Industrial relations in contemporary China are politically constrained.Footnote 1 Collective bargaining and collective contracts – classic institutions in many industrialized economies that allow trade unions to bargain with employers to improve labour standards – have been part of China's labour laws since 1994.Footnote 2 However, they have failed to function in a meaningful way.Footnote 3 This failure is owing to the quadripartite dilemma in China's industrial relations system, in which the government entities, employers, trade unions and workers act independently.Footnote 4 In particular, the All-China Federation of Trade Unions (ACFTU), rather than the labour representative in a typical tripartite system, depends on the Chinese Communist Party (CCP) and, at best, operates as the referee between workers and employers. Consequently, workers often have to resort to informal means, usually wildcat strikes or help from labour NGOs, when faced with a labour dispute. This is particularly true in cases when workers must assert interest-based claims beyond the framework of existing laws.Footnote 5 Most critics predict that unless the political constraints on independent trade unions and strikes change, collective bargaining in China will never effectively engage and protect workers.
This assumption was challenged in 2010 when a wave of strikes, starting at the Nanhai Honda auto parts plant, spread throughout Guangdong province.Footnote 6 During these actions, striking workers, who distrusted the official unions, engaged in collective bargaining. Sparked by the Nanhai Honda strike, these cases were labelled as “strike-led collective bargaining” or “collective bargaining by riot.”Footnote 7 Some scholars, in their efforts to identify a “taxonomy” of collective bargaining in China, regarded this type of bargaining to be the most “authentic,” “effective” or “meaningful.”Footnote 8
From 2012 to 2017, we visited 12 companies located in two core cities where the strikes, and subsequently the newly established collective bargaining, took place. These companies had significantly increased their wages and union recognition. At the same time, strikes were not as frequent as before, and those that did occur were not nearly as influential as the strikes that took place in 2010.Footnote 9 During the period under study, the political constraints on strikes and independent labour organizations remained just as restrictive as in previous years.Footnote 10 In fact, Guangdong's politics turned less worker-friendly after 2013 when the new political leadership took over. The local state, which facilitated collective bargaining in the aftermath of the strikes, no longer played any visible role at the enterprise level.
These developments beg the following questions: is the new practice of collective bargaining genuine? If so, how is that even possible? Previous studies have advanced a pessimistic outlook for collective bargaining in China, quite rightly pointing out the top-down constraints of both the legal and the political systems or the unsustainability of informal bottom-up forces.Footnote 11 The cases we studied challenge those negative views.
We argue that in these cases in Guangdong province, workers have been engaged in collective bargaining through “moderated mobilization” by enterprise-level unions. “Mobilization,” loosely defined as “the process by which a group goes from being a passive collection of individuals to an active participant,”Footnote 12 is the key measure in assessing the extent to which these unions are engaged with workers in collective bargaining. At the same time, such mobilization is “moderated,” both as a strategy in bargaining with their employers and as a forced option owing to broader political constraints. A full display of the associational power through strikes, typical in “collective bargaining by riot,” is rare. Although enterprise unions occasionally signal the possibility of facilitating or tolerating strikes to counteract employers’ hard resistance, they pragmatically avoid overt conflicts. This new model of collective bargaining, despite its limitations, signals relinking workers with Chinese trade unions at the grassroots level.
This paper, divided into four parts, focuses on the new model of collective bargaining in south China and argues that enterprise-level trade unions – organizations that previous studies often neglected – are at its core. Enterprise unions have made progress in binding the split between the official union system and workers. Based on intensive site visits and interviews, the paper analyses how collective bargaining has become a central mechanism in the enterprises we studied and explains both the rules and practices of “moderated mobilization.” Finally, the paper sums up the implications of this model for China's quadripartite industrial relations system.
Collective Bargaining in the Quadripartite System
A key difference between China's quadripartite system and the classic tripartite system is that there are more than three major actors – most visibly four.Footnote 13 Research on everyday labour practices, union elections and dispute resolution reveals that the workers are themselves a player, along with the government, the employer and the trade union.Footnote 14 Trade unions in China are not pure representatives of workers, but play a mediating role between the party-state and labour as well as between workers and employers.Footnote 15 The problem lies with the domination of the state, of which the official trade union forms a part. Outside of the official system, workers and their informal representatives may have their own goals and means. The generally problematic practice of collective bargaining best demonstrates this dilemma.
Most studies on collective bargaining emphasize the highly questionable roles played by the state and the ACFTU. Others, particularly since 2010, have openly advocated for workers or labour NGOs to become the bottom-up drivers.Footnote 16 In sum, the two sides push for collective bargaining from opposing directions and are separate from one another. Few studies have considered the possibility of actually linking workers and trade unions in the quadripartite system, which would mean that trade unions act in the interests of workers in conducting regular collective bargaining.
