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Overview

A work unit or danwei (Chinese: 单位; simplified Chinese: 单位; traditional Chinese: 單位; pinyin: dān wèi) or gongzuo danwei (simplified Chinese: 工作单位; traditional Chinese: 工作單位; pinyiin: gōng zuò dān wèi) is the name for workplaces in the People's Republic of China. The danwei is more than a type of workplace. Rather, it constitutes the most basic unit in the post- 1949 Chinese political and social order. The Chinese Communist Party used the danwei to organize political campaigns and mass mobilizations, implement party policies, and monitor workers and production. In addition, the social functions of the danwei provided lifetime employment and welfare to the urban population. The influence of a work unit on the life of an individual was substantial and permission had to be obtained from the work units before undertaking everyday events such as travel, marriage, or childbirth. The danwei system was crucial to the implementation of the one child policy as the reproductive behavior of workers could be monitored through the danwei system. Workers not complying with policy could have their pay docked, incentives withheld or living conditions downgraded.

Institutions such as factories, infrastructure, construction, schools and hospitals, and government departments are all part of the danwei system. Among them, the heavy industrial work units (such as stell, coal, railways, etc.), commonly viewed as the prototype of the socialist workplace, were granted priority for resources. During the Mao era, the work unit served as multifunctional urban institutions that encompassed various aspects of urban livelihoods. It provided essential social resources to its members when the market economy had not yet fully developed. Each danwei created their own housing, child care, schools, clinics, shops, post offices, etc. Indeed, even after the market reform, the work unit still provide many essential services such as housing and health care. However, the welfare provisions were often not based on equal distribution. Some enterprises and workers in particular industries may receive more benefits, either direct or hidden, than others. The state prioritized the industrial development and economic growth over social welfare and equality. Therefore, the work unit system created inequalities in contemporary Chinese society. The housing crisis of urban China is one of these consequences.

Although the term danwei is mostly associated with the People's Republic of China, it was not invented by the CCP after 1949. Its origins can be traced back to the early revolutionary period when the Communist army and government units, in the face of harsh economic conditions and supply shortages, adopted a free supply system (gongjizhi) in the Communist-controlled based areas. Some large economic units of the base areas were crucial to the development of work units after the Communist party took power. In addition, the banking organizations in the 1930s developed similar community cultures which were later cultivated in the communist enterprises. Some other scholars believe that the development of the work unit system in the People's Republic of China shall be linked to the Communist labor movement in the 1920s-40s. Nevertheless, industrial enterprises in the Republic of China under the Kuomingtang (KMT) already developed labor management strategies based on the Soviet model before the CCP.

With the economic reforms in the 1980s, the danwei system transformed, while still maintaing key functions as needed for political control. The increasing liberalization of China's economy led to state-owned enterprises being put into competition with private enterprise as well as foreign multinational corporations. Studies show that the danwei system actually enlarged existing inequalities in Chinese cities along with the market reform. As the work unit ceased to provide many basic services, people had to look for alternatives from the private markets. The "iron rice bowl", the policy of job security for the industrial workforce, was no longer available to all workers as state-owned enterprises started mass layoffs while private enterprises were able to hire and fire employees without much state intervention. The capital-intensive state enterprises, such as railroad, telecommunications, oil production and refining, mining, etc., employed a declining number of employees after 1978 and it became more difficult for urban youth to find a state sector jobs compared with their counterparts in the 1950s and 1960s. For instance, during the First Five-Year Plan, almost all young people in the urban labor force were assigned state sector jobs, and there were 2 million state sector job assignments after 1966. By contrast, in 1980, only a third of the urban labor force were assigned to state enterprises, and some even received temporary jobs. As a result, the economic reform brought serious unemployment problems to China. .

Origins

The Early Danwei Systems before 1949

The social, economic, and political functions of the danwei could be traced back to the rural revolutionary models of organization in the Yan'an wartime period, the communist labor movement between the 1920s and 1940s, and the pre-communist financial institutions in the 1930s. China's regional enterprises developed modern corporate structures from the late nineteenth century to the early twentieth century. There are many continuities in the financial and managerial structures of these business enterprises.

