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The Informalisation of Work in China

Tim Pringle

The reader will forgive our opting for brevity over clarity in the title for this short paper. It suggests that the informalisation of work is a finished project and moreover that it has already run its course uniformly all over China. Such a scenario would entail a complete defeat of the Chinese working class at the hands of international capital and national authoritarianism – a combination that might be practically termed ‘authoritarian capitalism’.

Thankfully, this is not the case! In its current form China presents itself as a pro-capital one-party authoritarian state allowing only limited space for civil society and no independent trade union activity. At the same time, labour relations and working practices in China cannot accurately be reduced to the unvarying monotony of the sweatshop. To do so is to effectively ignore the efforts being made by workers to defend formal institutionalised labour practices based on accumulated ‘privileges’ won by a significant minority of urban workers during the pre-reform decades; and secondly, fails to adequately acknowledge the significance of private sector workers’ struggles attempting to do nothing more than secure a pay packet or a day off in what are often informal or very poor working environments. Labour is certainly on the ropes, maybe even on our knees in some places – but we are not on the canvas. 

In this paper we will examine the ongoing process of informalisation of work in China, by no means uniform or comprehensive. We will attempt a broad and brief historical look at the past and present roles of capital and state in creating the existing labour market in which flexible working and the informal labour market are deemed by the government to be both desirable and unavoidable. Although not explicitly referred to, our basic premise is that class struggle and the balance of class forces are the axis on which the formal/informal employment pendulum swings.

The theme of the next issue of ALU (summer 2006) will be devoted to ‘China’. We will use the opportunity to look in detail at the impact of mass redundancies on the Chinese working class, as well as workers’ efforts to defend class interests by defending or promoting formalized labour practices. The follow-up paper will also examine labour relations in the private sector and the view presented by AMRC partners in the Asian Transnational Corporations Monitoring Network who have argued that the relationship between foreign direct investment and labour in China has presented the opportunity for a “new working class activism”. The reality of the private sector dictates that this second paper will not drift far from the question of informalisation and its role, divisive or otherwise, in redefining–or perhaps merely clarifying–class politics in China.

Some working definitions

We start with a context: what is meant by the formal sector and what is meant by informal sector? In 1993, the fifteenth Conference of Labour Statisticians conceived the informal sector as consisting of production units that “typically operate at a low level of organisation, with little or no division between labour and capital…and on a small scale…labour relations – where they exist – are based mostly on casual employment, kinship or personal and social relations rather than contractual arrangements with formal guarantees”.

No doubt this is useful for the statisticians. But the formula offers little help to trade unions and labour organisations seeking to organise workers in the informal sector that by default has a high degree of non union employees mostly working in small-scale enterprises. It is instructive to look at the other end of the process. From a workers’ standpoint, jobs in the formal sector of the economy are usually characterised by relative security, social protection, a safe working environment, a defined set of rights at work – such as the right to strike or seek redress – independent representation usually via a trade union with access to collective bargaining, and a remuneration package that enables a life with dignity.  Relevant organisations such as the International Labour Organisation (ILO) and the International Confederation of Free Trade Unions (ICFTU) and observers agree that conditions of employment that are in deficit to these benchmarks belong to the informal sector (see box 1). However, following years of attacks on organised labour by governments and employers, these formal benchmarks exclude many millions of jobs in, for example, the US and the UK where the attacks on working conditions have been particularly well-planned and systematically executed. Moreover, they immediately disqualify all jobs in China where organising is legally restricted to the All China Federation of Trade Unions (ACFTU). In short, there is no adequate expression of freedom of association and the ACFTU itself is constitutionally bound to accept the leadership and policies of the ruling Communist Party of China (CPC).

Tempting as it is to stop writing here, it would hardly be useful! Despite being a transitional country, China is at the centre of capitalist globalisation and with it the process of informalisation of work. While not wishing to underestimate the importance of definitions, what we are looking at here is not so much what is and what isn’t formal/informal work, but rather the tension between the concepts.

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