Top-down mechanism and its limitations
Many argue that the problem with collective bargaining is rooted in its top-down implementation. In the 1990s, when the split between the interests of labour and capital became inevitable in the emerging market economy, the state slowly began to promote collective bargaining nationwide.Footnote 17 However, most collective contracts, if they existed at all, contained clauses directly from the labour laws.Footnote 18 These contracts were not the result of labour–capital negotiations, but an “ineffective by-product” of the law.Footnote 19 In response to political pressure, many employers just signed whatever contract was offered by union cadres without any actual bargaining. As such, the number of collective contracts skyrocketed,Footnote 20 but they were merely a formality and did not change the low wages and exploitative conditions experienced by the majority of Chinese workers.Footnote 21
In effect, the state, faced with intensive labour–capital conflicts, attempted to regulate labour relations through legalized and contractual means. Collective bargaining thus became an important part of the state's technocratic governance.Footnote 22 However, the potential connection between collective bargaining and strikes had always been a concern, thus the party-state only half-heartedly promoted collective bargaining.Footnote 23 This was evident in China's flawed Labour Law. Although the law clearly stated both the scope and content of collective contracts, the bargaining procedures to create such contracts were not mentioned at all.Footnote 24
However, even supposing bargaining procedures actually existed, it would hardly matter. It was impossible to separate the ACFTU from the Party in the “state corporatist structure.”Footnote 25 Following several labour movements in the post-Mao era, the ACFTU stopped claiming to be an “autonomous labour organization.”Footnote 26 In any conflict between the dualist identities of the ACFTU – as part of the state apparatus and the official labour organization – the first often rules.Footnote 27 In implementing collective bargaining, the ACFTU's quota system, which determined the number of collective contracts signed, was carried out as an administrative task. Local federations of trade unions were mainly in charge of fulfilling those quotas and reporting to the Party.
Nevertheless, a few “model” cases did exist and were publicized by the ACFTU. For instance, in the late 1990s, a top Chinese manager led collective negotiations in Hangzhi, an electronics joint venture in Zhejiang province.Footnote 28 In another case centring on the Wenling 温岭 woollen sweater sector, employers initially pushed for sectoral bargaining in 2003 to solve the chaotic labour market competition by unifying piece rates.Footnote 29 But the researchers who studied those examples faced the same problem: without the charismatic manager in Hangzhi, who was empowered by the state-owned mother company, or the strong support of the local state in Wenling, could there have been any actual collective bargaining? In those “model” cases, workers never played any active role.
Bottom-up forces and the problems of sustainability
Although the Party and the ACFTU may be powerful organizers of large-scale activities and champions of labour legislation, their efforts seldom involve ordinary workers.Footnote 30 In practice, workers are routinely excluded from the bargaining process. When referring to collective bargaining's bottom-up forces, most researchers point to either the strikers or the labour non-governmental-organizations (NGOs). But, this leaves out the grassroots organizations of the ACFTU.
Without a doubt, striking is fundamentally a bottom-up force. Research on the strikes by migrant workers in Guangdong in the early 2000s showed strong signs of class solidarity. However, such solidarity dissolves as soon as workers disperse after the dispute.Footnote 31 More recent studies have recorded cases of effective collective bargaining during or after strikes. A study of strikes in the Pearl River Delta emphasized workers’ informal organizational power in bargaining.Footnote 32 Workers, rather than trade unions, went on strike, and the local government or local union officials intervened to facilitate the negotiations between strikers and employers. Nevertheless, these were only one-off successes, and the occasional efforts of some workers to reorganize trade unions failed.Footnote 33 Accordingly, collective bargaining was only a temporary means for workers.
Another force – labour NGOs – is depicted by some scholars as defending labour rights outside of the factories. NGO activism has also been described as “displaced unionism.”Footnote 34 In particular, “movement-oriented NGOs” in south China have advocated collective bargaining to resolve labour disputes, largely inspired by the 2010 strikes.Footnote 35 Nevertheless, some scholars have noted internal problems with labour NGOs, such as their small scale and limited abilities, and lack of transparency and democracy.Footnote 36 In practice, many labour NGOs only have temporary and unstable connections with workers.Footnote 37 More importantly, the same works admit that labour NGOs are both legally and practically restricted. The state is unlikely to allow politically independent unionism in the near future. Many of the collective bargaining cases initiated by labour NGOs remain localized and ad hoc, revolve mostly around issues of relocation compensation and social insurances, and have been heavily repressed, especially since 2015.Footnote 38
Given the many obstacles to collective bargaining, previous studies have reached the same dead end. The top-down approach of the party-state and official trade unions does not involve workers and thus mostly results in the mere formalities of collective contracts; the bottom-up forces, represented either by strikers or labour NGOs, barely survive in the current socio-political context. In a few excellent studies on workplace bargaining, “collective bargaining by riot” is regarded as meaningful. But, at the same time, its future has been questioned,Footnote 39 or has been predicted to shift towards “party state-led” as opposed to “worker-led” bargaining, based on workers’ right to strike and to organize independently.Footnote 40
Noticeably, those post-strike studies were conducted only one or two years after 2010, at a time when the party-state was deeply concerned about labour militancy and was thus intensely engaged in building a “controllable” system. However, since then, the reality has turned out to be more complex than predicted, despite the fact that the legal and political constraints have remained virtually unchanged. Collective bargaining has become widespread in Guangdong province. Most importantly, it has transformed into a meaningful model, led by worker-centred enterprise unions.