During the wartime period, the work unit came into the Communist political and economic systems in the form of the free supply system. Under this free supply system, the Communist arms and government units provide essential resources and allowances at no cost. The central authorities were responsible for collection and distribution of supplies to each area based on the principle of "unified supply, revenue-raising, and expenditure." When financial situations deteriorated in late 1930s, the Communist army units and other units such as government agencies, public schools carried out production activities in order to become more self-sufficient. The production movement by army and administrative units was crucial for the survival of the Communist force in the face of the Japanese blockade and resource shortage. The central free supply system and local production activities laid institutional foundation for the development of the danwei system after 1949.

The origin of the danwei can be found in the Communist labor movement in Shanghai from the 1920s to 1940s. There is a clear personal and institutional connection between the pre-1949 labor movement and the development of the danwei system in the 1950s. Former members of the labor movement, including Liu Shaoqi, Chen Yun, and Li Lisan, carried forward the artisan guild tradition into the design of the danwei system and labor and industrial policies in the People's Republic. In 1951, Li Lisan formulated the labor insurance regulations and specified new welfare provisions that were key part of the danwei system.

In addition, prototypes of the work unit can be found in the non-Communist organizations in the early twentieth century. In the 1930s and 1940s, Shanghai's financial institutions, particularly the Bank of China, developed distinct personnel and organizational practices that gave rise to a new middle-class corporate life style. According to the bank's "personnel handbook," employees were required to behave in a certain manner and obey all superior orders. The handbook also emphasized the importance of labor discipline and efficiency.The corporation was seen as a large family. Top leaders at the banks served not only as executive administrators but as paternalistic moral leaders to monitor and guide every employee. The Bank of China had its own western-style residential halls for its managers, regular employees and their family members. Besides housing provision, the Bank built gardens, athletic fields, tennis and basketball courts, elementary and secondary schools, and an auditorium. In this way, the Bank of China resembles the modern workplace by creating a corporate community that fulfilled basic needs of the employees. The financial institutions in Republican-era Shanghai and the work unit of the People’s Republic China are similar in ways that both organizations combined employment with social welfare, housing, health care, security, and political training sessions. The close study of the Bank of China indicates that danwei-style organizations of work and community already took place in urban China before the coming of the CCP.

Chinese regional enterprises already began to develop institutionalization of control using financial and managerial tools in late imperial and Republican period. Among them, Dasheng textile mills was the most prominent firm. It was formed in the early Republican period and continued to exist in the People's Republic as a state-owned enterprise. Zhang Jian, the founder of Dasheng, not only supported local land-reclamation projects, established schools and libraries, and initiated most welfare institutions in Nantong. In this way, Zhang imposed huge socioeconomic impacts on the local population and aimed to build a disciplined society based on his vision of social order and modern efficiency.

1949-1952 Groundwork in the People's Republic

At the Second Plenum of the 7th Central Committee of the Communist Party of China in 1949, Mao Zedong proposed to "shift the focus of work from rural to urban," marking the first step to construct the CCP urban planning system. Mao stressed the importance of the city in the promotion of new productive forces and consolidation of party power. He aimed to transform cities from agricultural consumption centers into centers of industrial production. By the end of 1949, the Central People's Government already nationalized nearly 70% of the industries. In March 1950, the central government begun to reform the Ministry of Finance: it established the Office of Central Institutional Organization Commission and regional institutional organization commission; it controlled the national food supply and distribution. These new institutions significantly increased the state infrastructural power and paved the way for the command economy.

