Chinese Labour in the Global Economy

Capitalist Exploitation and Strategies of Resistance

Andreas Bieler, Chun-Yi Lee

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9781138726604
• eBook ISBN: 9781351751407
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Chinese development is widely considered to be an example of successful developmental catch-up with double-digit growth rates year on year. Some even talk of an emerging power, which may in time replace the US as the global economy's hegemon. And yet there is a dark underside to this 'miracle' in the form of workers' long hours, low pay and lack of welfare benefits. Increasing levels of inequality have gone hand in hand with super exploitative working conditions. Nevertheless, Chinese workers have not simply accepted these conditions of super-exploitation; they have started to fight back.

Set against the background of China's integration into the global economy along uneven and combined development lines, this volume explores new forms of resistance by Chinese workers, be it through the state trade union All-China Federation of Trade Unions (ACFTU) or through informal labour NGOs. It also analyses the links between Chinese formal and informal labour organisations, with labour organisations outside China.

This book was originally published as a special issue of the journal Globalizations.

Chinese Labour in the Global Economy: An Introduction

ANDREAS BIELER & CHUN-YI LEE

University of Nottingham, Nottingham, UK

ABSTRACT This Introduction outlines the main purpose of this special issue volume: to analyse new forms of resistance by Chinese workers against conditions of super-exploitation. After an assessment of the new international division of labour, we provide an overview of Chinese production in the global economy, followed by an introduction of the contributions to this volume.

China is generally regarded as the new economic powerhouse in the global political economy. Some even talk of an emerging power, which may in time replace the US as the global economy’s hegemon. And yet, there is a dark underside to this ‘miracle’ in the form of workers’ long hours, low pay, and lack of welfare benefits. Increasing levels of inequality have gone hand in hand with widespread working conditions characterised by super-exploitation.

Nevertheless, Chinese workers have not simply accepted these conditions of exploitation. They have started to fight back. The purpose of this volume is to analyse these various forms of resistance by Chinese workers and the way they are organised, be it through the official state trade union All-China Federation of Trade Unions (ACFTU), be it through informal labour NGOs, or indeed both. Considering the large number of workers in Chinese production, what happens in China does not only affect Chinese workers, but equally workers elsewhere. Hence, the findings of this special issue on Chinese labour in the global economy are not only confined to China. They are of relevance for the global economy as a whole.

In this Introduction, we will first analyse key developments in the global political economy to set the stage. Second, we will assess the location of Chinese production within this new international division of labour, before providing an overview of the contributions to this volume.

Global Restructuring: The New International Division of Labour

The post-Second World War years in industrialised countries were characterised by enormous growth rates and increasing wealth. National class compromises between capital and labour were the foundation of this post-war economic recovery. While labour accepted capital’s prerogative over the means of production and the way production is organised, capital in turn agreed on workers participating in growing wealth through a steady increase in wages and improvement in working conditions. In tripartite relationships, the state supported this compromise through Keynesian, demand-led economic policies guaranteeing full employment in a system of mass employment and mass consumption. Additionally, the state supported the class compromise through an expanding welfare state establishing universal access to services such as health and education. Observers often speak of a golden capitalist age when commenting on the post-war period. Nevertheless, when the rate of profit started to decline, economic growth was no longer strong enough to ensure both, capitalist super-profits and rising wages for workers. The late 1960s and the early 1970s saw increasing levels of industrial conflict in Western industrialised countries.

In response, capital renounced the national class compromises. While they technologically innovated production at the high-value added end in industrialised countries, in a spatial fix labour-intensive parts of manufacturing such as the textile industry were transferred to cheap labour locations in the Global South (Silver, 2003, pp. 64–66). Transnational corporations (TNCs) became the dominant companies within the new, transnationalised social relations of production, and a transnational capitalist class emerged as the new key agent of global capital within what has been referred to as globalisation (Robinson, 2004).

The increasing transnationalisation of production is reflected in the drastic increase in FDI especially since the mid-1980s, establishing lasting production links across borders. Outflows of FDI rose from US$88 billion in 1986 to US$1187 billion in 2000 as peak year (Bieler, 2006, p. 50). A period of recession caused a decline in FDI flows from 2001 to 2003, but four years of consecutive growth led to a new all-time high of FDI outflows of US$1996.5 billion in 2007 (UNCTAD, 2008, p. 253). Overall, there were close to 80,000 TNCs with roughly the same number of foreign affiliates in 2007 (UNCTAD, 2008, p. 212). Unsurprisingly, FDI flows have again declined since the onset of the global financial crisis in 2008 (UNCTAD, 2015, p. 18), but even slightly lower levels contribute to the continuing build-up of FDI stocks over time, indicating the ever more important role played by TNCs. While outward FDI stocks had been US$2,253,944 million in 1990, they were US$7,298,188 million in 2000 and US$25,874,757 million in 2014 (UNCTAD, 2015, p. A7).

