Apple’s commercial triumph rests in part on the outsourcing of its consumer electronics production to Asia. Drawing on extensive fieldwork at China’s leading exporter—the Taiwanese-owned Foxconn—the power dynamics of the buyer-driven supply chain are analysed in the context of the national terrains that mediate or even accentuate global pressures. Power asymmetries assure the dominance of Apple in price setting and the timing of product delivery, resulting in intense pressures and illegal overtime for workers. Responding to the high-pressure production regime, the young generation of Chinese rural migrant workers engages in a crescendo of individual and collective struggles to define their rights and defend their dignity in the face of combined corporate and state power.
The politics of global production: Apple,
Foxconn and China’s new working class
Jenny Chan, Ngai Pun and Mark Selden
Apple’s commercial triumph rests in part on the outsourcing of
its consumer electronics production to Asia. Drawing on exten-
sive ﬁeldwork at China’s leading exporter—the Taiwanese-
owned Foxconn—the power dynamics of the buyer-driven
supply chain are analysed in the context of the national ter-
rains that mediate or even accentuate global pressures. Power
asymmetries assure the dominance of Apple in price setting and
the timing of product delivery, resulting in intense pressures
and illegal overtime for workers. Responding to the high-
pressure production regime, the young generation of Chinese
rural migrant workers engages in a crescendo of individual and
collective struggles to deﬁne their rights and defend their
dignity in the face of combined corporate and state power.
Keywords: Foxconn, Apple, global supply chains, labour,
China, outsourcing, consumer electronics manufacturing,
The magnitude of Apple’s commercial success is paralleled by, and based upon, the
scale of production in its supply chain factories, the most important of them located in
Asia (Apple, 2012a: 7). As the principal manufacturer of products and components for
Apple, Taiwanese company Foxconn1currently employs 1.4 million workers in China
alone. Arguably, then, just as Apple has achieved a globally dominant position,
described as ‘the world’s most valuable brand’ (Brand Finance Global 500, 2013), so too
have the fortunes of Foxconn been entwined with Apple’s success, facilitating
Foxconn’s rise to become the world’s largest electronics contractor (Dinges, 2010). This
article explores the contradictions between capital and labour in the context of the
global production chains of the consumer electronics industry. Drawing on concepts
from the Global Commodity Chains and Global Value Chains framework (Gerefﬁ and
Jenny Chan ([email protected]) is a Ph.D. candidate, Great Britain-China Educational Trust
Awardee and Reid Research Scholar in the Faculty of History and Social Sciences at Royal Holloway,
University of London. She was Chief Coordinator (2006–2009) of Hong Kong–based labour rights group
Students and Scholars Against Corporate Misbehavior (SACOM). Ngai Pun ([email protected]) is
Professor in the Department of Applied Social Sciences at Hong Kong Polytechnic University and
Deputy Director in the China Social Work Research Center at Peking University and Hong Kong
Polytechnic University. Mark Selden ([email protected]) is Senior Research Associate in the East
Asia Program at Cornell University, Coordinator of The Asia-Paciﬁc Journal and Professor Emeritus of
History and Sociology at State University of New York, Binghamton.
The authors have jointly written a book entitled Separate Dreams: Apple, Foxconn and a New Generation of
Chinese Workers (Ngai Pun, Jenny Chan and Mark Selden, forthcoming).
New Technology, Work and Employment 28:2
© 2013 John Wiley & Sons Ltd100 New Technology, Work and Employment
Korzeniewicz, 1994; Bair, 2005; Gerefﬁ et al., 2005), the article analyses the power
dynamics of the buyer-driven supply chain and the national terrains that mediate or
even accentuate global pressures.
The principal focus is on labour in the electronics supply chain, including working
conditions and labour as agency, consistent with recent studies of labour as the key
element in global production chains or networks (McKay, 2006; Smith et al., 2006; Taylor
and Bain, 2008; Webster et al., 2008; Taylor et al., 2013). In particular, the concentration
of capital in China and the important roles played by Asian contractors open new
terrains of labour struggle (Silver, 2003; Appelbaum, 2008; Silver and Zhang, 2009).
This inquiry evaluates the incentives for Apple to outsource and to concentrate pro-
duction in a small number of ﬁnal-assembly facilities in China. It also examines the
potential risks or disincentives that might compel Apple to respond more directly, or
responsibly, to negative publicity surrounding labour conditions and the collective
actions of workers in its supply chain. While the speciﬁc detail is concerned with the
interaction between Apple and Foxconn, the article brieﬂy considers the relationship
between other buyers (e.g. Dell) and contractors (e.g. Pegatron). Consequently, it
locates emergent labour struggles more broadly in the electronics sector as a whole.
The authors draw on interviews with 14 managers and 43 workers outside of major
Foxconn factory complexes, where employees were not subjected to company surveil-
lance. The manager interviewees were responsible for production management (four
persons), commodity procurement (three persons), product engineering (two persons)
and human resources (ﬁve persons). All workers interviewed were rural migrants aged
16–28, who worked in assembly (semi-ﬁnished and ﬁnished products), quality testing
(functionality and audiovisual appearance), metal processing and packaging. These
interview data are complemented by ﬁeldwork observations conducted between June
2010 and May 2013 in Shenzhen (Guangdong), Taiyuan (Shanxi) and Chengdu
(Sichuan), which are major industrial centres in coastal, northern central and south-
western China. New enterprise-level data have provided evidence of the replication of
Foxconn’s management methods across its plants, the tensions between Foxconn and
its largest corporate buyers, the working experiences and discontents of workers, and
explosive episodes of labour protest. Primary evidence is supplemented by company
annual reports, scholarly studies, reports from labour rights’ groups and journalistic
The article is structured as follows. First, the literature on global outsourcing and the
challenges to labour will be reviewed. The next section will consider the growth of
China as industrial superpower and the emergence and distinctive character of a new
working class. These discussions will be followed by an analysis of the Apple–Foxconn
business relationship, and the responses of workers to heightened production
demands in the ‘just-in-time’ regime. The concluding part will consider the future of
the young generation of China’s rural migrant workers who are struggling to deﬁne
and defend their rights and dignity in the multilayered network of corporate interests
and state power.
The politics of global production
The corporate search for higher proﬁts has been enhanced by efﬁcient transportation
and communications technologies, neoliberal trade policies and international ﬁnancial
services, as well as access to immigrants and surplus labour. Multinationals have
reduced, if not eliminated, major barriers to capital mobility across spaces of uneven
development (Harrison, 1997; Harvey, 2010). Within contemporary global supply
chains, scholars (Henderson and Nadvi, 2011; Sturgeon et al., 2011) highlight the power
asymmetry between buyers and contractors, in which giant retailers and branded
merchandisers play decisive roles in establishing and dominating global networks of
production and distribution. Under buyer-driven commodity chains, Lichtenstein
(2009) and Chan (2011) ﬁnd that American retailers and branded merchandisers con-
stantly pressure factories as well as logistic service providers to lower costs and raise
efﬁciency and speed. ‘The determination of retailers to cut costs to the bare bone leaves
© 2013 John Wiley & Sons Ltd Politics of global production 101
little room for [China-based] contractors to maintain labour standards’ (Bonacich and
Hamilton, 2011: 225). The distinction between retailers and merchandisers in their
control over suppliers has become insigniﬁcant when ‘most global retailers have suc-
cessfully developed private-label (or store-label) programs, where they arrange with
manufacturers or contractors to produce their own label’ (Bonacich and Hamilton,
2011: 218). In the electronics industry, Lüthje (2006: 17–18) observes that brand-name
ﬁrms have focused on ‘product development, design, and marketing’, gaining a larger
share of the value created than hardware manufacturing, which is mostly outsourced
and performed by formally independent contractors. ‘Contract manufacturers’ have
emerged to provide ﬁnal-assembly and value-added services to technology ﬁrms and
giant retailers (Starosta, 2010; Dedrick and Kraemer, 2011).
