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Lecture 5

Week 5 - February 3, 4 & 6 -- China, Globalization and Labour

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Labour Studies
John Barkans

LABR ST 2G03 – LECTURE – February 3, 4, &6, 2014 LECTURE – FEB 3 – SARAH K. sent CHINA, GLOBALIZATION AND LABOUR - Forces of Labour by Silver, response that the labour movement is dead (the race to the bottom killed off the labour movement), shattered, weakened that it is not a force anymore - Her thesis is that labour movement and the struggles haven't disappeared, it just has flowed to a more capitalist industry , follow to flow of the labour movement to see what is going on in these countries - Bangladesh article o Shifted production to south in textile industry and despite that country being repressive and not having highest standards or protecting workers, you still see the same thing occurring there that was happening in the auto industry - Look at China, global factory of the world - How Chinese policy was altered and changed to facilitate China becoming the world factory o Labour movements in China  China is very authoritarian society/ state dominated society, tight restrictions on workers movements, would not expect much protest or organizing going on, but there is quite a bit - How China has been transformed and became the Global Factory of the world o Under communist party regime, he led China from communist revolution until his death o When he ran, China was a inward-looking, self-sufficient county, centrally planned, not engaged in much trade with other nations economy o Transformed into a labour intensive, export-led economy o Initially, they settled on labour intensive industries for export (like those seen in Bangladesh) also developed some large scale capitalist industries as well o Big shift in global division in labour - Difference between labour intensive (renting one room, mostly focused on the labour part) and capitalist intensive (Fordism is a typical example of a capitalist intensive industry, more money in the capitalist) Difference between the Chinese capitalist industries vs the capitalist industries in the - North  Difference: that even in those heavy more forced cap. industry, China tends to not be as capital intensive as those of the North o North: relying more on capitalist investments to produce profit o China: savings on labour costs, more labour - In China, 1990-2003 - How much of a share of manufacturing goods, 1.7% - 7% China's manufactured % export of the global total o 2002 top producer of export for over 80 products (garments to refrigerators/ microwaves) o 2005 had become 3rd largest trading company behind the United States and Germany in terms of trade (one reading was predicting that China would surpass US, and it happened) o 2012 China surpassed the US and became the world's leader in manufactured goods' exports - Two dominant explanations/ narratives how this took place: 1. Neoliberal explanation: the private sector has been allowed to develop, free market principles, comparative advantage (cheap labour supply) 2. Institutional explanation: the state that accounts for this economic miracle, the state is maintained a pervasive presence across the country and the state had deliberately destroying market industries to build up their own LECTURE – FEB 4 – LYDIA H. sent CHINA, GLOABLIZATION AND LABOUR… continued - Two Dominant “narratives”/explanations for the Chinese “economic miracle”/why this occurred 1. Neoliberalism: the market, opened up and liberalized markets – move toward neoliberal policies 2. Institutional explanation: the state, the reason for this economic miracle - In the reading, they are not satisfied with these – too sufficient – too much credit to indigenous processes - All of the things going on globally created this economic miracle – China integrated into global capitalism - Prior 1978 – China under control of communist party, and institutional arraignments created, both the cities and the rural areas made it problematic and difficult for China to be incorporated into Global capitalism Example: cities and urban areas, heavily dominated by state on enterprises (SOEs) “iron rice bowl” o States guarantee of a lively hood – dominated all the lead sectors o Workers in these state owned enterprises: secure security - Rural: operated under a commune system, agriculture was organized under this system o Was not that efficient and productive o Some social welfare provisions, not nearly as great as existed - Why didn’t people working in the communes drift to the cities? o Have a permit to work in the city – centralized control – from a commune: you lost all of your social welfare provisions o Strict residency permit system that maintained that position o Vast differences, social safety net - After 1978 – Economic Reforms o Open Door Policy – attempt to follow path of newly industrializing East Asian countries.  Such as: Singapore, Hong Kong, Taiwan o China developed special zones (restricted areas) to operate as export processing zones:  1 one: 1979 Shenzhen and other in Guangdong (SEZs)  Coastal Development Strategy extended it to all coastal regions o 1980: two other economic zones established – three by 1980 o Regulation in these economic zones was decentralized o Export-oriented development in EPZs - China: foreign direct investment not from North, but from other east Asian countries o Why did they invest in China? (Hong Kong)  Labour was expensive in other countries  Go to China where there is potential for cheap supply of labour  Economic zones saw this is opportunity and fled in  Open Door Policy: was to establish, Guangdong, as a labour intensive manufacturer o Who were they producing for in Hong Kong?  Wal-Mart, etc. – China now producing for these companies rather than Hong Kong  1987: 7800 foreign funded enterprises in China; 6600 from Hong Kong; 65% of foreign investment from Hong Kong • employed workers to China o What were the Chinese hoping for?  Foreign investment from the North, and more high-tech enterprises and investment  Asian owned factories were the main investment  Foreign direct investment in China is massive  Most of it is invested in the Asian factories, by transnational - The ‘’making of the Chinese working class’’ o Cantin & Taylor’s Explanation  Just because you have investment does not mean that you will have production, you need a labour force  China went through this rapid industrialization, employing millions of people • Labour force did not just exist, it had to be created  Communal land
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