Research Design
This study identifies and explores the institution that fills the gap between the constraints of the party-state and the often temporary and informal power of NGOs and strikes: enterprise unionism.Footnote 41 Enterprise-level trade unions are a special entity in the official union system. Previous studies point out that the ACFTU is not monolithic, and focus mainly on the relationships between the central and local branches.Footnote 42 This study further reveals the many layers within the ACFTU, among which the enterprise unions are at the most grassroots level. Legally speaking, enterprise unions are cells of the ACFTU, but they are not included in its administrative structure, especially in the vast private sector. What is particularly intriguing about our cases are the new linkages between workers and their enterprise unions, through which the previously unorganized or informally organized power of workers has been translated into the power represented by official trade unions at the grassroots level.
In our cases, meaningful collective bargaining is the result of the enterprise unions’ newly gained associational bargaining power. Labour's bargaining power comes in various types.Footnote 43 The structural bargaining power of autoworkers has long been the key to labour movements worldwide.Footnote 44 Workers have occasionally demonstrated this power in China, the struggles of dispatched workers in assembly plants being one example.Footnote 45 Similarly, the 2010 strikes in many China-based Japanese auto supply factories were attributed to external factors that gave the workers leverage: labour shortages and the seamlessly organized production and just-in-time delivery system of the auto industry.Footnote 46 Although we have not observed a visible increase in the structural bargaining power of ordinary workers,Footnote 47 its form has changed from an unorganized, informal power to the formal, associational power of the enterprise unions. In the past, applying the concept of associational power to China was problematic; official union membership was often automatic and included both production workers and managers. Accordingly, the strength of this newly acquired associational power should not be evaluated by considering union membership but rather by gauging workers’ support for, and willingness to participate in, union activities.
Rather than a normative analysis of what collective bargaining or democratic unionism should be, this study attempts to illustrate the real-world dynamic between the unions and workers in the new collective bargaining practice. Particularly, it focuses on what the enterprise unions have done to gain workers’ trust and support, and in what conditions this is accepted or tolerated by employers and higher authorities.
From 2012 to 2017, the authors closely observed labour relations in 12 China-based Japanese auto suppliers and participated in two surveys, covering 277 employees in 2013 and 243 in 2017.Footnote 48 This particular sector of the auto industry was heavily involved in the 2010 strike wave and post-strike bargaining. In many ways, the pioneering rules for bargaining that came out of the 2010 strikes were developed for use in this industry. Consequently, these suppliers have developed procedures for union elections and bargaining practices similar to each other. As we will show, the major differences between these cases are the products and production and the working styles of the elected union chairs.
We selected two enterprises – A and B – for this case study. A and B are relatively comparable but they produce core and less-core products and also have two contrasting union styles. Established in the early 2000s, both A and B had about 2,000 employees, 65 per cent of whom were line workers in 2014; both used Japanese management methods; and both were located in major industrial parks in Guangzhou. At the same time, A was a world-leading producer of mechanical and electronic control systems, but B produced less crucial electronic parts like window switches; A was a first-tier supplier, but B was only second tier.Footnote 49 In terms of union styles, A's union chair was rather tough and assertive in bargaining, whereas B's chair was softer and sought cooperative solutions. These differences made it possible to examine whether the collective bargaining was genuine and to identify any common features.
Although it might not be possible to consider these cases as statistically “representative” because the total number of samples is unknown,Footnote 50 A and B were among the Guangdong enterprises that experienced strikes in 2010, and their cases can be considered as more “normal” than the Nanhai Honda case as, compared to the latter, they did not attract as much attention both domestically and internationally, and thus did not have any overt interference from higher authorities.Footnote 51
With a focus on collective bargaining, the data are mainly drawn from ten months’ observation of daily union activities and bargaining sessions between 2013 and 2015, as well as interviews with 40 workers, trade unionists and managers, and four district- and city-level union officials up to August 2017. Interview questions included both origin and development of the collective bargaining, the interviewee's personal role in the process and their evaluation. About 30 interviewees were line workers, including those who had engaged in strikes previously. The interviewed trade unionists, managers and officials had the best knowledge of the model since they had either initiated it or were implementing it.