Asian contractors have been upgrading and growing in size and scale. Lee and
Gerefﬁ (2013) explain the co-evolution process that capital concentration and consoli-
dation of branded smartphone leaders in China and other global supply bases has
advanced alongside the expansion of and innovation within their large assemblers,
notably Foxconn and Flextronics. Appelbaum (2008) ﬁnds that East Asian contractors,
ranging from footwear and garments to electronics, have been integrating vertically in
the supply chains. Starosta (2010) focuses on the rise of ‘highly concentrated global
contractors’ in the electronics industry, in which they serve multiple brand-name ﬁrms
in different product markets. Not only production tasks, but also inventory manage-
ment, are being increasingly undertaken by strategic factories, resulting in ever
stronger mutually dependent relations between buyers and suppliers. Giant manufac-
turers, rather than smaller workshops, are more able to ‘respond to shortening product
cycles and increasing product complexity’ (Starosta, 2010: 546). Nevertheless, Yue
Yuen, the world’s largest footwear producer, could only ‘pass on less than a third of the
cost increase to its customers’, including Nike, when ‘costs rose sharply’ (Appelbaum,
2008: 74). Hard bargaining by big buyers over costs and proﬁts has kept a tight rein
over producers, frequently slashing proﬁt margins.
In global outsourcing, electronics suppliers are compelled to compete against each
other to meet rigorous speciﬁcations of price, product quality and time-to-market,
generating wage pressure as well as health and safety hazards at the factory level while
shaving proﬁt margins (Smith et al., 2006; Chen, 2011). Brown (2010) argues that ‘con-
tractor factories’ are often not provided with any ﬁnancial support for corporate
responsibility programmes required by brands; ‘instead they face slashed proﬁt
margins and additional costs that can be made up only by further squeezing their own
labor force’. High-tech commodity producers therefore ‘focus their labor concerns on
cost, availability, quality, and controllability’ to enhance proﬁtability in the export
market (McKay, 2006: 42, italics original).
Workers’ adaptation, or resistance, to capitalist control has to be understood in this
new context of global production, in which concentration of capital at the country,
sectoral and/or ﬁrm level has reconﬁgured the class and labour politics. In her longi-
tudinal survey of world labour movements since 1870, Silver (2003) documents the rise
of new working class forces in sites of capital investment for the automobile industry
in the twentieth century. She deﬁnes ‘workplace bargaining power’ as the power that
‘accrues to workers who are enmeshed in tightly integrated production processes,
where a localised work stoppage in a key node can cause disruptions on a much wider
scale than the stoppage itself’ (Wright, 2000; Silver, 2003: 13). As a recent example,
Butollo and ten Brink (2012) and Hui and Chan (2012) reported the factory-wide strike
at an auto parts supplier in Nanhai, Guangdong, which paralysed Honda’s entire
supply chain in South China, resulting in wage hikes and increased worker participa-
tion in trade union elections. Periodic and limited worker victories aside, managerial
assault and/or state repression of labour protests are still commonplace.
A neoliberal state collaborates with private entrepreneurial elites by providing
infrastructural support and ensuring law and order, thereby facilitating capital accu-
mulation and economic growth. In China’s capitalist transformation, on the one hand,
the state has stimulated employment and industrial development through large-scale
ﬁnancial investment and favourable policy implementation (Hung, 2009; Chu, 2010;
© 2013 John Wiley & Sons Ltd102 New Technology, Work and Employment
Naughton, 2010). On the other hand, it has severely restricted workers’ self-
organisation capacity and fragmented labour and citizenship rights among worker
subgroups, despite ongoing pro-labour legal reforms (Solinger, 1999; 2009; Perry, 2002;
Lee, 2007; 2010; Pun et al., 2010; Selden and Perry, 2010). In our sociological research,
we explore the dialectics of domination and labour resistance within the political
economy of global electronics production.
Global production and a new working class: Japan,
China, East Asia
Between 1990 and 2006, the expansion of intra-Asia trade accounted for about 40
percent of the total increase in world trade (Arrighi, 2009: 22). China’s growing domi-
nance has reshaped regional production networks previously dominated by Japan and
its former colonies Taiwan and South Korea. The rise of Japan and East Asian capitalism
in the 1950s and 1960s was integral to the Cold War geopolitical order. To contain the
spread of Communism and consolidate its global economic reach, the United States
provided military and economic resources to its ‘client states’, encouraged Taiwan and
South Korea to open up their markets to Japanese trade and investment, and fostered
the growth of a regional power centreed on Japan’s export-oriented industrialisation
(Evans, 1995: 47–60; Selden, 1997). Japanese ﬁrms received subsidised loans to create
new industries and exported ﬁnished products to Western markets. In the 1960s,
Toshiba, Hitachi, Panasonic, Sanyo, Ricoh, Mitsubishi, Casio and others moved to
Taiwan to start operations (Hamilton and Kao, 2011: 191–193). Similarly, Japanese
trading companies began sourcing garments and footwear from Taiwan, South Korea
and Hong Kong.
From the mid-1960s, IBM, the leader in business computing, shifted its labour-
intensive production from the United States and Europe to Asia in order to cut costs.
The microelectronics components of IBM System 360 computers were assembled by
workers in Japan and then Taiwan because ‘the cost of labour there was so low’ that it
was cheaper than automated production in New York (Ernst, 1997: 40). RCA, the
consumer electronics giant, swiftly moved to ‘take advantage of Taiwan’s cheap labour
and loose regulatory environment’ in the export-processing zones in the late 1960s (Ku,
2006; Ross, 2006: 243–244; Chen, 2011). Electronics assembly grew rapidly in Taiwan,
South Korea, Singapore and Hong Kong (‘the Asian Tigers’), and later Malaysia,
Thailand, Indonesia and India. In the early 1970s, the Philippines hosted manufactur-
ing plants for semiconductor ﬁrms such as Intel and Texas Instruments. In these newly
industrialising countries, most factory workers were young women migrants from the
countryside (Ong,  2010; Deyo, 1989; Koo, 2001; McKay, 2006).
In the late 1970s, China set up special economic zones to attract foreign capital and
boost exports as the means to integrate regional and global economies. The inﬂow of
overseas Chinese capital has long been signiﬁcant, combined with growing capital
from Japan, the United States, Europe and other countries since the early 1990s (Huang,
2003). Hong Kong and Taiwanese entrepreneurs, ranging from low-end component
processing to sophisticated microchip assembly, invested in the Pearl River Delta and
the Greater Shanghai region (Leng, 2005). By the mid-1990s, Beijing’s Zhongguancun
Science Park and Shanghai’s Zhangjiang Hi-Tech Park became prominent technology
powerhouses, building on foundations of industrial development and local govern-
ment support (Segal, 2003; Zhou, 2008). Over two decades, the Chinese national
economy underwent a transformation from one based on heavy industry, with guar-
anteed lifetime employment and generous welfare for urban state sector workers, to
one that mainly relies on foreign and private investments and massive use of rural
migrant labourers in light of export-oriented industries (Friedman and Lee, 2010;
Kuruvilla et al., 2011).
