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Labor experts have warned that China's imbalanced industrial relations system is placing laborers at a disadvantage and eroding social justice, posing a threat to both management and the workforce.

The government is attempting to address the issue by creating laws to hold back corporate powers and is being urged to take other steps to safeguard the rights and interests of workers.

"In China, in particular the non-public sectors, management has the absolute upper hand over laborers," said Su Hainan, director of the Labor Salary Institute under the Ministry of Labor and Social Security.

As a result, discrimination in labor markets and defaults on wages are common, workers' salaries are low and slow to rise, employees work overtime without pay, and social security and workplace protection is scant, said Su, who was a member of a panel put together by China Newsweek magazine to discuss the issue at the end of last month.

"To take the salary issue for example, 52 percent of farmers-turned-laborers surveyed by our institute this year were defaulted on their pay," Su said. "In the manufacturing sector, the pay rise has lagged behind GDP growth by about 5 percent between 1998 and 2003."

The east coast and hinterland regions have experienced a labor crunch partly because the pay is not attractive which in turn has hurt employers in the manufacturing sector.

Su said the outlook for current labor-management relations in China is not optimistic because the nation faces a surplus workforce in the low-end market, industries are being restructured, and there is scant legal protection for workers at a time when the country is in transition from a planned to a market economy.

"Our country has been in such a period that if laborers' rights and interests are not protected, the imbalanced labor relations will continue to worsen," Zheng Gongcheng, an industrial relations professor at Renmin University of China, said in a statement.

"By then the confrontation and conflict between management and labour would not only sabotage social stability but also waste good opportunities for national economic development," he said.

Zheng said he supported the use of legislation to help deliver a balance between management and the labor force.

The nation's top legislature has received more than 190,000 comments on the draft labor contract law, which aims to provide workers with umbrella protection while restricting corporate powers such as dismissal.

"Objectively speaking, the law is designed to adjust already imbalanced employer-worker relations," said Xin Chunying, vice-chairwoman of the Legislative Affairs Commission of the Standing Committee of the National People's Congress.

She said the legislature would carefully draw the line between employers and workers and seek more opinions.

"It is a starting point for a series of laws aiming to smooth labor relations," said Guo Jun, deputy director of the Legislative Affairs Bureau with the All-China Federation of Trade Unions.

He said the draft might be passed into law as early as October.

(China Daily May 8, 2006)