Globalization and China's 'Race to the Bottom' in Labour Standards

Globalization, or integration with the world economy via WTO membership, was expected to increase foriegn investment and benefit the labour intensive manufacturing sector in China. Yet, although foreign investment has been flowing into China and employment in the low-wage industries is expanding, wages of Chinese workers are not rising. In fact, China is defining the bottom in the race to the bottom of labour standards. This paper analyses this phenomenon asking what it is in the Chinese system that allows it to lead in this race. The paper analyses the domestic conditions under which the benefits of globalization has not, and will not, trickle down to those who make the products. Comparing Mexico's maquiladoras with a detailed study of China's hukou system and how it affectes the wages of migrant workers, the paper shows how the Chinese hukou system can keep wages down more easily than can be done in Mexico. [George Ernest Morrison Lecture on Ethnography, 2002, The Contemporary China Centre]