Foxconn became China’s leading exporter in 2001 following the country’s accession
to the World Trade Organization and further liberalisation of international trade. It has
maintained this position ever since (Foxconn Technology Group, 2009: 6). Foxconn’s
© 2013 John Wiley & Sons Ltd Politics of global production 103
expansion is intertwined with the Chinese state’s development through market
reforms, and it has followed the national trajectory from coastal to inland locations in
recent years. The Chinese state attempted to rebalance the economy by initiating the ‘go
west’ project, through which ﬁnancial capital and human resources were channelled to
central and western provinces (Goodman, 2004; McNally, 2004). Taking advantage of
lower wage levels, the strategy was designed to stimulate employment and promote
ethnic unity while obtaining foreign investment. Ross (2006: 218) concludes that in
Chengdu, Sichuan’s provincial city, ‘it was impossible not to come across evidence of
the state’s hand in the fostering of high-tech industry’.
The creation of a new industrial class by domestic and transnational capital, under
the auspices of the Chinese state at all levels, has paradoxically led to growing protest,
driven by multiple factors. Compared with older workers, this generation of employees
born since the 1980s has strong expectations of higher wages, better working conditions
and prospects for career advancement (Pun and Lu, 2010). From the mid-2000s, labour
shortages2have driven up wages and strengthened workers’ power in the market,
although wage gains resulting from higher state minimum wage levels and strike
victories have been undermined by inﬂation (Selden and Wu, 2011). Foxconn, not
unlike other foreign-invested factories, adjusts basic wages and recruits mostly teens
and young adults to run the assembly lines. ‘Over 85 percent of Foxconn’s employees
are rural migrant workers between 16 and 29 years old’, according to a senior human
resources manager in Shenzhen (Interview, 14 October 2011). By comparison, 2009
national data showed that 42 percent of rural migrants were between 16 and 25 years
old and another 20 percent were between 26 and 30 (China’s National Bureau of
In recent years, Foxconn has adapted to local labour market changes to employ more
male than female workers as fewer young women become available,3reversing the
historical pattern of a feminised workforce in electronics. Company statistics show that
male employees increased from 59 to 64 percent between 2009 and 2011 (Foxconn
Technology Group, 2012e: 12). This labour is employed in a production network in
which vertical integration, ﬂexible coordination across different facilities and 24-hour
continuous assembly bolster its market competitiveness. It manufactures hardware
components and assembles for a very large number of global companies, with Apple
being its largest client (Chan, 2013).
The Apple–Foxconn business relationship
Apple, Foxconn and China’s workers are stakeholders in high-tech production, but
relations between them are highly unequal. Apple Computer (later Apple Inc.) was
incorporated in 1977 and is headquartered in Cupertino, California in Silicon Valley.
From the early years, it outsourced most component processing, assembly and pack-
aging to contractors. In 1981, Apple, which had initially produced its own computers,
started to contract offshore facilities in Singapore, along with onshore ﬁnal-assembly
contractors, to ramp up upgraded Apple II personal computers (Ernst, 1997: 49–52). In
1982 Apple Computer President Mike Scott commented: ‘Our business was designing,
educating and marketing. I thought that Apple should do the least amount of work that
it could and . . . let the subcontractors have the problems’ (Ernst, 1997: 49). In the 1990s,
Apple, Lucent, Nortel, Alcatel and Ericsson ‘sold off most, if not all, of their in-house
manufacturing capacity—both at home and abroad—to a cadre of large and highly
capable US-based contract manufacturers, including Solectron, Flextronics, Jabil
Circuit, Celestica, and Sanmina-SCI’ (Sturgeon et al., 2011: 236). Today, Apple retains its
only Macintosh computer manufacturing complex in Cork, Ireland (Apple, 2013a).
If Apple’s competitive advantage lies in the combination of corporate leadership,
technological innovation, design and marketing (Lashinsky, 2012), its ﬁnancial success
is inseparable from its globally dispersed network of efﬁcient suppliers based mainly in
Asia. Pivotal to Apple’s growth is effective management of production by its suppliers,
including ﬁnal assemblers. Apple’s 2012 annual report ﬁled to the United States Secu-
rities and Exchange Commission describes a challenge to its highly proﬁtable business:
© 2013 John Wiley & Sons Ltd104 New Technology, Work and Employment
Substantially all of the Company’s hardware products are manufactured by outsourcing partners
that are located primarily in Asia. A signiﬁcant concentration of this manufacturing is currently
performed by a small number of outsourcing partners, often in single locations. Certain of these
outsourcing partners are the sole-sourced suppliers of components and manufacturers for many of
the Company’s products (Apple, 2012a: 7).
Apple identiﬁes the concentration of its manufacturing base ‘in single locations’ and
in the hands of ‘a small number of outsourcing partners’ as a potential risk. However,
analysts observed that, ‘because of its volume’—and its ruthlessness—‘Apple gets big
discounts on parts, manufacturing capacity, and air freight’ (Satariano and Burrows,
2011). Group interviews with two mid-level production managers at Foxconn’s
Shenzhen industrial town reveal that during the 2008–09 global ﬁnancial crisis,
Foxconn cut prices on components, such as connectors and printed circuit boards, and assembly, to
retain high-volume orders. Margins were cut. But the rock bottom line was kept, that is, Foxconn did
not report a loss on the iPhone contract. [How?] By charging a premium on customized engineering
service and quality assurance. The upgrading of the iPhones has in part relied on our senior product
engineers’ research analyses and constructive suggestions (Interviews, 10 November 2011; 19
In 2009, in the wake of recession, the Chinese government froze the minimum wage
across the country. Foxconn accommodated Apple’s and other corporate buyers’
squeeze while continuing to reduce labour expenditures, including cuts in wages
(mainly overtime premiums) and beneﬁts (Interview, 9 November 2011).
Foxconn’s operating margins—the proportion of revenues remaining after paying
operating costs such as wages, raw materials and administrative expenses—has
declined steadily over the past six years, from 3.7 percent in the ﬁrst quarter of 2007 to
a mere 1.5 percent in the third quarter of 2012, even as total revenues rose in the same
period with the expansion of orders (Figure 1).4By contrast, Apple’s operating margins
peaked at 39.3 percent in early 2012 from initial levels of 18.7 percent in 2007. The
changes indicate Apple’s increased ability to pressure Foxconn to accept lower margins
while acceding to Apple’s demands for technical changes and large orders. Foxconn’s
margins are constantly squeezed by technology giants including, but not limited to,
Apple. As Foxconn has been expanding its plants in interior China (and other coun-
tries), expansion costs and rising wages have further impacted revenues.
Twelve major business groups within Foxconn compete on ‘speed, quality, engineer-
ing service, efﬁciency and added value’ to maximise proﬁts (Foxconn Technology
Group, 2009: 8). ‘Two “Apple business groups,” iDPBG [integrated Digital Product
Business Group] and iDSBG [innovation Digital System Business Group], are rising
stars in these past few years’, stated a Foxconn Chengdu production manager,
iDPBG was established in 2002. At the beginning, it was only a small business group handling
Apple’s contracts. We assembled Macs and shipped them to Apple retail stores in the United States
and elsewhere. Later we had more orders of Macs and iPods from Apple. In 2007, we began to
assemble the ﬁrst-generation iPhone. From 2010, we also packed iPads, at the Shenzhen and new
Chengdu facilities (Interview, 6 March 2011).
iDPBG currently generates 20 to 25 percent of Foxconn’s business. To increase its
competitiveness, Foxconn Founder and CEO Terry Gou established iDSBG in 2010 when
the company won the iPad contracts. iDSBG now primarily manufactures Macs and
iPads, contributing 15 to 20 percent of company revenues. ‘Approximately 40 percent of
Foxconn revenues are from Apple, its biggest client’ (Interview, 10 March 2011).