The increasing transnationalisation of production has gone hand in hand with greater decentralisation and fragmentation of the production process itself through processes of outsourcing along the production chain. Thus, transnational production, under the direction of TNCs, is increasingly organised in global commodity chains (GCCs) (Robinson, 2008, p. 27). In this process, TNCs ‘began dividing the production process into ever finer segments, both vertical and horizontal, and locating the separate stages in two or more countries, creating cross-border production networks’ (Hart-Landsberg, 2013, p. 91). In these networks, TNCs no longer own the various production sites along the GCC, but rely on ‘independent contract manufacturers to procure the necessary parts and components and oversee their assembly into final products’ (Hart-Landsberg, 2013, p. 92). In other words, TNCs are still in charge, but their strategy has significantly changed. From owning cross-border production structures, they have moved to co-ordinating GCCs. As confirmed by the UN, ‘TNC-coordinated [GCCs] account for some 80 per cent of global trade. Patterns of value added trade in [GCCs] are shaped to a significant extent by the investment decisions of TNCs’ (UNCTAD, 2013, p. xxii).

Developing Asia occupies the leading position in the new international division of labour. The region’s share in total world exports of manufacturers grew from 11.1 percent in 1996–1997 to 33.8 percent in 2009/2010. Its share of total third world exports of manufactures increased from 68 percent to 76 percent over the same period. (Hart-Landsberg, 2015, p. 4)

Within Asia, China mainly operates as the regional assembly platform.

It is China’s unique position as the region’s production platform that enabled the country to increase its share of world exports of IT products from 3 percent in 1992 to 24 percent in 2006, and its share of electrical goods from 4 percent to 21 percent over the same period. (Hart-Landsberg, 2013, p. 34)

In turn, these products are mainly destined for markets in North America and Europe integrating East Asia tightly with the global economy, but also making it dependent on continuing demand in the Global North. In sum,

since the region’s trade activity largely involves an intraregional trade of parts and components culminating in China-based exports aimed primarily at the United States and the European Union, the reality is that Asia has become ever more tightly integrated and dependent on exporting to developed capitalist markets, especially the United States. (Hart-Landsberg, 2013, p. 36)

The idea of South–South trade and economic co-operation as an alternative growth model for developing countries has not materialised. Rather, while China is the assembly platform of global capital, Latin America and Africa have mainly been reduced to exporters of primary commodities, with China having become their main customer.

While Latin American and sub-Saharan nations have long specialised in the export of primary commodities, developing Asia, especially China, has now replaced core capitalist countries as their main export market. China has surpassed the United States as the world’s largest consumer of major metals and agricultural commodities. In 2011, it consumed approximately 20 percent of all non-renewable energy resources, 23 percent of major agricultural crops, and 40 percent of base metals. (Hart-Landsberg, 2015, p. 6)

Importantly, as David Coates remarked, the increasing organisation of production across borders and the related possibility for capital to move labour-intensive production to cheap labour locations is not due to new technology, but the result of social developments. ‘Capital is more geographically mobile than it was in the past because it now has more proletariats on which to land’ (Coates, 2000, p. 255) and more proletariats to create. The integration of China, India, and the former Soviet Union during the 1980s and 1990s doubled the global workforce to almost three billion by 2000 (Freeman, 2010). In 2011, China’s working-age population alone numbered over 1 billion (Economist, 2012). The increase in the global workforce has also fuelled the informalisation of production. This is especially the case in developing countries, which had never been in a position to establish a large industrial sector with permanent and secure employment.

According to the most recent estimates, non-agricultural employment in the informal economy represents 82 per cent of total employment in South Asia, 66 per cent in sub-Saharan Africa, 65 per cent in East and South-East Asia (excluding China), 51 per cent in Latin America and 10 per cent in Eastern Europe and Central Asia. (ILO, 2014, p. 6)

Nevertheless, informalisation more and more also affects developed countries in the North, where employers are on the offensive and demand a flexibilisation of the labour market with the argument that it is necessary in order to retain competitiveness (Standing, 2011). ‘Although affecting workers in all core countries, the trend has probably gone furthest in Japan. There, part-time workers, who make on average 38 percent less per hour than full-time workers, now account for approximately 40 percent of the workforce’ (Hart-Landsberg, 2015, p. 9).

