Chinese Politics and Policy Updates
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Beijing’s top court has fired a warning shot over excessive working hours at Chinese companies, in the latest salvo by authorities in a sweeping crackdown on regulations against the country’s largest tech groups.
China’s Supreme Court and the Ministry of Human Resources and Social Security jointly issued a series of new “model” cases on Friday that will direct courts over how to handle workers’ rights in labor disputes, while warning companies of abuses.
The strengthening of labor rights came after years of disagreement among technology sector workers over the so-called 996 labor system, in which workers are expected to work from 9 a.m. to 9 p.m. six days a week.
An anti-996 campaign, targeting internet groups Alibaba, JD.com, Pinduoduo, ByteDance and others, has been fueled by complaints of debilitating conditions and deaths attributed to overwork.
The latest regulatory guidelines also came against a backdrop of increasing pressure on Chinese tech companies.
The expanded crackdown, which began in November with the suspension of the planned $37 billion IPO of billionaire Jack Ma’s fintech firm Ant Group, included a record antitrust fine for Ma’s Alibaba, a security investigation into ride-hailing app Didi Chuxing, devastating restrictions. on the private tutoring sector and calls for wealth redistribution.
Ernan Cui, a Chinese consumer analyst at Gavekal Dragonomics, said the pressure on the tech sector was part of longer-term reform priorities under President Xi Jinping, including pursuing “common prosperity” by combating inequality and social divisions.
The crackdown “will not be a one-off campaign that slackens after a few months. Rather, a new regulatory environment is being created, one that will put more constraints on the growth and profitability of Internet businesses and increase state control,” Cui wrote in a research note.
She added: “Regulatory initiatives driven by communal prosperity also appear to increase operating costs as the Department of Labor now imposes higher standards on workers in the gig economy, such as delivery drivers.”
Susan Finder, a leading scholar on the Chinese legal system at Peking University’s School of Transnational Law in Shenzhen, said Friday’s statement also illustrated how the SPC has increasingly issued model cases to guide decisions of lower courts.
China’s legal system is based on statutes rather than precedents. But there is a trend, driven by rapid social and economic change, to use precedents to supplement the law, and for SPC judicial interpretations to improve the consistency of rulings in the thousands of lower courts.
The cases also aim to harmonize the positions of labor arbitration boards and courts on these issues. While model cases are not original court decisions, they have been circulated to warn employers, clarify workers’ rights and standardize labor arbitration and litigation procedures, she said.
“These are model or exemplary cases — not as binding as the ‘lead cases’ — but these will guide the courts and labor arbitration boards in a timely manner,” Finder said.
Additional reporting by Sherry Fei Ju in Beijing
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