Dedrick and Kraemer (2011: 303) ﬁnd that computer companies currently ‘engage in
long-term relationships’ with their main contractors but sometimes shift contracts to
those who can offer better quality, lower cost or greater capabilities. Foxconn’s vice
president Cheng Tianzong told journalists, ‘Some major clients are very concerned
with the Foxconn employee suicides, but many of them are our long-term partners. So
it doesn’t affect Foxconn’s orders’ (quoted in Zhao, 2010). However, soon after the
spate of suicides at Foxconn’s facilities in spring 2010, Apple did ‘shift some iPhone and
iPad orders to Pegatron to diversify risks’, according to a Foxconn commodity manager
at Chengdu’s factory (Interview, 13 March 2011). Apple has tightened controls over
© 2013 John Wiley & Sons Ltd Politics of global production 105
Foxconn by splitting contracts with Taiwanese-owned Pegatron. This diversiﬁcation
demonstrates the power asymmetries between Apple and its manufacturers as
Foxconn and others seek to retain market position as producers of the iPhone and iPad.
Apple (2013b) obtains products and services ‘within tight timeframes’ and ‘at a cost
that represents the best possible value’ to its customers and shareholders. Figure 2
shows the breakdown of value for the iPhone between Apple and its suppliers. Apple’s
strength is well illustrated by its ability to capture an extraordinary 58.5 percent of the
value of the iPhone despite the fact that manufacture of the product is entirely
outsourced. Particularly notable is that labour costs in China account for the smallest
share, only 1.8 percent or nearly US$10, of the US$549 retail price of the iPhone. This
ineluctable drive to reduce costs and maximise proﬁts is the source of the pressure
placed on Chinese workers employed by Foxconn, many of them producing signature
Apple products. While Apple and Foxconn together squeeze Chinese workers and
demand 12-hour working days to meet demand, the costs of Chinese labour in pro-
cessing and assembly are virtually invisible in the larger success of Apple’s balance
sheets. Other major component providers (such as Samsung and LG) captured slightly
over 14 percent of the value of the iPhone. The cost of raw materials was just over
one-ﬁfth of the total value (21.9 percent).
Representatives from Apple and other major clients regularly monitor onsite quality
processes and production time to market. A mid-level Foxconn production manager
recalled: ‘Since 2007, Apple has dispatched engineering managers to work at Foxconn’s
Longhua and Guanlan factories in Shenzhen to oversee our product development and
Source: From Q1 2007 to Q3 2011, see Bloomberg (2012); From Q4 2011 to Q3 2012,
see Wikinvest (2013) for Apple; From Q4 2011 to Q3 2012, see Foxconn Technology
Group (2012a; 2012b; 2012c; 2012d).
Figure 1: Operating margins: Apple and Foxconn compared, 2007–2012*
*Data from January 2007 to September 2012 were non-consolidated results for Foxconn.
Starting from Q4 2012, Foxconn announced consolidated results.
© 2013 John Wiley & Sons Ltd106 New Technology, Work and Employment
assembly work’ (Interview, 29 November 2011). A Foxconn human resources manager
provided this eyewitness account of Apple’s hands-on supervision:
When Apple CEO Steve Jobs decided to revamp the screen to strengthen the glass on iPhone four
weeks before it was scheduled to shelf in stores in June 2007, it required an assembly overhaul and
production speedup in the Longhua facility in Shenzhen. Naturally, Apple’s supplier code on
worker safety and workplace standards and China’s labour laws are all put aside. In July 2009, this
produced a suicide. When Sun Danyong, 25 years old, was held responsible for losing one of the
iPhone 4 prototypes, he jumped from the 12th ﬂoor to his death. Not only the short delivery
deadline but also Apple’s secretive culture and business approach, centered on creating great
surprise in the market and thereby adding sales value to its products, have sent extreme pressure all
the way down to its Chinese suppliers and workers (Interview, 7 March 2011).
Attention to procurement and production detail, including last-minute changes of
product design and tight control over prices, assures super-proﬁts for Apple through
outsourcing. The purchasing and marketing policy adopted by Apple, the ‘chain driver’,
conﬂicts directly with its own supply-chain labour standards and the Chinese law.
Tracking demand worldwide, Apple adjusts production forecasts on a daily basis. As
Apple CEO Tim Cook puts it, ‘Nobody wants to buy sour milk’ (quoted in Satariano
and Burrows, 2011); ‘Inventory…isfundamentally evil. You want to manage it like
you’re in the dairy business: if it gets past its freshness date, you have a problem’
(quoted in Lashinsky, 2012: 95). Streamlining the global supply chain on the principle
of market efﬁciency and ‘competition against time’ is Apple’s goal.
Consequently, excessive overtime at ﬁnal-assemblers and other suppliers is required
to meet increased work schedules. Two major sources of production-time pressure
commonly felt by factory and logistic workers are well documented by Apple.
The Company has historically experienced higher net sales in its ﬁrst ﬁscal quarter [from September
to December] compared to other quarters in its ﬁscal year due in part to holiday seasonal demand.
Actual and anticipated timing of new product introductions by the Company can also signiﬁcantly
impact the level of net sales experienced by the Company in any particular quarter (Apple, 2012a: 8).
In a rare moment of truth, Foxconn CEO’s Special Assistant Louis Woo, explained in
an April 2012 American media program the production pressures that Apple or Dell
Source: Adapted from Kraemer et al. (2011: 5).
Figure 2: Distribution of value for the iPhone, 2011
© 2013 John Wiley & Sons Ltd Politics of global production 107
The overtime problem—when a company like Apple or Dell needs to ramp up production by 20
percent for a new product launch, Foxconn has two choices: hire more workers or give the workers
you already have more hours. When demand is very high, it’s very difﬁcult to suddenly hire 20
percent more people. Especially when you have a million workers—that would mean hiring 200,000
people at once (quoted in Marketplace, 2012).
The dominance of giant technology ﬁrms, notably Apple, in terms of price setting,
onsite production process surveillance, and timing of product delivery, has profound
consequences on labour processes. Foxconn’s competitive advantage, the basis for
securing contracts with Apple and other brand-name multinationals, hinges on its
ability to maintain ﬂexibility. The mega factory has to reorganise its production lines,
stafﬁng and logistics in a very short time to be demand-responsive. Whereas transna-
tional suppliers, such as Foxconn, have grown rapidly through ‘internal development
and acquisition’ (Sturgeon et al., 2011: 235), their drive for proﬁts and higher positions
along the global value chains tend to go with the same pattern: the emergence of
powerful ‘market makers’, or leading ﬁrms, in their supply networks (Hamilton et al.,
2011). The results in competitive manufacturing have been coercive factory conditions
and, contentious labour relations, on the ground, to which we now turn.
