Focus topics


China’s labor law relies on individual initiative

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  • In light of an aging demographic, China is striving for a shift in its industrialization strategy. A key goal of China’s new strategy is an increase in labor market stability. A first step was legislation. The next step is enforcement.
  • Following intense debate and controversy, the Labor Contract Law, and the Labor Arbitration and Mediation Law were passed, and the Labor Law was amended in 2008.​
  • After the 2008 legislation, labor dispute numbers soared immediately and continued to grow in the following.​
  • Legally, China now has very high labor right standards, even higher than those of many developed countries (OECD Employment Protection Index: in 2012 China had a score of 3,26; Germany 2,6. China has not been rated since.)​
  • Enforcement however is, thus far, highly dependent on workers taking action themselves and filing for mediation or arbitration, as opposed to the government more actively controlling employment practices.​
  • To increase enforcement, the Chinese government has now launched legal dissemination campaigns that educate workers on their rights.​
  • Even though individual case numbers are increasing, collective cases have decreased since 2008, illustrating political disapproval of widespread collective action.​
  • Critics of China’s labor law system point out that legal enforcement in a highly individualized and politically constrained system will give preference to well-educated and wealthy workers.​
  • Currently, barriers to legal aid for migrant workers are relatively high, further intensifying the trend of disadvantaging less educated worker groups.​

Sinolytics is a European research-based consultancy entirely focused on China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.

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