Contagious Capitalism: Globalization and the Politics of Labor in China by Mary Elizabeth GallagherContagious Capitalism: Globalization and the Politics of Labor in China by Mary Elizabeth Gallagher

Contagious Capitalism: Globalization and the Politics of Labor in China

byMary Elizabeth Gallagher

Paperback | April 8, 2007

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One of the core assumptions of recent American foreign policy is that China's post-1978 policy of "reform and openness" will lead to political liberalization. This book challenges that assumption and the general relationship between economic liberalization and democratization. Moreover, it analyzes the effect of foreign direct investment (FDI) liberalization on Chinese labor politics.


Market reforms and increased integration with the global economy have brought about unprecedented economic growth and social change in China during the last quarter of a century.Contagious Capitalismcontends that FDI liberalization played several roles in the process of China's reforms. First, it placed competitive pressure on the state sector to produce more efficiently, thus necessitating new labor practices. Second, it allowed difficult and politically sensitive labor reforms to be extended to other parts of the economy. Third, it caused a reformulation of one of the key ideological debates of reforming socialism: the relative importance of public industry. China's growing integration with the global economy through FDI led to a new focus of debate--away from the public vs. private industry dichotomy and toward a nationalist concern for the fate of Chinese industry.


In comparing China with other Eastern European and Asian economies, two important considerations come into play, the book argues: China's pattern of ownership diversification and China's mode of integration into the global economy. This book relates these two factors to the success of economic change without political liberalization and addresses the way FDI liberalization has affected relations between workers and the ruling Communist Party. Its conclusion: reform and openness in this context resulted in a strengthened Chinese state, a weakened civil society (especially labor), and a delay in political liberalization.

Mary Elizabeth Gallagheris Assistant Professor of Political Science at the University of Michigan, Ann Arbor. She is also a faculty associate of the Center for Chinese Studies and the Institute for Labor and Industrial Relations.
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Title:Contagious Capitalism: Globalization and the Politics of Labor in ChinaFormat:PaperbackDimensions:256 pagesPublished:April 8, 2007Publisher:Princeton University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0691130361

ISBN - 13:9780691130361

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Table of Contents

List of Illustrations ix
Acknowledgments xi
List of Abbreviations xv

Chapter One: Introduction 1

Chapter Two: Contagious Capitalism 9
FDI as Competitive Pressure 11
FDI and Laboratories for Change 14
FDI and Ideological Change 18
"Opening Up" in Comparative Perspective 19
Conclusion 28

Chapter Three: Blurring Boundaries 30
Chapter Overview 33
FDI in China 33
The Evolution of Foreign Ownership 37
"Letting Go The Small: " FDI and the Sale of SOEs: 1992-45
Competitive Liberalization and Its Effects 56
Conclusion 60

Chapter Four: The Unmitigated Market 62
Policy Liberalization and Labor Flexibility 65
Chinese Firms under Socialism, Pre-1978 66
The Era of Partial Reform, 1978-1992 70
Contagious Capitalism, 1992-76
Contracts and Employment Insecurity 76
Management Domination over or Suppression of Worker Organizations 82
Conclusion 96

Chapter Five: "Use the Law as Your Weapon!" 98
China's Turn to the Rule of Law 101
Labor and Legal Institutionalization 103
The Labor Contract System 105
The National Labor Law 110
Rising Conflict: Labor Disputes in the 1990s 114
Labor Disputes in Comparative Perspective 116
Trends in PRC Labor Disputes 121
Labor Conflict and Foreign Investment 130
Conclusion 131

Chapter Six: From State-owned to National Industry 133
Giving Up on Socialism 136
Developmentalism in Practice: From the Center to the Firm 139
Conclusion 153

Conclusion: The Contradiction of "Reform and Openness" 154
Appendix: Firms and Interviews 159
Notes 163
Bibliography 215
Index 235

Editorial Reviews

"The relationship between foreign direct investment and the evolution of labor reforms in China is much misunderstood. This book contributes in significant ways to this important area of knowledge."-Doug Guthrie, New York University