Collective Bargaining as a New NormFootnote 52
In the enterprises we studied, collective bargaining had become a regular practice. It took place at least twice a year: once for wage increases and another time for annual bonuses. Usually, collective bargaining on wage increases included more issues and thus was more complex than the other. By 2014, a bottleneck had appeared and the enterprise unions increasingly encountered difficulties. As the wage levels had increased year by year, the employers wanted to exert more control and thus became less cooperative. The pressure from the employers made the 2014 bargaining a useful test of the new model, as it was conducted under more normal or stable conditions than in the aftermath of the strikes. Without recurring strikes or visible state interference, the enterprise unions managed to engage in collective bargaining by both designing worker-centred bargaining rules and utilizing workers’ collective power pragmatically.
Designing the rules: 2010–2013
Through learning by doing, the trade unions in both A and B enterprises had established a worker-centred bargaining process. Even after the strikes, there was no concrete guidance in either the Chinese labour laws or local regulations on how an enterprise union should conduct collective bargaining.Footnote 53 Company A's enterprise union took the lead. After consulting with a wide variety of scholars and practitioners, a legal expert from the union committee drafted the “Rules of wage collective negotiation” (Rules hereafter), and both the union and the company agreed to abide by them. The Rules stipulated general principles such as selecting negotiators, the content of the sessions, negotiation procedures, dispute resolution, etc. Owing to the leading role of Company A in this sector, the Rules became a template that was used by other auto parts suppliers. As a result, the bargaining processes in most suppliers in the region were more or less similar.
A key part of the preparation for collective bargaining was selecting negotiators. The exact number of labour negotiators varied, for example five in Company A and seven in Company B, but the composition was similar. On the labour side, the chief negotiator was the enterprise union chair, as mandated by the Labour Law. For the other negotiators, half were from the democratically elected union committee and half were elected specifically for bargaining. All union committee members participated in collective bargaining through a rotation process. “Because collective bargaining accounts for nearly 70 per cent of the union work,” explained one union chair, “each committee member shall become a negotiator so as to be educated about their union duties.”Footnote 54 The other labour negotiators were elected by either the workers or members of the workers’ congress, who were mostly line workers. This format followed the suggestion of a city-level union official, who stated that, “Given the lack of representativeness of most Chinese trade unions, labour negotiators should not be all from the unions.”Footnote 55 In fact, the members of the union committee (for example, 13 people for Company A) were democratically elected after 2010.Footnote 56 Still, the Rules kept the elected negotiators as a safeguard. Because the union committee and chair had terms of three or five years, the election of temporary labour negotiators was aimed at ensuring all had an equal voice and to meet new demands.
Formulating the labour proposal was a group effort. A survey conducted among all workers and small group discussions were the standard procedures. In practice, usually a well-formulated questionnaire was distributed to all workers, asking about their expectations and concerns weeks before bargaining. Moreover, the union chair and negotiators would meet with individuals and labour groups to gain a better understanding of how workers thought. In addition to official statistical data, information about wage levels and the outcomes of collective bargaining in neighbouring enterprises was also collected. The fact that many workers had spouses or friends in other factories provided informal but reliable information.
Normally, external information was used to assess whether a proposal was reasonable. As such, it was often cited as supporting evidence during bargaining. But workers’ expectations – both the results of the survey and labour meetings – were the foundation for the union proposals. Survey responses often elicited many, and often widely different, demands. For instance, in Company B, workers asked for 66 different types of benefit increases. In order to solidify support for the proposal, the union chair showed all the items to 70 leaders of various workers’ groups. This allowed those leaders to identify their core concerns. Afterwards, the top five on the list were prioritized.
The most difficult issue, and the core bargaining topic, was the proposed wage increase. For instance, in 2014, Company A's workers’ demands ranged from a 9 per cent to a 36 per cent wage increase. With the consent of more than 80 per cent of the workers, the labour negotiators eventually proposed a 15 per cent increase. Similarly, workers in Company B responded to their survey with diverse demands. Simply proposing an average or median number proved problematic. Through individual and group discussions, the labour negotiators knew that low-ranking line workers expected an absolute wage increase of 140–160 yuan per month. Thus, this became the bottom line.
During the bargaining, workers were quickly informed of, and were closely consulted about, ongoing developments. To keep workers in the loop, a clause in the Rules stated that “all meeting briefings should be issued on the day of meetings and formal minutes should be circulated within two to three days.” Both A and B unions strictly followed this stipulation. Another innovation was non-voting labour delegates. In Company B, 35 non-voting labour delegates, mostly line workers and group leaders from each department, were present in the bargaining room. Besides advising negotiators, they guaranteed the timely delivery of information to workers.
