Advertisement

Impact of Chinese Multinationals on Global Labor Conditions and European Strategies

  • Nathalie Homlong
  • Elisabeth SpringlerEmail author
Chapter
  • 222 Downloads

Abstract

Labor-intensive production has been the main driving force for China’s economic development in recent years. At the same time, labor conditions in Chinese factories were closely watched as an increasing number of violations were reported. Areas of violation include long working hours, unpaid or poorly paid labor, and child labor. These problems also led to an increasing number of strikes and a high number of suicides (see among others Chan and Pun Asia Pac J 8 (37): 2–10, 2010; China Labor Watch, The other side of fairy tales—an investigation of labor conditions at five Chinese toy factories, 2015).

While foreign direct investment (FDI) from industrialized economies previously encouraged the development of China’s economy, China has invested strongly in other economies in recent years. It must therefore be asked whether Chinese FDI has also led to an “export” of bad labor conditions. Potential effects for Europe are in the center of the discussion as European economies are seeking FDI inflows since the global financial slump of 2008/2009.

Based on the theoretical distinction between varieties of capitalism, which are applied to emerging economies in this paper, and the characteristics of Chinese multinational enterprises, the role of the state and the characteristics of the institutional setting, e.g. Chinese wage bargaining structure, are explained. Furthermore, experiences from former expansionary phases of Chinese enterprises are compared with the situation in Europe.