The implications for workers around the world are clear. In times of transnational production, national labour movements are increasingly put into competition with each other. If workers in one country do not accept the demands by capital, production is moved to other locations where workers are more amenable. While trade unions were able to organise workers well at the national level, they have struggled to avoid cross-border competition. Additionally, it has been very difficult to organise along GCCs as well as within the informal economy (Bieler, Lindberg, & Sauerborn, 2010).

Chinese Production in the Global Political Economy

As a result of the particular location of Chinese labour in the global political economy as outlined above, Chinese production is characterised by two key aspects. First, it is predominantly based on cheap labour, necessary for assembling the various parts into final products for export to North American and European markets. ‘Chinese leaders have, like the leaders of most other countries, consciously pursued a low-wage growth strategy for some time’ (Hart-Landsberg, 2015, p. 14). Second, Chinese exports are dominated by foreign TNCs. By 2003, foreign TNCs and joint ventures ‘accounted for almost 80% of China’s exports of industrial machinery, 90% of computers, components, and peripherals; and 71% of electronics and telecommunications equipment’ (Panitch & Gindin, 2014, p. 152). This tendency has intensified further in recent years.

TNCs produce approximately 85 percent of China’s high technology exports. Moreover, the share of China’s high technology exports produced by wholly owned TNCs continues to grow, from 55 percent in 2002 to 68 percent in 2009, suggesting a tightening of foreign control. (Hart-Landsberg, 2015, p. 5).

Unsurprisingly, it is these foreign TNCs that reap super-profits from exploiting Chinese workers. Foxconn, assembling products for Apple, is a clear example in this respect. ‘Hon Hai [Foxconn] made $2.4 billion in profits in 2010, or $2400 per employee, compared to $263,000 in profits reaped by Apple for each of its 63,000 employees (43,000 of whom are in the United States)’ (Smith, 2012).

As most export production is based on cheap labour, China must ensure a continuing supply of workers willing to work for low wages. This has been secured partly as a result of the privatisation of state-owned enterprises in the mid-1990s, which resulted in the redundancy of some 60 million workers, and partly due to the growing group of migrant workers, which amounted to 269 million workers by 2013, coming from the countryside to the new production power houses in the coastal areas (Chan & Selden, 2014, pp. 600–601). The power of workers decreased significantly as a result of increasing precarity and labour’s share of GDP ‘fell from approximately 53 percent of GDP in 1992 to below 40 percent in 2006. Private consumption as a percent of GDP also declined, falling from approximately 47 percent to 36 percent over the same period’ (Hart-Landsberg, 2013, p. 50; see also Qi, 2014).

The agricultural sector has played a crucial role in ensuring the supply of cheap labour in that it provided a separate stream of income especially for the dependents of migrant workers left back at home. In turn, this facilitated the super-exploitation of migrant workers themselves. Agriculture is, thus, closely linked to industrial production in that

agriculture and the rural society pr...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• Citation Information
• Notes on Contributors
• 1. Chinese Labour in the Global Economy: An Introduction
• 2. China’s Place in the Global Divisions of Labour: An Uneven and Combined Development Perspective
• 3. Exploitation and Resistance: A Comparative Analysis of the Chinese Cheap Labour Electronics and High-Value Added IT Sectors
• 4. Why the Foxconn Model Does Not Die: Production Networks and Labour Relations in the IT Industry in South China
• 5. Bringing Class Struggles Back: A Marxian Analysis of the State and Class Relations in China
• 6. A Class Against Capital: Class and Collective Bargaining in Guangdong
• 7. The Labour Politics of China’s Rural Migrant Workers
• 8. Dockworkers’ Resistance and Union Reform within China’s Globalised Seaport Industry
• 9. The Yue Yuen Strike: Industrial Transformation and Labour Unrest in the Pearl River Delta
• 10. The Makings of Subaltern Subjects: Embodiment, Contradictory Consciousness, and Re-hegemonization of the Diaosi in China
• 11. The China Price: The All-China Federation of Trade Unions and the Repressed Question of International Labour Standards
• 12. What Future for Chinese Labour and Transnational Solidarity?
• Index