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An ILO Working Paper Released on "Restructuring and Social Dialogue in the Chemical Industry in China"
Recently, with the support of International Labor Office (ILO), the project Restructuring and Social Dialogue in The Chemical Industry in China, conducted by the School of Labor and Human Resources, Renmin University of China, is finished and the research report is released as an ILO working paper (WP. 285).
The chemical industry is a key industry for China’s development. In recent years, with the escalation in restructuring in the chemical industry in China, industrial relations in the industry have become increasingly important. Noting the significance of the chemical industry in China, as well as the prominent issues of employment and labor relations in restructuring, Professor ZengXiangquan and his research team are commissioned to carry out a research on restructuring and its implications on employment and industrial relations in the chemical industry in China. This working paper is a collection of research findings focusing on the implications of corporate restructuring for employment and industrial relations, illustrated by case studies.
The working paper indicates that at the industrial level, restructuring does not exert an adverse impact on employment at least, partly because of genuine synergy gains such as expanded production, improved industrial productivity, and increased competitiveness on both the domestic and the international markets. At company level, case studies show that restructuring has led to downsizing in chemical companies.However, the extent of this negative effect has been limited. Factors including the status of overall macroeconomic development, government intervention with supportive social policy, different types of ownership on the two sides (acquirer and acquired), and management decision by the acquirer directly affect the degree of downsizing, which differs depending on the types of employees. In terms of the wage system changes in restructuring, there is no significant impact on wage levels in the medium term, and wage structuresare adjusted in order to inspire employees and, ultimately, to improve business performance.In terms of industrial relations, employees’ morale seems to be indirectly affected by types of restructuring, changes of enterprise ownership and companies’ conciliatory policies. The issues facing workers with regard to their participation in restructuring mainly involve the degree of ordinary workers’ access to key information and the fact that the flow of information seems to be from the top down only. There is disparity in tripartism among government, employers’ associations and trade unions, because the Government of China plays an overwhelming role, while the influence of the other parties is limited. This working paper also finds that underlying labor disputes do exist during the process of restructuring, owing to there being a general situation of capital shortage versus surplus labor in China.

This working paper is now circulated to stimulate discussion and obtain comments. The ILO and the School of Labor and Human Resources hope that the paper will provide an opportunity to consider the contributions of industrial relations and social dialogue to restructuring in the chemical industry in China, and how these might be improved, in the interests of both decent work and greater productivity in the chemical industry.

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