Gaining workers’ support: 2010–2013
After several years, the worker-centred collective bargaining process had successfully involved the majority of workers, and the positive outcomes of collective bargaining further proved the worth of enterprise unionism to them. As workers’ participation in collective bargaining became a regular and natural practice, a new worker–union relationship emerged in the enterprises.
Collective bargaining achieved substantial outcomes by 2013. Workers received higher wages and better benefits, not only compared to what they had received before but also compared to workers in similar enterprises in the region. For instance, Company A had always been a top supplier of high tech and quality products, but workers’ wages before the 2010 strike were very low, for example 1,310 yuan for new workers. The first collective bargaining resulted in a 400 yuan base wage increase and 438 yuan in extra subsidies per month. On top of this, each worker received an annual bonus equal to five months of base wages. After two years, Company A's wages were the highest in the region. Similarly, Company B, with its less skilled workers and lower-end products, had a base wage of 1,120 yuan for new workers in 2010. Prior to the strike, workers’ monthly wages increased by only 20 yuan every year, but collective bargaining led to annual wage increases of 15 per cent on average. Importantly, the work did not become noticeably more burdensome, nor were working hours extended.
Compared to similar competitors without collective bargaining, these enterprises had much higher wages. By 2014, the lowest-ranking workers in both companies were paid at least 60 per cent higher than the local minimum wage, which was the common base wage in many other enterprises. Typically, enterprises that specialize in small auto electronic accessories, such as Company B, have tight profit margins and are thus known for paying low wages. However, Company B paid 2,350 yuan as its base wage to new workers in 2013, while a worker in Company S, which manufactured similar products in the same industrial park, only received 1,700 yuan. In addition, Company B also paid an annual bonus of three months’ wages, while Company S only paid one month.
Moreover, the employers also accepted enterprise unions as a negotiating partner through the new process. Both companies began to provide office space for the unions. Before the strike wave, the union staff were all part time. For the first time, the enterprise union in Company A was able to convince the management through collective bargaining to hire a full-time union clerk in 2011, and two more in 2013. The clerks mainly implemented union committee policies and decisions, such as preparing regular reports and planning activities, and managing union funds. Other enterprise unions also followed suit and added a request for similar staffing to their bargaining agenda. In 2012, the enterprise union in Company B was provided with a union staff position. Nevertheless, while the unions regarded it as a success to make the companies pay for union clerks, financial reliance was always a threat to the unions’ independence.Footnote 57
While the unions believed that collective bargaining was their most important task, individual workers also actively joined in the process. In both companies, from 2011 to 2016, between 87 per cent and 96 per cent of all workers participated in the surveys before collective bargaining.Footnote 58 During bargaining, 60 to 80 union group leaders, mostly line workers or supervisors, met frequently. Before 2010, it was normal for the union chair to speak, but no one else. In the meetings we observed, union group leaders freely argued with the chair and among themselves: “Because the meeting is useful … In the past you might say things but it was useless. Now the union would follow up and make sure to get a reply from the company.”Footnote 59 Outside of formal procedures, workers also closely interacted with the unions. During bargaining, workers contributed information they had gathered about surrounding companies. Typically, workers commented, “not just me, my workmates are all like this. We gather to talk about wages and unions,” and “most of us believe the union fights for our benefits.”Footnote 60
The worker–union relationship had been reinvigorated since the strikes. Workers perceived it positively:
the enterprise union was “re-born.” It had earth-shaking changes. Before, the union had no clear position. As union members, we only had some holiday gifts or sport activities. Now the union knows its role – representing our interests.
Now the union has a big role. Whatever question I have, I seek a solution through them.Footnote 61
Workers now went to the union chairs, who were often working inside the workshop, or directly to the union offices with their problems. For companies without any state-owned enterprise tradition, this was very rare. According to a union chair, “sometimes a worker thought of something, like a bad meal in the canteen or was just feeling lonely, and could not sleep. He/she would call me at 2 or 3am in the morning.”Footnote 62 More than 90 per cent of interviewed workers explicitly appreciated the work the union did and believed that the unions fought to make reasonable deals. In addition, two surveys reported similarly positive assessments.Footnote 63 In 2013, 75.5 per cent of 277 randomly surveyed workers in the industrial parks where A and B were located, the majority of whom were in enterprises with collective bargaining, regarded bargaining as “satisfactory” or “very satisfactory.” In the 2017 survey, 88.3 per cent of 243 workers believed that collective bargaining was “useful” or “very useful.” Furthermore, 70 per cent of them selected unions and union delegates as the primary channels through which they would express their demands, along with direct supervisors and department managers.
