Downsizing the danwei: Chinese state-enterprise reform and the surplus labour question

Abstract

The Chinese economic reform process has engendered significant changes in the structure and management of work organizations. Central to the process has been the ‘corporatization’ of the danwei, or state-owned enterprises (SOEs). This paper examines the progress made in the current round of state-enterprise corporate reform – based on the Modern Enterprise and Group Company systems – and extends this to discuss the major social consequences of such large-scale enterprise restructuring. Drawing on interview data from eight large SOEs in the steel industry, we assess the extent to which the aims of reducing government interference in the running of SOEs, developing a sense of enterprise, and achieving cost reductions and productivity improvements through large-scale workforce reductions can be achieved in the present reform-induced climate of labour unrest and incipient political instability.