Chinese workers’ collective actions
Foxconn not only has factory complexes in Shenzhen and all of the four major Chinese
municipalities of Beijing, Shanghai, Tianjin and Chongqing, but also in 15 provinces
throughout the country (Figure 3). Foxconn Taiyuan in north China’s Shanxi province,
with 80,000 workers, specialises in metal processing and assembly. It manufactures
iPhone casings and other components in the upstream supply chain and sends the
semi-ﬁnished products to a larger Foxconn Zhengzhou complex in adjacent Henan
province for ﬁnal assembly. In 2012, the subtle shift in production requirements from
iPhone 4S to iPhone 5 and the speedup to meet Apple’s delivery time placed workers
under intense pressure. However, this tightly integrated production regime simulta-
neously provided workers with leverage, enabling them to demonstrate their collective
strength in the ﬁght for their own interests.
Foxconn Taiyuan erupted in factory-wide protests on September 23–24, 2012. ‘At
about 11 p.m. on 23 September 2012’, a 20-year-old worker reported, ‘a number of
security ofﬁcers severely beat two workers for failing to show their staff IDs. They
kicked them until they fell’ (Interview, 26 September 2012). At the male dormitory,
workers passing by were alerted by screams in the darkness. An eyewitness said, ‘We
cursed the security ofﬁcers and demanded that they stop. There were more than thirty
of us so they ran away’ (Interview, 27 September 2012).
Soon after a squad of ﬁfty company security ofﬁcers marched to the dormitory,
infuriating the assembled workers. At midnight, tens of thousands of workers smashed
security ofﬁces, production facilities, shuttle buses, motorbikes, cars, shops and can-
teens in the factory complex. Others broke windows, demolished company fences and
pillaged factory supermarkets and convenience stores. Workers also overturned police
cars and set them ablaze. The company security chief used a patrol car public address
system to order the workers to end their ‘illegal activities’. The situation was getting out
of control as more workers joined the roaring crowd.
By around 3 a.m., senior government ofﬁcials, riot police ofﬁcers, special security
forces and medical staff were stationed at the factory. Workers used their cell phones to
send images to local media outlets in real time. Over the next two hours, the police
contained the labour unrest, detained the most deﬁant workers and took control of the
factory gates. The factory announced a special day off for all production workers, on
September 24, Monday. A 21-year-old worker recalled:
We demanded higher pay and better treatment. In my view, the protest was caused by very
unsatisfactory working conditions. It was merely sparked by the abuses of the security guards. Over
these past two months, we couldn’t even get paid leave when we were sick (Interview, 28 September
© 2013 John Wiley & Sons Ltd108 New Technology, Work and Employment
With global consumer demand for the new iPhone 5 at a peak, shipping delays were
a source of concern for Apple. On September 21, 2012 (eight months after iPhone 4S’s
China release), Apple launched the iPhone 5 and sold over ﬁve million units during
that weekend. CEO Tim Cook stated, ‘we are working hard to get an iPhone 5 into the
hands of every customer who wants one as quickly as possible’ (Apple, 2012b). The
ever-tightening shorter production cycle pressurises workers and managerial staff, so
that Foxconn Taiyuan workers could not even take one day off in a week, and the sick
were compelled to continue to work.
As justiﬁcation for its use of paramilitary force, Foxconn blamed the workers, alleg-
ing that they were ﬁghting among themselves. The company statement read:
A personal dispute between several employees escalated into an incident involving some 2,000
workers. The cause of this dispute is under investigation by local authorities and we are working
closely with them in this process, but it appears not to have been work-related (quoted in Nunns,
The underlying cause was that workers are subjected to an oppressive management
regime driving them to meet the extreme production demands (Ruggie, 2012).
Foxconn, Apple and many other multinational corporations, as well as the Chinese
Source: Foxconn Technology Group (2013a).
Figure 3: Foxconn locations in greater China
© 2013 John Wiley & Sons Ltd Politics of global production 109
government, have thus far shown little interest in understanding the direct relationship
between companies’ purchasing practices and labour problems in the workplace. ‘On
the factory ﬂoor’, an 18-year-old worker informed us, ‘the metal-processing section
supervisor’s attitude is very bad…We’re coerced to meet the extremely tight produc-
tion deadline’ (Interview, 29 September 2012). Foxconn leaders’ investigation of the
‘personal dispute’ necessitated turning their eyes away from shop ﬂoor conditions.
Less than two weeks later, on October 5, 2012, over 3,000 Foxconn Zhengzhou
workers protested collectively against unreasonably strict control over product quality
on the line at Zone K. From late September to early October 2012, consumers in the
United States and elsewhere complained about scratches on the casing of a particular
batch of the new iPhone 5, leading to product quality control investigations of ﬁnal
assembly at the 160,000-strong Foxconn Zhengzhou plant. According to testimony, new
quality standards for not exceeding a 0.02 mm appearance defect in iPhone 5 were
contributing to workers suffering eye strain and headache. When workers were penal-
ised for not meeting the new standards, quarrels erupted between workers and quality
control team leaders on Friday afternoon, resulting in group ﬁghting and injuries.
Production managers yelled at the assembly-line workers and threatened to ﬁre them
if they did not ‘cooperate and concentrate at work’. Li Meixia (a pseudonym) posted
on her Sina microblog that she and her co-workers were angered and walked out of
the workshop. In response, another worker posted a statement, which was quickly
removed by October 6:
We had no holidays during the National Day celebrations and now we’re forced to ﬁx the defective
products. The new requirement of a precision level [of iPhone 5 screen structure] measured in
two-hundredths of a millimeter cannot be detected by human eyes. We use microscopes to check the
product appearance. It’s impossibly strict.
In the case-manufacturing process, workers were also instructed to use protective
cases to prevent scratches of the ultra-thin iPhone 5, and close attention to the most
minute detail at the fast pace was and remains a major source of work stress, according
to testimony. The strike at one workshop eventually paralysed dozens of production
lines in Zones K and L. Senior managers threatened to ﬁre the leading strikers and the
quality control team leaders, and demanded that night-shift workers adhere to strin-
gent quality standards. The brief strike did not win workers’ demand for reasonable
Given the nature of company unions (Traub-Merz, 2012) and strict corporate controls
over workers in both plant and dormitory, Foxconn workers at the Taiyuan and Zheng-
zhou factories have not organised across factories on a large scale in a coordinated
manner. However, workers were acquiring public communication skills and raising
their consciousness about the need for joint struggle to achieve basic rights. Soon after
the September 2012 protest, a 21-year-old high-school graduate with two years work
experience at Foxconn Taiyuan wrote an open letter to Foxconn CEO Terry Gou and
circulated it on weblogs (the following excerpt is translated by the authors):
A Letter to Foxconn CEO, Terry Gou
If you don’t wish to again be loudly woken at night from deep sleep,
If you don’t wish to constantly rush about again by airplane,
If you don’t wish to again be investigated by the Fair Labor Association,
If you don’t wish your company to again be called by people a sweatshop,
Please use the last bit of a humanitarian eye to observe us.
Please allow us the last bit of human self-esteem.
Don’t let your hired rufﬁans hunt for our bodies and belongings,
Don’t let your hired rufﬁans harass female workers,
Don’t let your lackeys take every worker for the enemy,
Don’t arbitrarily berate or, worse, beat workers for one little error.
In the densely populated factory-cum-dormitory setting, many rural migrant workers
as young as 16 or 17 years old, spoke of their involvement in collective labour protests
(Pun and Chan, 2013). If the language of strikes and worker participation is new for
some, it is not for others. The testimony of a teenage female worker at Foxconn’s
Shenzhen Longhua plant is illustrative:
© 2013 John Wiley & Sons Ltd110 New Technology, Work and Employment
I didn’t know that it was a strike. One day my co-workers stopped work, ran out of the workshop
and assembled on the grounds. I followed them. They had disputes over the under-reporting of
overtime hours and the resulting underpayment of overtime wages. After half a day, the human
resources managers agreed to look into the problems and promised to pay the back wages if there
was a company mistake. At night, in the dormitory, our ‘big sister’ explained to me that I had
participated in a strike (Interview, 15 October 2011)!