Utilizing the power: 2014 testFootnote 64
Until 2013, collective bargaining had gone rather smoothly and was marked by cooperative employers, even though most Japanese firms in China encountered market uncertainties. Both labour and management came to expect rough proposals from the other that were along similar lines to what was proposed the year before. Agreement was reached within three or four rounds of bargaining. However, this pattern was disrupted in 2014. Compared to prior sessions, the bargaining in 2014 looked similar to bargaining in the West – more debate and less give and take. Faced with firm resistance, the enterprise unions relied on both formalized engagement and the strong support of workers. Working within two major constraints – the specific conditions of each company and the broader political restraint on strikes – the unions “moderated” the use of their mobilizational power by avoiding open conflicts but developing pragmatic strategies to maximize their preferred outcomes.
The challenge confronting the unions was mainly economic, since Japanese suppliers faced common cost pressures from the production network and increasingly believed that the rapid wage growth in previous years was unsustainable.Footnote 65 The labour negotiators in Company A proposed a 15 per cent wage increase as well as several improvements to benefits by referring to wage rates since 2010 and the company's 2013 profits. But the managers would only agree to the benefits. They pointed out that workers already had the highest wages in the region; their counter offer was a 3.3 per cent increase. In Company B, the situation was similar. Initially, the union demanded a 13 per cent pay increase and the employer countered with 2.85 per cent. Not only did both employers want lower wage increases, they also wanted to raise the proportion of performance-based pay. Consequently, the bargaining became difficult and frustration spread widely.
Since Company A was an industry leader, the union's strategy was to take the lead by being the first to start collective bargaining. This set a benchmark for others in the region and showed Company A's management that the union had the influence to set standards. This was critical because enterprise unions had to continually demonstrate that they had the support of workers. In 2014, this show of support was especially needed.
Bargaining reached an impasse after two months of protracted negotiation. During fierce debate, the labour negotiators emphasized several times that the workers were behind their claims: “This is not just a union proposal, but based on the survey and agreed by the majority of workers;” “Not some individuals, but all workers demand these.” Disappointed by the management's resistance, the union chair “implied” the power of mobilization: “many workers are unhappy [about the employers’ offer]. We are deeply worried that something unfavourable may happen.” Unfortunately, the “threat” did not work. The employers only raised their initial offer by a further 0.1 per cent.
In response, the union pushed the workers to the front of their negotiating position. At the time, strike action was being staged in a nearby company. Some workers went to the union chair declaring, “We absolutely listen to you … Only if you say OK, will we go on strike.” The chair, who was a union committee member before the strike, was elected twice afterwards. He convinced workers to follow the Rules, which stipulated that a draft collective contract could only take effect with the approval of more than half the votes of the workers’ congress. Although the workers’ congress had always been part of the Labour Law, only since 2010 could workers truly say no to a contract they did not like. The draft agreement was vetoed twice by the members of the workers’ congress: the first time, not a single affirmative vote was cast. After 12 days of mediation by the local labour bureau and local unions, the workers’ congress of Company A again disapproved the draft, with only four affirmative votes out of 80 cast. “Workers are upset about the employers’ attitudes, because they think the employers show no sincerity,” the union chair made it clear to the company, “if there is no agreement, we can go to arbitration; if there is still no result, we may re-elect representatives to bargain.” Seeing no chance of compromise, the employers made concessions. No strike occurred.
Company B's union carved a different strategy for 2014. It chose to appear to be “softer” and, in a sense, more “personal.” The union chair deliberately waited for a few months until most neighbouring companies had reached their collective agreements. In that setting of peaceful resolution, it would be difficult for Company B to be the only enterprise not to succeed in entering into a collective agreement. The union chair was a mid-level manager and had been re-elected for another term.Footnote 66 Relying on his engineering background and social skills, he identified the crucial counterparts in management. Instead of human resource managers, he insisted on bargaining with the production and technology directors. He explained:
We exclude the HR people from bargaining, who are the main negotiators in most enterprises. They always want the lowest wages possible – this is why workers demanded a change in their HR managers in xxx. If we bargain with them, it will go nowhere … Now HR only implements the collective contract, but has no say in it.
In addition, before each formal session, the union chair engaged in preliminary bargaining with those managers. “In more than 80 days, I personally met employers 98 times.” The purpose was not only to “test the waters” but also to create a less hostile environment. He had learned his lesson. He described his first bargaining experience: “I pounded the table. The general manager did not think I could behave so tough … He lost face and seriously warned me. After a long time, he still intentionally ignored me even when I tried to talk to him.” These informal preliminary meetings had the desired effect in 2014: before the first formal session even started, the employers had raised the offer substantially.
Moderated Mobilization and the Quadripartite Dilemma
Through “moderated mobilization,” enterprise unions have created a new model of collective bargaining. Despite their divergent products and union styles, these cases feature workers’ engagement and support of their unions as well as the unions’ pragmatic and strategic use of such mobilizational power in bargaining. This model has advanced the existing quadripartite system of industrial relations by bridging the gap between the previously separated actors, at the grassroots level, yet still bears some imprints of the old system.
