China has enjoyed spectacularly high GDP growth rates for over more than three decades, thanks to the massive economic, social and institutional reforms put in place during a period of intensifying globalization. The reforms, influenced by China’s accession bid to the WTO, took on the challenge of developing a socialist market economy whilst increasingly integrating it with the global economy. While rapid growth and modernization were the key considerations of the economic reforms, policy initiatives were put in place to balance the "opening" of the economy with domestic labour and social development. The goal of full employment was central to China’s people-oriented development strategy, entailing reforms to labour policies and institutions that included the implementation of an active employment policy and the subsequent passing of the Employment Promotion Law. Much has been written about the successes of China’s growth and its economic reforms, but little is known about the concurrent social and labour market changes. This study provides a unique account of China’s move towards increased participation in the market economy and how the Government coped with the massive labour adjustments that came with the restructuring process.