Redundancies in Chinese State Enterprises: A Research Report Redundancies in Chinese State Enterprises JACKIE SHEEHAN, JONATHAN MORRIS, and JOHN HASSARD* This article examines how the problem of surplus labor is being dealt with in some of China’s state-owned enterprises. Primarily using interview data from the period 1995–1997, as well as published sources, the article looks at the main methods employed by large state-owned enterprises to reduce the level of surplus labor in their workforce. It also considers how smaller state-owned enterprises are coping in an era where mergers, closures, and bankruptcies are becoming much more common as a means of dealing with loss-making firms, resulting in widespread redundancies in the state-owned enterprise workforce. The article illustrates that the potential political repercussions of job losses, as well as direct intervention by local authorities, continue to hinder the freedom of enterprise management to adjust employment levels in the interests of efficiency and productivity. The article also notes the importance of how decisions about downsizing and redundancy are communicated and justified to employees if resistance and social instability are to be minimized. The employment treatment of production workers will be considered separately from that of cadres, since these two groups are subject to different employment regulations and political constraints. Introduction The economic reform process in China, with all its organizational implications, is multifaceted. Included is state-sponsored marketization, 486 *The authors’ affiliations are, respectively, the Department of History at Nottingham University, the Cardiff Business School at Cardiff University, and the Manchester School, UMIST. This research was funded by the Economic and Social Research Council (L32425 3018). We are extremely grateful to Profes- sor Chen Zhicheng of the University of Science and Technology, Beijing, for his immense help and Mr. Xiao Yuxin of Keele University for advice, company, and translation. INDUSTRIAL RELATIONS, Vol. 39, No. 3 (July 2000). © 2000 Regents of the University of California Published by Blackwell Publishers, 350 Main Street, Malden, MA 02148, USA, and 108 Cowley Road, Oxford, OX4 1JF, UK.