The wildcat strikes and labour protests at Foxconn form part of a broader spectrum of
labour action throughout China over recent decades (Pringle, 2013). The Taiyuan wor-
ker’s open letter to Foxconn CEO Terry Gou closes with the following paragraph:
You should understand that working in your factories,
workers live on the lowest level of Chinese society,
tolerating the highest work intensity,
earning the lowest pay,
accepting the strictest regulation,
and enduring discrimination everywhere.
Even though you are my boss, and I am a worker:
I have the right to speak to you on an equal footing.
The sense in which ‘right’ is used is not narrowly conﬁned to that of legal right. Chinese
workers are demanding to bargain with their employers ‘on an equal footing’. They are
calling for digniﬁed treatment and respect at work.
Marx and Engels ( 2002: 223) analysed capital’s irresistible impulse to create new
markets globally. ‘All old-established national industries have been destroyed or are
daily being destroyed. They are dislodged by new industries…In place of the old
wants, satisﬁed by the productions of the country, we ﬁnd new wants…’Production,
distribution and consumption must continue in perpetuity if proﬁts are to be made and
capital accumulated. Barriers to trade at all levels have to be drastically reduced. In the
twenty-ﬁrst century, consumer electronics has grown to become one of the leading
global industries, and Chinese labour is central to its development. An ever quicker
and newer product release, accompanied by shorter product ﬁnishing time, places new
pressures on outsourced factory workers in the Apple production network. At the
workplace level, very short delivery times imposed by Apple and other multinational
corporations make it difﬁcult for suppliers to comply with legal overtime limits. Price
pressures lead ﬁrms to compromise workers’ health and safety and the provision of a
decent living wage. The absence of fundamental labour rights within the global pro-
duction regime driven by Apple and its principal supplier Foxconn have become a
central concern for Chinese rural migrant workers, who are at the core of the most
rapidly growing sector of the new industrial working class.
The integration of Asian manufacturers in global and regional production networks,
tight delivery schedules for coveted products and the growing shortage of young
workers as a result of China’s demographic changes have enhanced workers’ bargain-
ing power. The ascent of ‘global neoliberal capitalism’ has created ‘opportunities for
counter-organization’ (Evans, 2010: 352), as attested by the rise of transnational labour
movements and global anti-sweatshop campaigns. With workers aware of the oppor-
tunities presented by the demand by Apple and other technology giants to meet quotas
for new models and holiday season purchases, they have come together at the dormi-
tory, workshop or factory level to voice demands. Internet and social networking
technology enables workers to disseminate open letters and urgent appeals for support
(Qiu, 2009). The question remains whether workers will be able to win the right to
freedom of association and ultimately strengthen a nascent labour movement that is
capable of challenging the capitalist mode of production.
A historical counterweight to global capital, West and East, exists in workers’ and
civil society’s response. Under public pressure, in February 2013, Foxconn proclaimed
that workers would hold direct elections for union representatives. If implemented
fairly, and if the unions are organised to uphold the rights enshrined in the Chinese
© 2013 John Wiley & Sons Ltd Politics of global production 111
Trade Union Law, Labour Contract Law and the international labour conventions, this
would impact upon the balance of power between management and workers. At
present, the vast labour force at Foxconn and many workplaces are striving to expand
social and economic rights, bypassing the state- and management-controlled unions. A
new generation of workers, above all rural migrant workers, is standing up to defend
their dignity and rights. Workers’ direct actions have been perceived by political
leaders and elites as so threatening to social stability that government and employers
have been forced to grant certain policy concessions and propose higher minimum
wages. The Chinese state is also seeking to raise domestic consumption and hence
living standards, in part in major response to the struggle of aggrieved workers and
farmers (Hung, 2009; Carrillo and Goodman, 2012). Apple and Foxconn now ﬁnd
themselves in a limelight that challenges their corporate images and symbolic capital,
hence requiring at least lip service in support of progressive labour policy reforms. If
the new generation of Chinese workers succeeds in building autonomous unions and
worker organisations, their struggles will shape the future of labour and democracy
not only in China but throughout the world.
We are very grateful to Phil Taylor, Debra Howcroft and four reviewers for their
insightful comments. We also thank the independent University Research Group
on Foxconn, SACOM (Students and Scholars Against Corporate Misbehavior),
GoodElectronics Network, Jeffery Hermanson, Gregory Fay, Chris Smith, Jos Gamble
and Sukhdev Johal. An earlier version of this paper was presented at the Center for East
Asian Studies in the University of Bristol on November 15, 2012, where Jenny Chan
enjoyed constructive discussions with Jeffrey Henderson and the seminar’s participants.
1. Foxconn’s parent corporation is Taipei-based Hon Hai Precision Industry Company. The trade
name Foxconn alludes to the corporation’s ability to produce electronic connectors at nimble
2. Gu and Cai (2011) conclude that Chinese fertility is presently 1.6 children per woman, down
from around 2.5 children per woman in the 1980s. In the next few years the number of young
labourers aged 20 to 24 years will peak. China’s 2010 Population Census, moreover, showed
that the age group 0–14 comprised 16.6 percent of the total population, down 6.29 percent
compared with the 2000 census data.
3. The National Bureau of Statistics has acknowledged that the gender imbalance had reached
119:100 in 2009 before dipping slightly to just under 118:100 in 2010. The 2011 data reported
117.78 baby boys for every 100 girls (China Daily, 2012).
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… In China, as millions of migrant workers arrived in industrial towns and cities, the provision of collective dormitories for these workers became a necessity for firms. The arrangement of dormitories allows the fast and flexible organisation of production as well as compulsory overtime (Chan et al., 2013). At the plants in China, men and women live in separate areas and are not allowed to visit one another’s rooms; workers are barred from cooking in the name of fire safety and from washing clothes so as to save water and energy through the factory cleaning service. …
… The fact that workers in the EU as well as in China weight their opportunities in a large labour market puts these workers in a stronger bargaining position against an employer that uses labour market manipulation with the aim of recreating dependency. Therefore, as studies of GPNs have shown, a direct link exists between the demands of the lead firms in the global electronics supply chain and the methods of production and labour control (Chan et al., 2013). In other words, the heterogeneity and mobility of labour have shaped the subsidiaries’ ER practices. …
One firm, two countries, one workplace model? The case of Foxconn’s internationalisation
This article aims to provide insight into the employment relations in China-based multinational companies internationalising to Europe, a still relatively unexplored topic. We investigate the transfer of work and employment practices from Foxconn’s manufacturing headquarters in mainland China to its subsidiaries in Czechia and the factors that influence the firm’s internationalisation of production. By drawing upon original ethnographic fieldwork, the study makes a two-fold contribution. First, it shows the analytical inadequacy of the ‘latecomer’ model which assumes that the Chinese firm is an asset seeker. Second, it illustrates the relevance of diversity of labour and non-institutionalised forms of workers’ agency for theorisation of internationalisation. These topics are still insufficiently addressed by the literature that favours managerial agency and the model of distinctive and stable national labour forces. The study contributes to the theoretical debates on internationalisation by illustrating the limits of the national institutionalist perspective, the importance of considering a multi-scalar analytical framework and the relevance of labour composition in shaping multinational employment relations. JEL Codes: J61, J42, L23
… China currently possesses the largest factories ever seen. For example, The Foxconn plant which assembles all Apple’s I-Pads in Shenzhen employs around 350,000 people (see Chan, 2013;Chan, Pun, & Selden, 2013;Pun et al., 2016 andFreeman, 2018). There are many other plants in China employing more than 100,000 workers (see Ngai & Chan, 2012). …
New ways of exploring the changing nature of work: neglected themes in contemporary social stratification research
The paper assesses new ways of exploring the changing nature of work as an essential part of developing contemporary social stratification research. This combination was a key feature of the ‘classical tradition’ in economic sociology. Unfortunately, this has been lost in recent years and the paper provides examples of areas of work that urgently need greater research by sociologists ARTICLE HISTORY
… A calculation along the iPhone value chain is a well-known example of the low share of the assembler and the high share of Apple in the distribution of income along the value chain. While Apple captured an extraordinary 58.5 per cent of the price of an iPhone; component suppliers received only 14.3 per cent, while the Chinese firm assembling the iPhone secured just 1.8 per cent of the value chain’s income (Chan, Pun and Selden, 2016). …
Knowledge, Oligopoly and Labour in Global Value Chains
The article explores knowledge in global value chains (GVCs) and its correspondence with the nature of employment in different GVC segments. It starts with the role of knowledge that is protected through intellectual property rights in creating oligopolies in product markets, which are then re-created as oligopolies in the input markets. Knowledge requirements, transmitted through governance relations and the distribution of power within GVCs, lead to the inter-firm distribution of profits within GVCs, and result in differing qualities of employment corresponding to the level of knowledge required in different production segments.