This new model of enterprise union bargaining did not come as a total surprise. After all, it began when enterprise union elections became more democratic after the 2010 strikes. As previous studies have also pointed out, workers in the auto sector had some form of bargaining power before the strikes,Footnote 67 and in south China's sunbelt, labour activismFootnote 68 and open-minded union officials are something of a tradition.Footnote 69 What is distinctive about this new model is that the workers’ power has been integrated into an associational form, the enterprise unions.
The representation of these enterprise unions has been questioned.Footnote 70 As a case in point, Elaine Hui and Chris Chan's study, which compared “direct” and “democratic” elections in the West with elections in China, criticized the manipulations of both party-state officials and employers in two factories.Footnote 71 In contrast, our longer-term observations show several key differences. In our cases, which were less publicized than Hui and Chan's two cases, higher-level authorities withdrew their intervention after 2012, and employers’ influence was either limited or ineffective.Footnote 72 Most union committees were proportionally elected from each department, and the chairs ranged from line workers to mid-level managers.Footnote 73 For workers, a substantial criterion was whether the enterprise unions had taken up their cause in collective bargaining. A good union was evidenced by its bargaining efforts and reasonable deals. In the example of Company B, the tactful union chair was sympathetic towards workers during the strike, but he was already a low-level manager. Despite his position, the workers re-elected him for two full terms until he quit voluntarily. Before that, workers changed the union chairs three times between 2010 and 2012, although a normal term was three years.Footnote 74 This was not uncommon. One way to ensure a balanced representation of different worker groups was to hold elections for temporary labour negotiators each year, primarily among line workers.
Employers also had a stake in making unions representative. Initially intimidated by the speed and ferocity of the strikes, the employers were “forced” to tolerate the unions. Eventually, they came to value the effects of the bargaining process and its worker-based principles as a means to manage labour relations. A lack of communication was regarded by the management as a major cause of the 2010 strikes. The increased “communication” facilitated by the unions was deemed to be highly effective. When disagreements occurred during the bargaining process, the managers reiterated their position: “we hope the union could help us to identify the true expectations of employees, so we could negotiate to improve mutual understanding.” It should also be noted that the wage increases achieved during collective bargaining did not necessarily affect profitability. According to management, “our workforce became very stable, and no one left when a German auto maker [with higher wages and welfare] opened nearby … our revenue increased by 50 per cent from 2010 to 2014, but our profits nearly doubled.”Footnote 75 Clearly, employers accepted the reformed unions and collective bargaining because they also benefited from it. Although the employers certainly did not enjoy relinquishing their hold over the workers, they still preferred a union that was able to communicate with and was trusted by workers.
This model also came about because of the economic and political environment in Guangdong province. As the first region in China to develop a free market and private sector, Guangdong is often regarded as a “laissez-faire local state.”Footnote 76 The split of interests between Chinese labour and capital happened first in Guangdong. Industrial actions have become more frequent and labour activism more vocal as the province has developed economically.Footnote 77 When strikes broke out in 2010, the political atmosphere was relatively pro-labour. The top Party leader treated the strikes as a series of “economic disputes” and, accordingly, some local unions suggested collective bargaining as a way to end the strikes.Footnote 78 Lower-level official unions also intervened in other strikes to facilitate collective bargaining and even provided training to enterprise unions.Footnote 79 In a move called “hybrid representational governance,” the upper-level union, acting as supervisor, helped the weaker enterprise unions bargain with their employers.Footnote 80
This model enjoyed visible political support when it was first used, a progressive but not a rare move in China's traditional quadripartite system. However, it continued to develop without any further political support. Most direct party-state intervention ended in 2011 and there has been only minimal, strike-prevention supervision since then, such as in Company A's case in 2014. There has been no reason offered for this withdrawal. One explanation could be that the higher authorities have achieved their goal of enhancing the capability of the enterprise unions. The political ambiguity of the strike-resolution experience may have also caused the local authorities to pull back. Although the Guangdong Federation of Trade Unions promoted using collective bargaining to resolve strikes, those at the national level worried that it might trigger more strikes.Footnote 81 At the same time, Party organizations inside these enterprises had a negligible role. As is common in the private sector, Company B did not have a Party branch. The Party branch in Company A had very few members, perhaps 1 per cent of the workforce, and it did not share office space with, or have any role in, the union. In a nutshell, the enterprise unions were left alone, which allowed worker–union dynamics to develop organically.