To achieve full employment in the command economy, the Chinese work unit system guaranteed permanent employment. This means that a factory could not easily fire its workers and the workers could not switch to another work unit unless they obtained special permissions from the government labor department. To solve the mass unemployment problems in the early 1950s. The state established uniform standards for employment arrangement and set up employment resource centers in citie. Government intervention in the labor market increased from 1950 to 1952, as the Government Administration Council of the Central People's Government released several regulations on labor disputes and management. For instance, in the Labour Insurance Regulations of the People's Republic of China (1953 Amendment), it clarified the amount of pensions paid to each worker based on the calculation of his or her working years or gonglin (Chinese: 工龄) within the same enterprise. This means that the calculation of a worker's pension status was solely based on his or her working years in the same work unit. The worker would lose the accumulated working years from the previous enterprise if he or she transfers to another enterprise. Therefore, this regulation greatly restricted labor mobility and gradually pushed workers to develop their personal workplace identity. However, this system of working year calculation posed negative impacts on the long-term development of work unit.

Lessons from the Soviet Union

Some scholars found that Chinese state planners borrowed heavily from the Soviet models of development in the design of party and state organs as well as the management of state enterprises. To accelerate the pace of industrialization and to create a new urban working class, the Chinese Communist Party looked up to the Soviet experience and translated thousands of Soviet enterprise management literature. The CCP searched and applied a locally adjusted and idealized version of the Soviet postwar recovery model. It used basic principles of industrial organization and management from the Soviet literature to draft its own industrial management system, and create a new factory hierarchy of administration, with the Communist party control over the enterprise. It also aimed to raise the urban workers' political consciousness through grassroots systematic training and education. In addition, the Soviet model had huge impact on China's newly developed cultural institutions, such as the education system. The entire design and adjustment of schools were based on the needs of industrialization, including the usage of standard lesson plans, textbooks, and classrooms. Private schools and foreign-run religious schools all became state-owned. As schools were integrated into the work unit system, the state could use them to education, transform, and mobilize the future generation.

1953-1957 Experiment and Consolidation

The Party-state gradually developed the danwei system to organize and control urban areas. In July 1955, vice premier Li Fuchun published the "On the Development of the First Five-Year Plan Report." Li's report indicated the significance of the First Five-Year Plan and especially the 156 construction projects aided by the Soviet Union. Among the 156 projects, there were "44 military industry enterprises, including 12 in the aviation industry, 10 in the electronic industry, 16 in the weapons industry, two in the aerospace industry, and four in the shipbuilding industry; 20 metallurgy industry enterprises, of which seven in the steel industry, 13 in the non-ferrous metallurgical industry, and seven in the chemical industry; 24 machinery processing enterprises; 52 energy industry enterprises, of which 25 in the coal and electricity industries and two in the petroleum industry; and three in light industry and parmaceuticals." In the same year, the government administration council approved a new draft to reform capitalist commerce and industry, promote public-private partnership from certain regions to the entire nation In 1956, the state took control over all means of production from the private enterprises, which formally became part of the state work unit system.

Functions

Social, Economic, and Political roles

The CCP believed that the work unit system was crucial for the state to optimize the allocation of resources . First, it helped to established a top-down social regulatory system that efficiently monitored and controlled every aspect of the Chinese society. Second, without supply and demand in the market economy, work unit served as an alternative model of resource allocation. It restored order when there were scarce resources as it effectively collected resources and then distributed them to both work units and individuals in an organized manner. Third, the state could quickly form social institutions to manage the large urban population as members in each work unit. As a political institution, the work unit provided permission to travel, handled residency permits for workers and their family members, intervene with municipal housing authorities, polices, and other agencies on behalf of the worker.

Provision of Commodities and Daily Necessities

The supply function of the work unit is often considered as the most important aspect of the system. According to State Statistical Bureau in 1983, direct state distributions and subsidies covered more than half of the worker's living standards. The provision of basic necessities enforced the non-contractual relations between the work unit and each individual. Compared with the average American family, which spent 45 percent of family income on housing, utilities, transportation, and medical care, the Chinese family only spent 5.2 percent of the family budget because of work unit distributions and subsidies. However, to fulfill their daily food consumption needs, urban residents have to purchase pork and other nongrain products, often under-provided by basic rationing coupons, from higher-priced farmers' markets. Besides the lack of food options, consumer goods were very expensive to an average urban family. For instance, in 1979, a bicycle cost two and one-half to three and one-half a month's wages; a sewing machine cost under three months; a 12-inch black and white television cost about seven months. Due to the high price of most consumer goods, some work units provide work clothes and work shoe to its workers annually. Some provided heating supplement in the winter and offered "cool-drink fees" in the summer. Workers who lived far away from the work unit may receive transportation fees to compensate. More importantly, in the face of financial difficulty, illness, injury, maternity, and retirement, workers could get various welfare supplements from state labor insurance provisions.

