Contracts in China

Overview by

The Active Population in Figures

Main Indicators 2004 2003 2002
Labor Force 752,000,000 744,320,000 727,400,000
Labor Force (Annual Growth, %) - - -
Rate of Activity (%) 58.9 - -
Unemployment Rate (%) 4.4 5.0 5.2

Source: China statistics,

Employed Persons, by Occupation (% of Total Labor Force) 2004
Agriculture, Forestry, fishing 6.6%
Extraction and Exploitation 0.1%
Manufacture 27.3%
Electricite, gas, water 0.4%
Construction 7.5%
Wholesale and retail trade 17.6%
Transport, stockage, communications 5.0%
Finance, Insurance 3.9%
Education 5.4%
Hotels and restaurants 6.2%
Public administration 3.8%
Other 16.2%

Source: Labor Force and Employment,

For Further Statistics
China statistics
National bureau of statistics of China
For Further Information About the Labor Market
ILO, International Labor Organization

Management of Human Resources



Method of Recruitment
Recruitment is done more and more through Internet. But announcements in the newspapers are the most used means for the job offers. Numerous trade fairs are also organised and are a good means to recruit. Recruitment campaigns in the universities are also organised. The most prevalent method of recruitment is the interview. Certain companies must also pass technical or English tests. The psychological tests are not used in China, however role playing, simulations or group interviews are becoming more and more common.
Recruitment Agencies
Many recruitment agencies are found in China. Hudson, Wang-li, Michael Page.
Recruitment Websites

The Contract

Type of Contract
Legal provisions govern the work contracts, the collective agreements and the individual negotiation supplement them.
Employment contract and recruiting conditions formalities are strict, which is not so for dismissal constraints which are rather flexible.
There are 3 types of contracts: the permanent contract, the fixed term contract and the contract for the project.
Breach of Contracts
  • Retirement
At the age envisaged, not before.

Necessity for all the projects to submit a business plan subject to approval by the competent authorities.

  • Dismissals
An employee can be dismissed if he has demonstrated during his trial period that he was not qualified for the post, when he violates the company rules, when he causes great loss to the company because of professional misconduct. A dismissal is also accepted when the employee after a long illness cannot resume his job again or another job in the company, if the employee is inefficient even after training, or if no arrangement is possible between the parties on a change of contract.
  • Other Possible Methods
Labor Laws
Employment law

Dispute Settlement


Conciliation Process

Cases of Dispute
Conflicts between employe and employee on the non respect of the labour law.
  • Legal Framework
In the event of dispute between the employer and employee, the parties can have recourse to a mediation or an arbitration, present the case before the Court or come to a mutual arrangement. During a mediation or an arbitration if one of the partiess has an objection to the resolution, it can proceed to the Court for a lawsuit.
  • Procedure
Employment law

Judicial Structures

  • Legal Framework
Employment Law
  • Competent Legal Body
People's court

Social Partners

Social Dialogue and Involvement of Social Partners
The Chinese Communist party recognises only one trade union: "the All China Federation of Trade Unions" (ACFTU). The ACFTU is not an independent trade union, it thus cannot be the voice of the workers.
All China Federation of Trade Unions (ACFTU)
Regulation Bodies
Ministry of Employment

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