PARADOXES OF LABOUR REFORM Chinese Worlds Chinese Worlds publishes high-quality scholarship, research monographs, and source collections on Chinese history and society from 1900 in the 21st century. 'Worlds' signals the ethnic, cultural, and political multiformity and regional diversity of China, the cycles of unity and division through which China's modern history has passed, and recent research trends toward regional studies and local issues. It also signals that Chineseness is not contained within terri­ torial borders - some migrant communities overseas are also 'Chinese Worlds'. Other ethnic Chinese communities throughout the world have evolved new identities that transcend Chineseness in its established senses. They too are covered by this series. The editors see them as part of a political, economic, social, and cultural continuum that spans the Chinese mainland, Taiwan, Hong Kong, Macau, South-East Asia, and the world. The focus of Chinese Worlds is on modern politics and society and his­ tory. It includes both history in its broader sweep and specialist mono­ graphs on Chinese politics, anthropology, political economy, sociology, education, and the social-science aspects of culture and religions. The Literary Field of New Fourth Army Twentieth-Century China Communist Resistance along the Edited by Michel Hockx Yangtze and the Huai, 1938-1941 Chinese Business in Malaysia Gregor Benton Accumulation, Ascendance, A Road is Made Accommodation Communism in Shanghai Edmund Terence Gomez 1920-1927 Internal and International Steve Smith Migration The Bolsheviks and the Chinese Chinese Perspectives Revolution 1919-1927 Edited by Frank N. Pieke and Alexander Pantsov Hein Mallee Paradoxes of Labour Reform Village Inc. Chinese Labour Theory and Chinese Rural Society in the 1990s Practice from Socialism to Market Edited by Flemming Christiansen Luigi Tomba and Zhang junzuo Chinas Unlimited Chen Duxiu's Last Articles and Gregory Lee Letters, 1937-1942 Birth Control in China 1949-2000 Edited and translated by Thomas Scharping Gregor Benton Confucian Capitalism Encyclopedia of the Chinese Yao Souchou Overseas Edited by Lynn Pan PARADOXES OF LABOUR REFORM Chinese Labour Theory and Practice from Socialism to Market Luigi Tomba UNIVERSITY OF HAWAI'I PRESS HONOLULU Editorial Matter © 2002 Luigi Tomba Published in North America by University of Hawai'i Press 2840 Kolowalu Street Honolulu, Hawai'i 96822 First published in the United Kingdom by RoutiedgeCurzon 11 New Fetter Lane London EC4P 4EE England Printed in Great Britain Library of Congress Cataloguing in Publication Data A catalogue record for this book has been requested ISBN 0-8248-2658-2 CONTENTS Acknowledgements Vll 1 Labour Theory and Practice and the Making of a Market: An Introduction 1 1.1 The Issue 1 1.2 Chinese Labour and the Making of a Market: An Overview and Some Basic Assumptions 9 1.3 Labour Theory regarding the Market: Some Preliminary Notes and a Breakdown into Periods 21 1.4 Precis of the Research 35 2 Distribution According to What? From Politics to Labour 37 2.1 Ownership and Distribution: The Limits of the Chinese Debate 37 2.2 'Distribution According to Labour' (DATL): Rehabilitation of a Socialist Principle 43 2.3 The 1977 Conferences: The Rehabilitation of Dismantled Ideologies 47 2.4 The 1978 Fourth Conference on DATL: Writing the Line for the Plenum 51 2.5 Towards an Enlargement of the Labour Debate 56 3 Back to the Future: The Initial Paths of Labour Reform (1977-1983) 63 3.1 Productivity Boost and Social Discontent: The Contradictory Roots of Labour Reform 63 3.2 Distribution and Wages: The First Focus of Labour Reform 68 3.3 A New Contradiction: Employment and Efficiency 70 3.4 Enterprises: Reforming the Danwei System 78 v CONTENTS 4 What is Labour? Towards the Marketisation of Labour Relations (1984-1991) 86 4.1 From Distribution to Employment: Labour Relations and Social Constraints 86 4.2 A Changing Policy Strategy: Labour Relations Discussed 89 4.3 Labour Contracts and the Nature of Labour Relations 103 5 The Contractualisation of Labour Relations 108 5.1 A 'Structural' Economic Reform 108 5.2 The Labour Contract 110 5.3 Contracts and Labour Mobility: Moving the Dual Market to the Cities 115 5.4 From Work-Unit to Employer 119 6 Beyond Socialist Labour: The Labour Market Debate in the 1990s 125 6.1 Labour Market: An Open Issue 125 6.2 The Mechanism of Labour Allocation 127 6.3 The Reshaping of Labour Relations 137 6.4 Conclusion 145 7 Epilogue: Labour Market and the State: Informalisation or Institutionalisation? 