University of Twente Student Theses


Capital versus labor : does China follow the European example on social policy?

Müller, M. (2011) Capital versus labor : does China follow the European example on social policy?

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Abstract:Triggered by its economic opening-up and excessive liberalization policies in the 1980s, China has experienced enormous economic growth and is today often referred to as the "workshop of the world". International capital entered into the country and production flourished as China built on its large supply of low-cost labor. Yet, in recent years heavy working conditions and the constantly widening of income disparities gave rise to social tensions. An alarming Gini-Coefficient1 of 0.45 has been estimated in 2002 (IADB 2006, p.14). Social problems have further increased as the global financial crisis led to a collapse of exports and consequently to a growth in unemployment. These developments of China's economic system resemble to an extent to the situation of Western European countries in the beginning of the 20th century, when the emergence of liberalism had likewise generated tensions between capital and labor. During this time, Karl Polanyi (1944) predicted that labor will compel protection through state intervention when social pressure becomes too great a burden. This movement was indeed shown in Europe.2 Marc Blyth (2002) has outlined the role of ideas in this continuing movement between capital and labor that steer discussion towards either a focus on free markets or the protection of labor. In attacking the legitimacy of the existing order, ideas can ultimately lead to institutional change. The thesis follows Blyth's approach and aims to assess the role of ideas in China's public discourse on state governance with regards to labor conditions in China's low-wage sectors. It is hypothesized that f newly emerging ideas successfully attack the legitimacy of ideas, upon which existing institutions are based then a move towards institutional change is likely. The thesis examines Chinese newspaper articles in order to identify ideas suggesting such a effect of ideas by conducting a qualitative content analysis. Finding such ideas would imply that China is likely to follow up on social policy after decades of primarily focusing on economic growth. Chinese manufacturing sectors are largely integrated into European production networks. Therefore any changes in China's economic policies can result an impact on business for industrialized countries in Europe. Furthermore, it is apparent that a rising global civil society is alerted by reports of frequent infringements on labor rights in global supply chains. The analysis of ideas has recently become more popular in institutional change research. Ideas must not be seen as subordinated to fixed interests, but as constituent parts of interests. The undertaking of identifying ideas as indicators for change in China hence demonstrates scientific actuality and empirical relevance. Yet, China is a particular challenging case for investigation. According to a survey of the nongovernmental organization Freedom House, the Chinese press is under extensive state and party control and ranked "not free". China is one of the world's poorest performers with regards to freedom of the press (Freedom House 2010). Recognizing the particular challenges of the Chinese case, the claim of this paper is not to make concrete predictions for China's future policy direction, which is hardly possible owing to the circumstances of China's opaqueness. Neither is it to finally confirm or negate institutional change, as this constitutes a long-term process, which has to be traced over wider periods of investigation. But it is firstly, to assess ideas on scene in the Chinese discourse that point towards a move of stronger public governance institutions in response to labor unrest. Secondly, to reflect on these ideas while consulting secondary literature. The next section will introduce to the dynamics of institutional change in Western Europe in the 20th century, while presenting Polanyi's ideas on the conflicting relationship between market liberalism and labor. These theoretical thoughts provide the wider framework underlying the research interest of this thesis and are likewise the groundwork for Blyth's theory. I will therefore present his main ideas, before attention in drawn to an interesting parallel that is the rise of neo-liberalism in several developing countries, which leads to the specific interest of investigating the case of China. The subsequent sections will then outline firstly, Marc Blyth's theoretical approach, secondly, the research design and methodological aspects, thirdly, empirical findings of the analysis of Chinese newspaper articles and lastly, it will be reflected on the results and its implications for the labor conditions before a conclusion is drawn.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:88 social and public administration
Programme:Public Administration BSc (56627)
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