… Counterposing migrant workers as active subjects, many scholars (e.g. Andrijašević and Sacchetto 2016;Kalleberg 2009;Thompson et al. 2013) also highlight the vertical and spatial mobility of workers, making them active and not passive agents (see also Chan, Pun and Selden 2013). While vulnerability, for Pollert and Charlwood (2009), is also key, Kalleberg (2009) and Anderson (2010), among many others, use precarious work or precariousness in order to grasp the institutional insecurity of the unstable and atypical employment that is also common among migrant workers. …
Snakes or Ladders? Job Quality Assessment among Temp Workers from Ukraine in Hungarian Electronics
… While Foxconn continues to serve other buyers, Apple remains its dominant client, accounting for a substantial proportion of its operations. For instance, in 2011 it was estimated that approximately 40% of Foxconn’s revenue came from Applefocused business (Chan, Pun, & Selden, 2013). This client concentration was not unilateral. …
Between a rock and a hard place: a critique of economic upgrading in global value chains
Researchers have tried to understand how insertion into global value chains (GVCs) can lead to economic upgrading for the developing country firms (DCFs) involved. Many of these studies operationalize upgrading as a DCF’s movement into higher value‐added activities, where the creation and appropriation of value‐added are assumed to be symbiotic. In doing so, they divorce economic upgrading from its effect on inter‐firm bargaining power. We address this core assumption by introducing insights from theories on power‐dependence relations. We argue that pursuing an economic upgrading trajectory can be positioned a necessary but insufficient condition for DCF value‐added appropriation. In so doing, we theoretically explicate the conditions under which an economic upgrading trajectory is likely to result in DCF value‐added capture. MANAGERIAL SUMMARY The fragmentation and dispersion of the multinational enterprises’ (MNE) value‐adding activities allows developing countries firms (DCFs) to insert themselves in the MNEs’ value chain. Within both academic and policy spheres, DCFs are encouraged to participate in GVCs as it allows for knowledge and resource transfers from the MNE (upgrading opportunities). In this paper, we offer a critique on this notion of economic upgrading. We argue that researchers have focused on the benefits that new or improved value chain activities can bring, but have largely ignored how these benefits are shared between the chain participants OR members. We address this assumption by introducing power‐dependence and bargaining power to explicate the conditions under which an economic upgrading trajectory can positively influence the DCF’s value‐added appropriation. This article is protected by copyright. All rights reserved.
… Subsequently, Apple -following the common practice of pitting suppliers against each other to maximize profit -shifted some of its production to Pegatron, another Taiwan-owned supplier, where labor costs are allegedly even lower. 3 By 2016 when the iPhone 7 was launched, Apple had maintained and even increased its grip on iPhone profits, despite intense competition from Samsung, Huawei and Xiaomi. Apple captured …
Jenny Chan. 2020. “Labor Practices in Apple’s Supply Chains in China.” Pp. 266-71 in Case Studies in Work, Employment and Human Resource Management, edited by Tony Dundon and Adrian Wilkinson. Cheltenham, UK: Edward Elgar Publishing.
… Because employment contracts and other interactions with stakeholders can be regarded as incomplete contracts, corporations often lay claim to additional (i.e., residual) decision making authority directed to the unspecified aspects of business operation (Simon 1951;cited in Hsieh 2008). Having identified voids in government regulation for residual decision making authority (e.g., Chan et al. 2013;Lüthje and Butollo 2017), are corporations to ignore that advantage in deliberations? To the extent that corporate self-regulatory efforts are an indicator, there is little appetite to empower workers or make changes to policies that reduce managerial discretion (see Bartley and Egels-Zandén 2015;David et al. 2007). …
An Agonistic Notion of Political CSR: Melding Activism and Deliberation
Flagging labor governance in far-flung supply networks has prompted greater scrutiny of instrumental CSR and calls for models that are tethered more closely to accountability, constraint, and oversight. Political CSR is an apt response, but this paper seeks to buttress its deliberative moorings by arguing that the agonist notion of ‘domesticated conflict’ provides a necessary foundation for substantive deliberation. Because deliberation is more viable and effective when coupled with some means of coercion, a concept of CSR solely premised on reciprocal corporate-stakeholder engagement is pre-mature; efforts should first be directed toward the antecedents of reciprocity and how it is to be achieved, and only then does deliberation become a reliably substantive exercise. The resulting account of agonistic CSR is generated through agonistic principles of realism, pro-action, contestation, and countervailence, and illustrated by the Bangladesh Accord.
… Next to direct investments from Hong Kong, indirect investments via Hong Kong and Taiwan also played an important role in Shenzhen’s industrialization in the 1980s and 1990s. This included Taiwanese companies like Foxconn, the major outsourcing partner of Apple with a notorious reputation of exploitative labour circumstances (Chan, Pun, and Selden 2013). Although Foxconn has meanwhile partly left Shenzhen (and other East China cities) and moved to other interior China locations, it still has a significant presence in Shenzhen’s outer districts. …
Shenzhen: satellite city or city of satellites?
The term ‘satellite city’ can be applied at multiple scales and with multiple meanings. In this article, the Chinese city of Shenzhen will be viewed both as a satellite city at the (mega)city-level, and as a city consisting of many sub-city satellites. In the first years after becoming China’s first Special Economic Zone, Shenzhen developed as a satellite city not only of its neighbour Hong Kong, but also of Beijing, as the first zone of experiments with ‘capitalism with socialist characteristics’. In later development stages the city has emancipated to also become a centre in its own right. At the same time, however, Shenzhen is a ‘city of satellites’, comprising many sub-centres that could also be seen as satellites themselves. After exploring Shenzhen as a whole as a satellite city of Hong Kong, Beijing and other ‘external influencers’, we will discuss three examples of different types of sub-city satellites: OCT, Shekou/Qianghai, and Guangming New Town.
