a reformed legal framework and economic pressure added new dimensions to
HRM, though the changes are not rapid enough for policy makers, especially
in Japan. However, the evidence shows that traditional culture still has a pro-
found influence on HRM policies and practices, despite political, economic and
historical factors.
4 SOCIALIST MARKET ECONOMIES: CHINA AND VIETNAM
China and Vietnam represent a different political and economic system that is
still nominally influential both ideologically and politically. Both of them have
a similar traditional culture, predominantly Confucianism, and in recent years,
they have transformed from a centrally planed socialist system to a more
market oriented economy, but still with so-called ‘socialist characteristics’.
Economic reforms and an open door policy have led to significant changes in
these socialist market economies. The emergence of new interest groups, the
inflow of foreign capital and the diversity of ownership of enterprises, and a
large and floating population moving from the countryside to the cities, have
accentuated conflicts of interest and require a more relevant employment rela-
tions policy at a macro level and HRM strategies at a micro level to cope with
these challenges.
ChinaChina is the birthplace of the ancient philosophies that influenced the East
Asian region. In China, Confucianism handed down the idea of correct behav-
iour and rules of conduct, and Daoism provided the knowledge of rituals and
laws of nature. In some form or another, these were preserved through the ages
right to the time of late Qing Dynasty, around the time that the industrial rev-
olution was happening in the West. Under the challenges of Western coloni-
sation, China was seen as backward and needing to be reformed and rejuvenated
(McGreal, 1995: 134). At this time Chinese scholars and philosophers were in
a transitional age making efforts to synthesise Western and Chinese philoso-
phies (Whiteley et al., 2000: 36). However, China did not experience business
in the Western sense during and after the period of the industrial revolution.
In the twentieth century, the Japanese invasion and civil war led to political
and military conflicts and communist ideology eventually prevailed. The
People’s Republic of China (PRC) was established in 1949 under the leadership
of the Chinese Communist Party (CCP), and this event was called ‘Liberation’.
After the Liberation in 1949, China laid the foundations of its industrial
and labour relations system, particularly during the 1950s, but there was great
208 International Human Resource Management