However, the quadripartite system still exhibited structural constraints, which was a main reason why these unions “moderated” worker mobilization to avoid open conflicts. Relative independence from the official system also means a lack of support from outside the enterprises. The split between grassroots and upper-level unions has separated rights from responsibilities, as well as power from action. Although the union chairs in A and B had different backgrounds and personalities, once elected they felt it was their mission not to disappoint workers’ high expectations. At the same time, they were full-time employees of the enterprises, although unpaid union work actually accounted for 50 per cent of their work time and even 80 per cent during bargaining. Formally, enterprise union leaders are units of the ACFTU, but they cannot be promoted to official union positions no matter how well they bargain or how popular they are among workers.Footnote 82 If workplace conflicts intensify, union chairs have no real protection. They either have to quit union duties, or are forced to be a hero.Footnote 83 We found that it was not uncommon for union leaders to leave their companies following a dispute. In the absence of broader institutional changes, direct confrontation usually comes at a high cost for individuals.
Rather than offering support, the state imposes a clear line – no strikes. Local security bureaus and official unions visit the enterprises before collective bargaining every year. In order to avoid overstepping the line, enterprise unions must comply: “As long as I do not do that, you cannot sanction me.”Footnote 84 In practice, the enterprise unions explore every possible avenue open to them; this attention to legal boundaries has shaped their attitudes and work styles and especially their “moderated” use of power. Clearly, this new model of collective bargaining featuring a new union–worker dynamic, as we have observed, will continue in practice, but it is unlikely to go beyond enterprises to resolve the vexing quadripartite dilemma.
Conclusion
Under the current quadripartite system, industrial relations in China are not simple and static but complex and dynamic. Contrary to the expectations of most observers, collective bargaining in the enterprises in Guangdong province has been fundamentally driven by workers. Rather than a “demobilization” process that transfers control to the party-state, enterprise unions have successfully mobilized workers and have strategically exploited the spaces inside their enterprises and within the political structure. Collective bargaining has thus become both the goal and the cause through which enterprise unions have found justification among their members. In this sense, the salient feature of this model is “moderated mobilization.”
There are at least three conclusions that can be drawn from this study. First, this new model is clearly a new variety and is distinct from previous models of collective bargaining, which have been party-state-dominated or informally riot-driven. This model is apparently not a typical Western conflictual model of bottom-up labour struggles; neither has it evolved simply because official authorities continue to dampen labour militancy or because business controls workers. There is a mixture of efforts – initiated by local official unions but developed unexpectedly at the enterprise level. It may produce the sustainable social stability that the party-state seeks, although the latter has not endorsed such practices. As a formal cell within the system, enterprise unions legally involve many workers, and those workers, as shown in these case studies, show great willingness and capability to stay engaged.
As for the bargaining power theory, this study does not focus on the exact types of power but on how the enterprise unions obtain and use the power. To be clear, workers’ structural power in the auto sector and the tradition of labour activism in the region were the fertile soil in which the new model grew. The model is unique because the power of unorganized workers is in the relatively stable form of legal, grassroots trade unions. Instead of the traditional indicator of union membership, this study suggests that workers’ trust and support of a trade union is a more reliable measure of associational power. While it may be common sense in the West, such a measurement is needed now, perhaps for the first time, within Chinese enterprise unions.
Third, this model is distinctive in the framework of the Chinese quadripartite industrial relations system. Although the political and institutional structure remains nearly intact, anomalies are possible. What is more, this model is locally viable. In 2017, the enterprise unions we observed in 2014 were still regularly conducting collective bargaining, usually twice a year. The workers in companies A and B were also continuing to receive higher wages and benefits than those working for competing companies, despite the heavily regulated conditions. This is further proof that the Chinese union system is far from monolithic but has different agencies at multiple layers.
The limitations of the model are also clear. Under structural constraints, these unions have no institutional support beyond enterprises.Footnote 85 Within the enterprises, they still depend on the employers both occupationally and financially. The problem is not so much whether they dare to act against the employers – as in some cases, they do – but it is more about the lack of effective protection for them. Finally, this model has a long way to go to change the quadripartite system. Different agencies at multiple layers within the ACFTU have different goals and often do not embrace new initiatives collectively. This fact is one of the conditions that the new model was able to exploit, but it also impedes any systematic shift. Follow-up studies are needed to examine the social potential of this model, along with its comparison with other local union initiatives.
Acknowledgements
This article is based upon research funded by the Humanities and Social Sciences Foundation of the Ministry of Education in China (No.18YJC840026). The study has also been generously supported by Harvard-Yenching Institute and Tsinghua University. The authors are grateful to Nara Dillon for her insightful and inspiring comments on the previous versions of this article.
Biographical notes
Siqi LUO is assistant professor of political science at the Center for Chinese Public Administration Research and the School of Government at Sun Yat-Sen University in Guangzhou, China. Her wide research interests include labour politics, industrial relations and labour history.
Tao YANG is a postdoctoral fellow at Tsinghua Institute for Advanced Study in Humanities and Social Sciences in Beijing, China. His research focuses on the politics of China's trade unions, industrial development and labour relations, and post-Fordist production.