147 7.1 Informalisation and the Labour Market 147 7.2 The Labour Market and the Floating Population 152 7.3 Working for a Boss: The Case of the Construction Industry 155 7.4 Ethnic Economies: The Case of Ethnic Villages in Beijing 159 7.5 The 'Mechanism' of Formal Labour Markets 165 7.6 Mobility and Immobility in the Labour Market 169 7.7 A Highly Institutionalised Labour Market 182 7.8 Conclusion 186 Notes 192 Bibliography 221 Index 239 VI ACKNOWLEDGEMENTS This book would not have been possible without the decisive help of many people and of several institutions. The 'Scuola Superiore di Studi Storici di San Marino' (Higher School of Historical Studies of San Marino) accepted my project and funded my studies in the years between 1993 and 1997, when the research work for this book was undertaken. G.G. Feltrinelli Foundation in Milan also offered some financial support to my research. My gratitude goes to Tony Saich who accepted to act as my supervisor during the PhD that was the origin of this book and offered meaningful comments during the revision of my thesis for publication. Also, without his practical help (and the hospitality of his wife, Zeng Yinyin) my field visit in Beijing would have been impossible at a time when my 'budget constraints' were particu­ larly difficult. Some Chinese colleagues were both sources for my research and insightful advisors: Feng Lanrui, who had a great deal of stories to tell and a lot of experiences to share, Dai Yuanchen, Guo Shuqing, Zhao Shukai, Xiang Biao, Zhu Jianfang, Yuan Yue. I am also indebted to Steve McGurk for sharing with me his contacts in Beijing. Thanks are due to Flemming Christiansen, Anita Chan, Enrica Collotti Pischel and Guido Samarani who offered suggestions on earlier drafts of this study and were always ready to share Vll ACKNOWLEDGEMENTS information on their own research, and to two anonymous readers whose suggestions contributed to this final version. I am grateful to Nancy Hearst who agreed to spend her time and expertise to refine my English and my quotations. Mine, of course, remains the responsibility for all mistakes and inaccuracies in the text. I had the privilege to share this experience with many friends who have been valuable sources of encouragement. They will probably be relieved to know that this book goes to press. The heaviest burden was on Silvia's shoulders: thanks. Finally, this work is dedicated to my parents. Vlll 1 LABOUR THEORY AND PRACTICE AND THE MAKING OF A MARKET An Introduction 1.1 The Issue What is labour? To what extent did the continuous yet contra­ dictory evolution of theoretical understanding in this field affect the process of reform of existing socialism in China from the late 1970s to the early 1990s? Why is the theory of labour so intimately intertwined with the Chinese socialist policymaking process, and why did the ability of public policy to intervene as a regulatory tool in the reality of the labour economy diminish with the passing of time and with the emergence of new, different, and contending interpretations of the labour issue? To what extent is the evolution from a full-employment policy and full state-led allocation to labour market theory and practice the result of conscious policy options rather than merely of the 'retreat' of public intervention and the growing importance of 'market forces'? What does the word 'labour' mean at the end of this process and what purpose does this meaning serve? Questions arise at the beginning of every research study. The questions I have listed above emerge from my difficulties in tackling separately the two streams of economic reform, that is, the political/theoretical debates resulting from political struggles and elite politics on the one hand, and the transformation of economic and social life in Chinese urban centres on the other. 1 LABOUR THEORY AND PRACTICE The histories of theory and practice are generally kept separate, as they usually stem from different backgrounds and social circles, opposing or contradictory forces. This is impossible in the context of Chinese socialism. In the case of China, the claim to coordinate theory and praxis, thought and action, has been a challenge in the field of policy ever since the basic assumptions of all-embracing theories proved insufficient to address the social changes after the beginning of reform in 1978. The theoretical debate under social­ ism is an integral component of policymaking and, in most cases, players in the theoretical arena are involved directly in policy elaboration. It is hardly conceivable that any public theory on labour is not the formal result of political efforts. The 'theory' I will deal with in this study is therefore a prag­ matic (sometimes, however, only in its premises and not in its final outcom.e), policy-oriented concept, the ground for evaluation of which is - rather than its coherence with ideological frameworks ­ its ability to lead towards the formation of guiding principles of policymaking and to synthesise different positions into political or economic guidelines. The 'practice' to be investigated, in contrast, is the outcome of policy action, a result both of the implementa­ tion of planned guidelines and of general (economic, social, and political) constraints.