Written by Andreas Bieler.

The integration of Chinese production in the global economy needs to be assessed in view of the underlying dynamics of uneven and combined development. Chinese development is combined with industrialised countries in that its export-led development project is driven by large transnational corporations (TNCs) and their foreign direct investment (FDI) in search of cheap labour to assemble pre-fabricated parts for export to North American and European markets. It is also combined in the sense that modern factories in coastal regions are supplemented by more traditional forms of production further inland. And, of course, it is highly uneven; in the sense that the developmental gap between China and industrialised countries remains vast, and there is an ever larger gap opening up between extremely rich Chinese and the majority of less well-off, often impoverished people within China.

In many respects, China provides a ‘spatial fix’ for the global economy’s crisis of overaccumulation by presenting new profitable investment opportunities. At the same time, such a fix is never stable or permanent. The question is: how long can it work? Considering the possibility of moving production sites from coastal regions towards the hinterland in search of ever cheaper labour, and large domestic investment programmes by the Chinese government, this temporary spatial fix may be prolonged for some time to come.

The spatial fix is closely linked to the discourses around China as a ‘hope project’. This ‘hope project’ is partly orchestrated by Western economists, financial institutions and governments, representing China as an emerging economy, the rising middle class of which may provide the necessary demand to revive the economies of industrialised countries. Equally, China as an international investor providing a new growth dynamic is part of such a discourse. Domestically, the discourse of China as a hope project has been pushed in tandem with a financial stimulus package of 4 trillion RMB in 2008 resulting in an enormous property boom and subsequent bubble. The underlying reality of these discourses is rather bleak. Ngai-Ling Sum, for instance, has spoken of the ‘dialectics of hope’, as the Chinese development project is cause of enormous inequality within China giving rise to new subaltern classes excluded from the benefits of economic growth.

At the heart of this ‘dialectics of hope’ are the sweatshop labour conditions in the large assembly plants controlled either directly or indirectly by foreign TNCs. The structure of the global consumer electronics industry, symbolized by the role played by Foxconn,the Taiwanese company that employs 1.4 million workers in mainland China making, among other things, Apple’s iphone. Long working-hours, low wages and terrible working conditions are only some of the aspects characterising the plight of Foxconn workers. Nevertheless, it is the American company Apple, for whom Foxconn assembles iPhones and iPads, that dominates this relationship and which is ultimately therefore also responsible for exploitative working conditions. At the same time, workers are not only victims. While a new working class is emerging in China on the one hand, a global consumer group using Apple products is being formed on the other. The potential co-operation between these two groups may ultimately provide a way to improve Chinese workers’ conditions.

Although some people argue that the best way of improving workers’ conditions is through technological upgrading of the production process, significant improvements on that score in, for instance, the Chinese garment and textile industry over recent years, it has not been accompanied by social upgrading. In other words, the working conditions of workers themselves have hardly been improved. Others argue that local governments and the particular institutional setting of the accumulation regime may provide a way of improving workers’ conditions. Interestingly, while production facilities in the Pearl River Delta (PRD) are predominantly based on highly exploitative social relations of production, there are a number of examples from the Yangtse River Delta (YRD), where workers enjoy much more stable working relations and improved working conditions. Chun-Yi Lee and I have argued that this is mainly due to the fact that the industries in the YRD are based on more high-value added activities in contrast to the assembly plants in the PRD. In other words, they are located in a very different part of the global production chain. Hence, a more highly trained and stable workforce is required and this can only be achieved through better working conditions, here supported by the local government.

Whether it is the location in the global production chain or the local institutional setting, which is the main cause of good conditions, the answer to this question is clearly not straightforward. Nevertheless, the experience with the strike at the Yue Yuen factory, one of the largest footwear manufacturers in the world, in Dongguan in April 2014 gives food for thought in this respect. When 40000 to 50000 workers went on strike, the global brand Adidas started to move its orders to other production sites showing how little room for manoeuvre is available for the improvement of workers’ conditions when a particular industry finds itself at the bottom of the global production chain.

Ultimately, to a considerable extent the improvement of working conditions will depend on Chinese workers themselves. Indicative is the increasing focus on the right to collective bargaining. Collective bargaining as such will not transform capitalism, as it is always a class compromise promoting ‘industrial harmony’. However, if successful, such a strategy can at least avoid the most severe conditions of exploitation. Based on interactions with activists from Chinese labour NGOs, demands for the transformation of capitalism are not as salient as the right to form independent trade unions based on the right to free association, the right to strike and the right for workers to elect their own representatives.

Related to the activities of Chinese workers is the potential role of the All-China Federation of Trade Unions (ACFTU). At a recent workshop held at the University of Nottingham, Jeremy Anderson of the International Transport Workers’ Federation (ITF) introduced the Memorandum of Understanding, recently signed between the ITF and ACFTU. So far, this mainly includes a focus on dialogue, the exchange of information and further meetings and discussions at sectoral level. Considering that one third of all containers worldwide go through China and China itself has insufficient seafarers, the ACFTU is an interesting contact point for the ITF.

Others, however, have questioned the value of engaging with the ACFTU, which remains part of the (authoritarian) Chinese state apparatus. Perhaps the way forward is a suggestion from Rob Lambert, raised at the same workshop. On the one hand, he argued, not to engage with the ACFTU on principle could be misguided, considering its overall importance. On the other, however, some preconditions should be formulated by other labour movements keeping in mind the basic characteristics of an independent labour organisation. Preconditions should include support for issues such as the right for workers to free association, the right to collective bargaining, the right to strike, etc. Simply to engage with the ACFTU without preconditions does not encourage it to move towards a more ‘normal’ trade union type of organisation, able to support workers in their struggle for better conditions.

Importantly, whatever happens with labour rights in China will affect labour rights elsewhere in the global economy, since Chinese sweatshop working conditions have put downward pressure on workers in other parts of the world.

Andreas Bieler is Professor of Political Economy at the University of Nottingham. With Chun-yi Lee he is working on an ESRC funded project on Chinese labour. Image credit: CC by Shreyans Bhansali/Flickr.