In Chinese labor law, a collective bargaining agreement is a kind of agreement made between the employees collectively and the employer. However, bargaining capability is limited in China because the government believes that its legal regime for labor law, occupational health and safety, and emergency management already effectively meet the needs of workers. Nonetheless, the China Labor Unions Act provides for a collective bargaining process, where management and labor have equally bargaining power as to wage payments, which culminate in a collective bargaining agreement.

This right is enshrined because of the weaker position of labor in these negotiations. Chinese labor theory believes that management has superior bargaining power to labor because of their close organization and high level of skill, which allows them to achieve unfair bargains with disorganized workers with poor negotiating skills. The collective bargaining process was instituted into China’s statutes to remedy this imbalance.