Standardized Retail Food Prices in Four Countries (Retail food prices, in averagetime worked per kg. hours: minutes)

	U.S.A	Japan	U.S.S.R.	China
Wheat Flour	0:05	0:16	0:28	1:28
Milled Rice	0:12	0:17	0:58	1:30
Pork	0:54	0:15	2:05	7:55
Chicken	0:15	0:50	3:43	8:45
Eggs	0:16	0:27	2:00	7:30
Vegetable Oil	0:16	0:36	2:10	7:17
Cabbage	0:05	0:06	0:09	0:25
Sugar	0:05	0:11	0:59	5:35

(Source: Klatt W. 1983. "The Staff of Life: Living Standards in China, 1977-1981." China Quarterly 93 (Mar.)

From this table, we can see a huge disparity between the food prices between China and USSR, USA and Japan)

Provision of housing

Workers may develop a better sense of belonging to their work unit if it has high level of provision capability, which could ensure job satisfaction and quality of life for workers and their family members. In this way, the work unit replaced the role of commodity markets in fulfilling basic needs of workers. Certain work unit positions seem more attractive to workers due to their housing and welfare provisions. Before the market reform, people did not have direct access to housing as there was no private market for housing. Large work units could force the municipal housing bureaus to procure housing for their workers. Workers' rents were heavily subsidized by the work unit. Workers that lived outside of the factory housing can get grants from the work unit. Therefore, the work unit played a crucial role in supplying housing to its workers. Even after the economic reform, the work unit still acted as mediator between buyers and the housing market. A case study on Kunming Cigarette Factory reveals that the factory encountered serious resource management challenges as the work unit had to keep building new houses for new workers and pay the maintenance fees for previous workers' offsprings, who inherited their parent's assigned housing. In this way, the Kunming Cigarette Factory fell into a vicious cycle of resource shortage.

Provision of other Essential Services

In addition to housing, the work units provided a wide range of essential services, including daycare and kindergarten services, showers and toilet facilities, haircuts, clothing repair, and even movie screening. These services were often provided at very low cost or for free. With the market reform in the 1980s, the private services sector began to revive and provided an increasing amount of urban services at higher market prices.

The Hierarchy of Distribution

Not every work unit or worker benefited equally from the system of distribution. State sector work unit typically had better access to scarce industrial goods such as sewing machines, watches, radios, bicycles, and furniture. Large enterprises in strategic industries received more state funding to spend on housing, medical facilities, dining halls, and other amenities than smaller and less important enterprises. In addition, state enterprises run by national ministries, provinces, and by the major cities usually offered better provisions than those run by small and remote cities. Officials may obtain more share from the commodity distribution than ordinary workers.

Impacts of the Economic Reforms

The party-state gradually retreated from its dominant role in the work unit after the economic reform. Many enterprises went bankrupt as they were unable to compete in the market economy. Even though some work units still received heavy state support, they had to reform the internal organizational structures and adjust their operation according to market conditions. There was no longer state guarantee for permanent employment, or the Iron Rice Bowl jobs. Workers had to find jobs through the competitive labor market and their labor also became increasingly commodified. The exploitation of labor in the fast-growing manufacturing sector poses serious concerns for current labor conditions in China. The significant amount of migrant workers contribute to the coastal economy with their cheap labor, but they often suffer from unsafe working conditions, excessive working hours, and state denial of social security rights.

See also

• Dangan
• Hukou system
• People's commune
• Production brigade
• Production team (China)
• Shequ
• Ten Major Relationships
• Iron Rice Bowl

References

This article incorporates text from this source, which is in the public domain. Country Studies. Federal Research Division. [1]

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