References

  1. Allen MMC, Allen ML (2015) Institutions and investments by emerging-economy multinationals in developed economies: polar PV firms and the role of political authorities in Germany. In: Konara P, Ha Y, McDonald F, Wei Y, Pettit CPC, Dunleavy P (eds) The rise of multinationals from emerging economies: achieving a new balance. Palgrave Macmillan, London, pp 83–97Google Scholar
  2. Andrijasevic R, Sacchetto D (2014) Made in the EU: Foxconn in the Czech Republic. WorkingUSA 17:391–415.  https://doi.org/10.1111/wusa.12121 CrossRefGoogle Scholar
  3. Baah AY, Jauch H (2009) Chinese investments in Africa: a labour perspective. www.fnv.nl/site/over-de-fnv/internationaal/mondiaal-fnv/documenten/english/publications/Chinese_investments_in_Africa_final_report1.pd. Accessed 16 Apr 2019
  4. Böckler Impuls (2017) Wenn Chinesen investieren. https://www.boeckler.de/110980_110986.htm. Accessed 30 Apr 2018
  5. Bruns K, Homlong N (2006) Wirtschaftspartner China: Recht, Finanzierung, interkulturelle Fragen, Markteintrittsstrategien, Umwelt. LexisNexis ARD Orac, WienGoogle Scholar
  6. Buhr D, Frankenberger R (2014) Spielarten des inkorporierten Kapitalismus. In: Nölke A, May C, Claar S (eds) Die großen Schwellenländer: Ursachen und Folgen ihres Aufstiegs in der Weltwirtschaft. Springer VS, Wiesbaden, pp 61–84CrossRefGoogle Scholar
  7. Chan J, Pun N (2010) Suicide as protest for the new generation of Chinese migrant workers: Foxconn, global capital, and the state. Asia Pac J 8(37):2–10Google Scholar
  8. China Labor Watch (2015) The other side of fairy tales—an investigation of labor conditions at five Chinese toy factories. http://www.chinalaborwatch.org/upfile/2015_11_20/2015.11.20%20The%20Other%20Side%20of%20Fairy%20Tales%20-%20EN%20final.small.pd. Accessed 2 May 2018
  9. Danhong Z (2018) China investiert weniger in Deutschland. http://www.dw.com/de/china-investiert-weniger-in-deutschland/a-42123071. Accessed 30 Apr 2018
  10. Drahokoupil J (ed) (2017) Chinese investment in Europe: corporate strategies and labour relations. ETUI, BrusselsGoogle Scholar
  11. Dreger C, Schüler-Zhou Y, Schüller M (2017) Chinese foreign direct investment in Europe follows conventional models. https://www.diw.de/documents/publikationen/73/diw_01.c.555760.de/diw_econ_bull_2017-14-1.pdf. Accessed 30 Apr 2018
  12. Esping-Andersen G (1998) Die drei Welten des Wohlfahrtskapitalismus. Zur politischen Ökonomie des Wohlfahrtsstaates. In: Lessenich S, Ostner I (eds) Welten des Wohlfahrtskapitalismus: der Sozialstaat in vergleichender Perspektive. Campus, Frankfurt am Main, pp 19–56Google Scholar
  13. European Commission (2013) Commission Staff Working Document, Impact assessment report on the EU-China investment relations, Accompanying the document Recommendation for a Council Decision authorizing the opening of negotiations on an investment agreement between the European Union and the People’s Republic of China. http://ec.europa.eu/smart-regulation/impact/ia_carried_out/docs/ia_2013/swd_2013_0185_en.pd. Accessed 20 Nov 2018
  14. European Commission (2017a) Commission Staff Working Document, Accompanying the document: proposal for a regulation of the European Parliament and of the Council establishing a framework for screening of foreign direct investments into the European Union. COM(2017) 487 final. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017SC0297&from=EN. Accessed 3 Dec 2018
  15. European Commission (2017b) Proposal for a regulation of the European Parliament and of the Council: establishing a framework for screening of foreign direct investments into the European Union. SWD(2017) 297 final. https://eur-lex.europa.eu/resource.html?uri=cellar:cf655d2a-9858-11e7-b92d-01aa75ed71a1.0001.02/DOC_1&format=PDF. Accessed 3 Dec 2018
  16. Hall P, Soskice D (2004) Varieties of capitalism and institutional complementarities. In: Franzese R, Mooslechner P, Schürz M (eds) Institutional conflicts and complementarities: monetary policy and wage bargaining institutions in EMU. Kluwer Academic, Boston, pp 43–76Google Scholar
  17. Hanemann T, Huotari M (2017) Record flows and growing imbalances—Chinese investment in Europe 2016. https://www.merics.org/sites/default/files/2017-09/MPOC_3_COFDI_2017.pdf. Accessed 10 Apr 2018
  18. Hans-Böckler-Stiftung (2017) Chinesische Investitionen 2016. Mitbestimmungsreport Nr. 37. https://www.boeckler.de/pdf/p_mbf_report_2017_37.pdf. Accessed 30 Apr 2018
  19. Homlong N, Springler E (2017) Chinese outward FDI to small European economies—what makes some countries more attractive than others? Wirtschaft Manag:27–44Google Scholar
  20. Jäger J, Springler E (2015) Eigentumsstrukturen, grenzüberschreitende Investitionen und Entwicklungsdynamiken: Working paper series by the University of Applied Sciences BFI Vienna. 87/2015Google Scholar
  21. Liu M (2014) The future of Chinese labor relations. Perspect Work:76–119Google Scholar
  22. Liu M, Kuruvilla S (2017) The state, the unions, and collective bargaining in China: the good, the bad, and the ugly. Comp Labor Law Policy J 38:187–210Google Scholar
  23. Ma Y, Overbeek H (2015) Chinese foreign direct investment in the European Union: explaining changing patterns. Glob Aff 1:441–454.  https://doi.org/10.1080/23340460.2015.1113796 CrossRefGoogle Scholar
  24. Mazzucato M (2013) Das Kapital des Staates, Eine andere Geschichte von Innovation und Wachstum. Kunstmann, MünchenGoogle Scholar
  25. Mitchie J (2017) Advanced introduction to globalisation. Elgar advanced introductions series. Edward Elgar, CheltenhamGoogle Scholar
  26. Nölke A (2013) Der Aufstieg multinationaler Unternehmen aus Schwellenländern, Staatskapitalismus in besonderer Form. der moderne Staat 6:49–63Google Scholar
  27. Nölke A (2014a) Introduction: toward state capitalism 3.0. In: Nölke A (ed) Multinational corporations from emerging markets: state capitalism 3.0. Palgrave Macmillan, London, pp 1–14CrossRefGoogle Scholar
  28. Nölke A (2014b) Private Chinese multinationals and the long shadow of the state. In: Nölke A (ed) Multinational corporations from emerging markets: state capitalism 3.0. Palgrave Macmillan, London, pp 77–89CrossRefGoogle Scholar
  29. OECD Statistics (2017) FDI regulatory restrictiveness index. https://stats.oecd.org/Index.aspx?datasetcode=FDIINDEX. Accessed 10 Jan 2019
  30. Ozawa T (2014) Multinationals as an instrument of catch-up industrialization: understanding the strategic links between state and industry in emerging markets. In: Nölke A (ed) Multinational corporations from emerging markets: state capitalism 3.0. Palgrave Macmillan, London, pp 31–52CrossRefGoogle Scholar
  31. Scharpf FW (2000) Economic changes, vulnerabilities, and institutional capabilities. In: Scharpf FW, Schmidt VA (eds) Welfare and work in the open economy volume I: from vulnerability to competitiveness in comparative perspective. Oxford University Press, Oxford, pp 21–124CrossRefGoogle Scholar
  32. Scharpf FW, Schmidt VA (2000) Introduction. In: Scharpf FW, Schmidt VA (eds) Welfare and work in the open economy volume i: from vulnerability to competitiveness in comparative perspective. Oxford University Press, Oxford, pp 1–20CrossRefGoogle Scholar
  33. Schipper I (2016) Electronic assembly in Hungary: how labour law fails to protect workers. In: Drahokoupil J, Andrijasevic R, Sacchetto D (eds) Flexible workforces and low profit margins: electronics assembly between Europe and China. European Trade Union Institute (ETUI), BrusselsGoogle Scholar
  34. Schmalz S, Ebenau M (2014) Brasilien, Indien und China: Unterschiedliche Transformationspfade in der Krise. In: Nölke A, May C, Claar S (eds) Die großen Schwellenländer: Ursachen und Folgen ihres Aufstiegs in der Weltwirtschaft. Springer VS, Wiesbaden, pp 43–59CrossRefGoogle Scholar
  35. Seaman J, Huotari M, Otero-Iglesias M (2017) Chinese investment in Europe. A country level approach. ETNC Report. https://www.ifri.org/sites/default/files/atoms/files/etnc_reports_2017_final_20dec2017.pdf. Accessed 10 Apr 2018
  36. ten Brink T (2014) Strukturelle Dilemmata des langen Wirtschaftsaufschwungs in China. In: Nölke A, May C, Claar S (eds) Die großen Schwellenländer : Ursachen und Folgen ihres Aufstiegs in der Weltwirtschaft. Springer VS, Wiesbaden, pp 119–132CrossRefGoogle Scholar
  37. Wöhl S, Springler E (2019) Financialization of the housing market in Austria and Ireland. In: Wöhl S, Springler E, Pachel M, Zeilinger B (eds) State of the European Union: fault lines in European integration. Springer VS, WiesbadenGoogle Scholar
  38. Yildiz HE, Fey CF (2011) Internationalization strategies of firms from emerging economies: is there a strong case for theoretical extension? In: Brennan L (ed) The emergence of southern multinationals: their impact on Europe, vol 30. Palgrave Macmillan, London, pp 303–316CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Institute of Public Administration and PlanningVolda University CollegeVoldaNorway
  2. 2.University of Applied Sciences BFI ViennaViennaAustria

Personalised recommendations