Enterprise Reform and Employment Change in Shaanxi Province

Andrew Watson

No 1998-03, Chinese Economies Research Centre (CERC) Working Papers from University of Adelaide, Chinese Economies Research Centre

Abstract: This article focuses on the impact of state enterprise reform on employment in Shaanxi province. Two issues are seen as of major importance. The reform of property rights and the reorganisation of state enterprise assets are changing the relationship between labour and capital in ways which are making it easier for enterprises to shed labour. The blurring of the barriers between urban and rural labour is creating more direct competition between the two which is forcing urban labour to accept lower standards of benefits and payments. State enterprise reform in Shaanxi is also constrained by the relatively low level of development and the slowness of change in the structure of the local economy. As a result, Shaanxi is experiencing a huge surge in unemployment. It is argued that the fact that the burdens of state enterprise reform are borne at the local level means that there are large disparities in the capacity of different regions to make the adjustment and to provide support for those who become unemployed.

Pages: 29 pages
Date: 1998
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