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Published on Dec 11, 2012 in China

Part I: Bridging the gender gap in China – Women come out of the shadows and prosper in present-day China

vectorstock_1025040_webIt’s not uncommon in China to have women serve as CEOs, CFOs, or occupy any management position within a Chinese company. When we work with companies to help them adopt more sophisticated accounting and corporate governance procedures, for example, we very often work with women who occupy senior management positions. In fact, Thornhill’s General Manager in China, Zhang Jingjie, is a woman who’s worked with us for nearly ten years, and is extremely efficient at running our staff of forensic accountants in both Beijing and Shanghai. However, this acceptance in both business and society, for Chinese women, has only emerged in the last 60 years.

For much of its history, China has been a male dominated society which adopted the teachings of Confucius (551–479 BCE). However, while Confucius taught that a hierarchical society would bring about harmony, he also held to the concept of the time that women were not equal to men and that their place was below that of a man in the societal hierarchy. For almost 2,500 years women were, with few exceptions, a non-event in Chinese society, politics, and business.

Adding to the joyful experience of women during the Confucian era, women were excluded from educational institutions, largely excluded from socializing in public, and expected to have only one male partner during their life. If, for example, her husband died, a woman would, for the most part, be expected to not re-marry or enter into sexual relations with another.

The only benefit the wife, and sometimes the wife’s family, received was financial security. Women at the time were economically dependent on their family or their husband. With no independent source of income, education, or social status, women were forced to follow the dictates of their fathers, if they were not married; their husbands, if they were married; or their sons if they were widowed. In rare instances, women became the power behind the throne. But, for the most part, the only way they were likely to somewhat increase their position within the family was to produce a male heir. The birth of a male assumed such importance that, if a man’s first wife failed to produce a son, the man was likely to purchase a concubine to produce him a male heir. Continuing the family name, and one’s lineage, was all important. Moreover, the main focus of marriage during much of China’s history was not a union based on love, companionship, or sexuality, but on producing a male successor to carry the family name. Most marriages were arranged and forced on the woman.

Although there were previous efforts to establish women’s rights, especially in the late nineteenth century, these efforts proved to be largely ineffective prior to the Revolution. When the Chinese Communist Party (CCP) came to power in 1949, they dictated that there should be equality between the sexes. Subsequently, shortly after they assumed control, they set up The All-China Women’s Federation to improve the status and the quality of life of women and enacted a series of laws to make the status of women more in line with that of men. Reforms granted women more equality with men. The CCP, for example, implemented land reforms where land distribution was based on the number of family members. Women and men alike were included in this distribution of land which greatly altered the economic inequality between them. Also, in 1950, China enacted The Marriage Law of the People’s Republic of China which abolished the old system of arranged marriages and gave women the freedom to choose their marriage partner. In 1953 the CCP gave women the right to vote and be elected to the National People’s Congress.

The CCP actively promoted the role of women in China’s work force, as well as appointed women to various political positions, as a way of continuing this equality and liberation of women. Moreover, since women now became wage earners, they became, for the first time, part of the decision-making process within Chinese households. Women increasingly entered the work force and, in rural areas, 70% of rural women were involved in local agriculture.

Women currently comprise 48.5% of China’s population and nearly 71.1% of women between the ages of 18 and 64 are employed. However, most of these women are employed in private industry or in agriculture. The government and state owned enterprises (SOEs) employ a much lower percentage of women as a part of their total workforce. One of the reasons that fewer women are found in government is likely to be the retirement age. While men retire at age 60, women retire between 50 and 55 years of age. Therefore fewer women reach or maintain senior management positions. Another reason is that many women, except for lower skill level positions, don’t find government service particularly attractive and choose to work in industry instead. Lastly, getting appointed to senior positions within the government is still an “old boys club.” Women have a difficult time breaking through this glass barrier. As an example, in 2007 91% of Chinese businesses had women in management positions. In contrast, in 2010, just 45% of SOEs has women in management.

Education has also vastly improved for women throughout the years. Today 91% of girls receive basic education and more women than men are enrolled in Chinese universities. This is in stark contrast to earlier periods when 90% of women, by being denied access to education, were illiterate.

Wage disparity is also as much a fact in China as it is in the U.S. In the United States women generally make 77% of the wages earned by their male counterpart in contrast to China where women earn 69% of the wages paid to their male counterparts.

Women’s rights, as well as their place in the workforce, have progressed significantly in the past 60 years. Today, Chinese businesses are actively seeking women for senior managers. Because of their education and work experience, women are generally regarded as having the same competence level as their male counterpart. However, as retention of skilled Chinese employees within corporate China becomes more and more of an issue, and the ability to demonstrate benevolence towards the workforce assumes greater importance, companies have chosen to place more women in senior management as a way of reducing friction and gaining better employee loyalty and productivity.

Gender parity no longer excludes China, but is now a basic part of Chinese society and business.

If you have any questions please e-mail them to info@thornhillcapital.net