergence Hypothesis: Some Aspects ofContemporary Japan, 'Journal of Social Issues, 24(4), 45 -63 .

Kazutoshi Koshiro (1983), Development of Collective Bargaining in Post-war Japan', in T. Shirai (ed.),Contemporary Industrial Relations in Japan. University of Wisconsin Press: Madison, pp. 205-257.

Lewis, G. and S. Wanning (1994), Discourse about "Learning from Japan" in Post-1979 MainlandChinese Management Journals,' Issues and Studies, 30(5), 63-76 .

Lincoln, J. R. and A. L. Lalleberg (1990), Culture, Control, and Commitment: A Study of Work Organizationand Work Attitudes in the United States and Japan. Cambridge University Press: Cambridge.

Lu Feng (1992), 'The Origins and Formation of the Unit (Danwei) System,' Chinese Sociology andAnthropology, 25(3).

Mackie, J. A. C. (1992), Overseas Chinese Entrepreneurship,' Asian Pacific Economic Literature, 6, 41 -64 .Meaney, C. S. (1988), Stability and the Industrial Elite in China and the Soviet Union, Institute ofEast Asian Studies, University of California: Berkeley.

McCormick, B. and J. Unger (eds) (1995), China After Socialism: In tbt Footsteps of Eastern Europe or EastAsia? M. E. Sharpe: Armonk.

Ministry of Labor Qapan) (1990), Basic Survey on Wage Structure. Ministry of Labor: Tokyo.

469

at The A



Dow

nloaded from



Minor, M. and B. C. Hamm (1991), The "Little Dragons" as Role Models,' in O. Shenkar (ed.),Organization and Management in Cbttu 1979-1990. M. E. Sharpe: Armonk, pp. 85 -95 .Richman, B. M. (1969), Imiustrud Socuty in Communist China. Random House: New York.

Sengoku Tamatsu (1988), 'Chinese Work Ethics — From a Survey of Consciousness among Japanese andChinese Youths,' (Zhongguv dt laodong Ulun — zi nibong qingntan gongren yisbi diaocba) Contemporarj YouthRtstarch (Dangdai Qmgnian Yanjiu), 6, 22 -30 and 7, 24-31 .

Shirk, S. L. (1981), Recent Chinese Labour Policies and the Transformation of Industrial Organizationin China,' China Quarterly, 88, 575-593.

Thompson, P. (1992), 'Disorganized Socialism: State and Enterprise in Modern China,' in L. Smith andP. Thompson (eds), Labour in Transition: Tbt Labour Process in East Europe ami China. Routledge: London.

Vogel, E. (1965), 'From Friendship to Comradeship: The Change in Personal Relations in CommunistChina,' China Quarterly, 21, 46 -60 .

Walder, A. G. and Gong Xiacntia (1993), 'Workers in the Tiananmen Protests: The Politics of theBeijing Workers' Autonomous Federation,' Tbt Australian Jottrnal of Chinese Affairs, 29, 1-30.

Walder, A. G. (1986), Communist Neo-traditionalism: Work and AMtbority in China Industry. Universityof California Press: Berkeley, CA.

Warner, M (ed.) (1987), Management Reforms in China. Frances Pinter: London.

White, G. (1987), 'Labour Market Reform in Chinese Industry,' in M. Warner (ed.), Management Reformstn China. Frances Pinter London, pp. 113-126.

Wilkinson, B. and N. Oliver (1990), 'Japanese Influences on British Industrial Culture,' in S. R. Cleggind S. G. Redding (eds), assisted by M. Carter, Capitalism in Contrasting Cultures. Walter de Gruyter:Berlin, pp. 333-354.

Womack, B. (1991), 'Review Essay: Transfigured Community: Neo-traditionalism and Work UnitSocialism in China,' China Quarttrly, 126, 313-332.

Zhu Xiaoyang and A. Chan (1994), XUngibtng yu Anliu — 1989 de Sbebui Yundong (Symbolism andUndercurrents: the 1989 Social Movement) Daohe Chubanshe: Taipei.

470

at The A



Dow

nloaded from


Anita Chan, “Chinese Enterprise Reforms: Convergence with the Japanese Model?”, Industrial and...

Documents

Transcript of Anita Chan, “Chinese Enterprise Reforms: Convergence with the Japanese Model?”, Industrial and...