In late September, after a month of intense lobbying, business leaders from Hong Kong succeeded in postponing legislation in Guangdong that would have given workers the chance to initiate and participate in collective bargaining with management. The bosses, who have dominated labour relations in China for the last three decades, clearly saw Guangdong's draft Regulations on the Democratic Management of Enterprises [2] as a threat to their interests and were not prepared to let them pass without a fight.

A new research report [3], published today by China Labour Bulletin, examines precisely how, why and when, during the process of economic reform, the Chinese government ceded so much power to management - to the point now where employers can routinely ignore or even sabotage government legislation designed to protect workers' interests. It shows how employers have been able to unilaterally determine employees' pay and working conditions, with workers left out in the cold, marginalized and powerless.

The report looks back at the changing dynamics of labour relations in China during the reform era, discusses the government's strategies for managing labour conflicts, and analyzes in detail the effectiveness or ineffectiveness of the two most important labour laws implemented thus far; the 1994 Labour Law and the 2008 Labour Contract Law.

It concludes that Guangdong's draft regulations are a belated attempt by a provincial government to restore some of the power lost by labour, although not because the government has suddenly become pro-labour but rather because such moves are now more in line with its overall objectives of sustainable economic development and social stability.

The province has been rocked this year by strikes, protests and worker suicides, and the government is increasingly anxious to forestall further social unrest by establishing a mechanism that can help resolve labour conflicts peacefully within enterprises, without the need for costly government intervention.

For such a system to work however, CLB argues, the government needs to recognize the reality of labour relations in China today. The interests of labour and management are now clearly in opposition to each other, and as such conflicts are inevitable. And the best way to resolve theses conflicts, CLB says, is through collective bargaining. Moreover, it is the responsibility of the government to ensure that both labour and management have the right and the ability to undertake such bargaining.

If the new Guangdong regulations are passed into law, they could indeed open the door to worker participation in collective bargaining. But if that door is closed or blocked by management, government or the official trade union, workers will quickly become disillusioned and almost certainly revert to the now tried and tested pattern of wildcat strikes and demonstrations in a bid to get what they want. And the government, employers and workers will all be back to square one yet again.

Swimming against the Tide: A short history of labour conflict in China and the government's attempts to control it [3]is published today and is available on the CLB website.