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New Interpretations on the Development of China’s Non-Governmental Enterprises pp 185–208Cite as

The Labor-Capital Relationship: A Source of Strength for NGEs’ Growth and Development in the New Economic Stage

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Abstract

Since China’s reform and opening up and with the development of China’s economy under different types of ownership, domination of state ownership has been broken while the market-oriented “non-public sectors of economy” has grown significantly. By June 2009, there were 6.9 million NGEs nationwide, accounting for 70% of all enterprises in China; and they provide over 85% of urban jobs and more than 90% of rural employment , and NGEs had absorbed and accepted 75% of China’s working population. It can be said that the private sectors of the economy are already playing the dominant role in China’s economy overall. But during the rapid development of the private sectors of the economy, labor-capital conflicts and contradictions have been accumulated and have worsened, of which the “Foxconn Incident” is a typical example. As economic interest is the most basic unit of the labor-capital relations, it is crucial to determine a reasonable proportion of income distribution between labor and capital among NGEs. The report of the 17th National Congress of the CPC proposed to “gradually increase the proportion of residents’ income in national income distribution and raise the proportion of labor remuneration in the primary distribution.” Chinese State Councilor Ma Kai pointed out that, currently, the proportion of resident income represents too small a share in the national income, and so is labor remuneration in the primary distribution. He proposed structure adjustment to of the distribution of national income and, while retaining the continued growth of the enterprises and their normal income, that efforts be made to raise the proportion of labor remuneration and keep income inquality in check so as to ensure that the income growth of both urban and rural residents is no lower than the rate of economic growth, and that labor payment is not lower, but perhaps even slightly higher, than the growth rate of China’s economy and corporate income. Therefore, this chapter will study the construction of a reasonable income distribution system for the harmonious development of the labor-capital relations in NGEs—“an important part of the national economy”—in the new stage.

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Notes

  1. 1.

    Gu Jianfen. (2009). Perform Our Duty; Organize and Guide NGEs to Attract More Employment. http://www.zgjy.org/kwzl/kwzlshow.asp?messageID=259. Accessed 15 June 2010.

  2. 2.

    Cheng Lu. (2006, Feb. 9). China’s NGEs from 2001 to 2005. China Business Times.

  3. 3.

    Report on the 17th CPC National Congress. http://www.xinhuanet.com/17da/index.htm. Accessed 23 July 2010.

  4. 4.

    Ma Kai. (2009). Quicken the Adjustment of Economic Structure When Coping with the International Financial Crisis. Qiushi, (20), 9–13.

  5. 5.

    Zhu Weijun. (2001). Labor Relations. Beijing: China Labor and Social Security Publishing House, p. 5.

  6. 6.

    Ibid.

  7. 7.

    Cheng Yanyuan. (2002). Labor Relations. Beijing: China Renmin University Press, p. 3.

  8. 8.

    Feng Xiaotian. (2000). Labor-Capital Relations in Private Enterprises. Wuhan: Huazhong University of Science and Technology Press, p. 63.

  9. 9.

    Chang Kai. (2004). On Labor Rights. Beijing: China Labor and Social Security Publishing House, p. 69.

  10. 10.

    Zhao Xiaoshi. (2009). Two-Way Moral Risks in Labor Relationship. Financial Science, (4), 65–72.

  11. 11.

    Mayo, George Elton. (1964). The Social Problems of an Industrial Civilization. Beijing: The Commercial Press.

  12. 12.

    Marx, Karl., & Engels, Frederick.(1975). The Complete Works of Marx and Engels. Beijing: People’s Press, Vol. 23.

  13. 13.

    Zhao Xiaoshi. (2009). Two-Way Moral Risks in Labor Relationship. Financial Science, (4), 65–72.

  14. 14.

    Cappelli, P. & Neumark, D. (2001). Do High Performance Work Practices Improve Establishment-Level Outcomes? Industrial and Labor Relations Review, 54(4), 737–775.

  15. 15.

    Barnard, C. I. (2007). The Functions of the Executive (Tr. Wang Yonggui). Beijing: China Machine Press.

  16. 16.

    Bai Chong’en & Qian Zhenjie. (2009). Factor Allocation in National Income: a Story Beyond Statistics. Economic Research, (3), 27–41.

  17. 17.

    Zhuo Yongliang. (2007). On Decrease of Labor-Income Proportion and Increase of Capital-Income Proportion. Zhejiang Social Sciences, (3), 26–33.

  18. 18.

    Xiao Zhuoji. Change the Exceedingly Unbalanced Situation and Coordinate Economic and Social Development. Address on the 10th Meeting of the 10th Session of the Standing Committee of CPPCC National Committee. http://cppcc.people.com.cn/GB/34961/50294/50298/3528737.html. Accessed August 11, 2010.

  19. 19.

    (Mar. 26, 2009). Comprehensive Report on Data Analysis of the 8th Sampling Survey of China’s NGEs. (summary). China Business Times.

  20. 20.

    Gollin, D. (2002). Getting Income Shares Right. Journal of Political Economy, 110(2), 458–475.

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Authors and Affiliations

  1. Graduate School, Chinese Academy of Social Sciences, Beijing, China

    Haoqing Xu & Lei Zhao

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  1. Haoqing Xu
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  2. Lei Zhao
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  1. Center for Private Economic Studies, Chinese Academy of Social Sciences, Beijing, China

    Yingqiu Liu

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Xu, H., Zhao, L. (2017). The Labor-Capital Relationship: A Source of Strength for NGEs’ Growth and Development in the New Economic Stage. In: Liu, Y. (eds) New Interpretations on the Development of China’s Non-Governmental Enterprises . Research Series on the Chinese Dream and China’s Development Path. Springer, Singapore. https://doi.org/10.1007/978-981-10-3872-3_7

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