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The need for China to survive and to compete in the rapidly globalising world economy has never been so compelling as in the past decade. Reforming state-owned enterprises (SOEs) has thus been at the top of the Chinese government’s agenda since the mid-1990s. This has led to the emergence of new patterns of enterprise ownership and consequently new employment relations which are distinctively different from those in the traditional SOEs. This paper explores the ways key elements of employment relations may have changed as a result of ownership change; why the trade unions have failed to perform adequately, and what the impact has been on workers of the new form of employment relations. In this paper, the term employment relations is used to include a broad range of issues which fall within the scope of analysis of both traditional fields of industrial relations and human resource management. In particular,aspects of employment relations such as recruitment, pay, training, work reorganisation and the role of the trade unions are explored.