Executive Summary
This report examines the issue of prison labor in China. Against the backdrop of increasing international attention, monitoring, and enforcement regarding systemic forced labor in China, the report aims to explore the institutional foundations of this practice within the Chinese prison system, analyze how prison-run enterprises embed products made by incarcerated laborers into global supply chains through multi-layer subcontracting, disguised registration, and local economic collaborations, and finally discuss the legal frictions and responsibility frameworks between Chinese prison labor practices and international human rights law and labor conventions.
The report is intended for three major audiences—policymakers and law enforcement agencies, businesses and investors, and academic and civil society monitoring groups. It is organized around three central themes: the institutional structure of prison enterprises, the points-based evaluation system, and the practice of “reform through labor.” Key issues addressed include:
- Institutionalized Logic of Coercion: Although labor is defined in legal texts as a means of “reform,” in practice it is directly tied to points-based evaluation systems and sentence reduction/parole decisions. This creates a structural incentive-and-sanction mechanism of “trading labor for freedom,” effectively undermining the voluntariness of labor.
- Dual Roles and Conflicts of Interest: Prison enterprises carry both judicial and economic functions. They are responsible for custody and rehabilitation while simultaneously acting as market actors accepting orders and generating revenue. These conflicting objectives often lead to weakened labor protections.
- Working Hour Limits are Systematically Relaxed: Although there are nominal limits such as “six days per week and eight hours per day,” exception clauses for “seasonal production” or “urgent tasks” are vaguely defined and lack external oversight, effectively creating a structural gateway for normalized overtime.
- Weak Labor Protection and Injury Compensation: Occupational Safety and Health (OSH) regulations are incomplete, and some cases show inadequate investment in protective equipment. Injury compensation is calculated based on prison labor stipends rather than social wage standards, resulting in significantly lower compensation. Channels for appeal and third-party medical assessment are extremely limited.
- Real Risks in Trade and Supply Chains: Despite formal export bans for prison-made products, such goods enter domestic and international markets through layered subcontracting and enterprise “rebranding.” Recent legislation, enforcement actions, and litigation within global business and human rights due diligence frameworks reveal that these risks are receiving increased recognition.
Recommendations:
Reorientation: Reassess the dual judicial-economic role of prison enterprises and re-evaluate the positioning of “reform through labor.”
Enforcement: Clarify the specific conditions, approval procedures, and documentation requirements for work-hour exceptions; establish unified OSH standards; create independent medical assessment and injury review mechanisms; gradually align compensation baselines with broader social standards.
Transparency: Promote annual disclosure of prison enterprise financials and order information, as well as data, on labor-related accidents and compensation.
Oversight: Allow civil society organizations and academic institutions to conduct independent assessments and longitudinal studies under controlled conditions.