Jenny Chan. 2020. “Employee Voice in China.” Pp. 524-38 in Handbook of Research on Employee Voice: Participation and Involvement in the Workplace, edited by Adrian Wilkinson, Jimmy Donaghey, Tony Dundon, and Richard B. Freeman. 2nd Edition. Cheltenham, UK: Edward Elgar Publishing.
Transnational business governance through private standards
Increasing fragmentation in the global economy has been accompanied by a rise in the use of private standards. Technical standards created by companies and standards writing organizations facilitate coordination and enable elaborate divisions of labor of the sort evident in the electronics industry. Standards are also used for control. Private standards schemes specify rules of behavior and develop mechanisms to monitor and enforce them. Schemes address issues such as product safety, environmental and social impacts, and sustainability. They are developed and adopted by many different actors and actor coalitions, including businesses, NGOs, and governments. They respond to the regulatory challenges created by global fragmentation, but also use the opportunities offered by interdependencies within global value chains to enable cross-border control over how products are produced and their social and environmental impacts. The multiplicity of actors and interests involved in standards development leads to the proliferation of standards and competition between them.
States’ gains, labor’s losses: China, France, and Mexico choose global liaisons, 19802000
In this explicitly comparative work, Dorothy J. Solinger examines the effects of global markets on the domestic politics of major states. In the late 1970s, leaders around the world faced a need both to continue productive investment and to cut labor costs to compete internationally in a changed world market. To accommodate forces seemingly beyond their control, they often opted to reduce social protections and benefits that citizens had come to expect, in the process recalibrating their established political-economic coalitions. For countries whose governance was built on a coalition between workers and the state, the political conundrum was particularly intense. States’ Gains, Labor’s Losses concentrates on three countries-China, France, and Mexico-where revolution-inspired political compacts between labor and the state had to be renegotiated. In all three cases, choices to forge a deepened dependence on international capital markets required the ruling parties to fire large numbers of workers and cut social benefits while attempting not to provoke widespread social unrest or even full-scale revolt among their supporters. China, France, and Mexico also shared strong legacies of protectionism and state intervention in the economy, so the decision of each to join a supranational economic organization (France and the EU, China and the GATT/WTO, Mexico and NAFTA) in the hope of alleviating crises of capital shortage involved submission to a new set of liberal economic rules that further compromised their sociopolitical compacts. Examining a fundamental question about the dynamics of globalization and worker protest through an innovative comparative perspective, States’ Gains, Labor’s Losses emphasizes the growing tensions and new compromises between the working class and their political leaders in the face of intense international economic pressures.
The Enigma of Capital: And the Crises of Capitalism
Introduction: Reform, Conflict and Resistance in Contemporary China
Human lives valued less than dirt: Former RCA workers contaminated by pollution fighting worldwide for justice (Taiwan)
Based on action research and in-depth interviews, this chapter reveals the Radio Corporation of America’s (RCA) illegal toxic dumping practices in Taoyuan, Taiwan. RCA’s two decades of misconduct have seriously contaminated people, soil, and groundwater in Taoyuan. When Taiwan’s Environmental Protection Agency (EPA) revealed that RCA’s Taoyuan plant had been permanently contaminated in the 1990s, 216 former RCA employees already had died of cancer. In addition, 1,059 people were suffering from various kinds of cancer and 102 others developed tumors, with the numbers increasing every year. The RCA story demonstrates how developing countries have served as sites for manufacturing and assembling plants and how the flow of international capital prioritizes capital over labor and profits from exploiting human lives. This brings into question whether RCA’s economic development model should be pursued. The former RCA workers’ struggle should be taken as a warning against the effects of international capitalism. The following story describes Mr. Bon-Tsu Liu’s family tragedy and what happened to his wife, a former material management worker at RCA. When we first met Mr. Liu in January 2001, he told researchers from the Taiwan Association for Victims of Occupational Injuries (TAVOI):1 My wife started to work in the RCA factory soon after she graduated from high school. During the 11 years of her RCA career [1979-1990], she was assigned to material management. Every day she would have to work in a closed environment, handling all sorts of disposal buckets previously used for containing plastic materials and organic solvents. She was laid off in 1990 because of the recession. She became a full-time mother. When my third daughter, Wen-Shen Liu, was about four-months old, her belly started ballooning to the size of a basketball. Later diagnosis by doctors confirmed she had hepatoblastoma. In a series of operations and chemotherapy treatments for three years, Wen-Shen became skinnier day by day and it was unbearably heart-breaking for us, but more painful for her. She died at the age of three from multiple organ failures caused by fulminant hepatitis. This marked the beginning of the great sorrows and terrible pains that will never escape us. After the death of our baby, I started to worry about my wife’s health and kept asking her to get a medical examination. She did so and unfortunately, the examination report suggested she had breast cancer at a critical stage. She had surgery immediately, hoping that all cancer cells could be completely removed. During the following three years, she was given regular chemotherapy treatments, but it was all in vain. Bone cancer had developed, and she lost her hair and physical strength. Even her muscles were totally destroyed from the side effects of chemo treatments. Every movement was a torture for her. In her last six months, she had to rely on morphine to kill the sudden pain that would strike without warning. My doctor told me that my girl might have contracted cancer cells while still in her mother’s womb, and that breast-feeding might also have come into play. It was 1995 before my wife was diagnosed with breast cancer, and it took years to develop into the critical stage. This means that my wife could have contracted cancer while she was still working for RCA. Nobody in my family or her family has ever had cancer; even her 90-year-old grandmother is still very healthy. It was during the period of time that we witnessed the takeoff of Taiwan’s economic miracle that my wife was still working. She sacrificed her most precious time of youth to a society that exploited her when she was still capable of contributing, but then totally forgot her and deemed her useless. RCA denied any negligence or wrongdoing, and said it has never made its workers use groundwater. The Council of Labor Affairs was reluctant to identify the whole situation as a vocational disaster and continued researching in order to be sure about the underlying causal relation, before it would agree to our legitimacy claim for compensations.2 Medical treatments were so expensive. Even worse, there was no National Health Insurance Program as we have now. Even now, with the Insurance Program, we still have to shoulder the full costs for drugs and treatments. People said, “The poor have no right to be sick. Even with the national health care, only the rich people have the right to be sick.” I strongly feel that I have been alienated and deserted by our society. Nobody would recognize my wife’s contribution to Taiwan’s economy. My wife and daughter’s sacrifices are totally irrelevant in today’s world.
The three transformations of global capitalism
The Asian Miracle and the Rise of Demand-Responsive Economies
In this chapter, Gary Hamilton and Cheng-shu Kao demonstrate that the industrialization of East Asia, which started in the late 1960s and which is known as the “Asian Miracle,” is most accurately seen as the widespread development of supplier markets for mostly American brand-name merchandisers and retailers. Asia’s export-driven industrialization quickly led to the development of “demand-responsive economies.” Using Taiwan as an example, the authors show, step by step and industry by industry, how, through the actions of big buyers, Asian economies in the 1970s and 1980s became organized backwards from the development of consumer markets in the USA to the creation of supplier markets for consumer goods in East Asia. Using extensive interview data from Taiwanese businesspeople, the authors present a number of case studies showing the process of economic integration (and disintegration) around the development of supplier markets. Such supply-chain-driven economies are the essence of the demandresponsive economies that emerged in East Asia in the second half of the twentieth century and that are characteristic of economies around the world today.
Market Making in the Personal Computer Industry
In this chapter, Jason Dedrick and Kenneth L. Kraemer analyze a transformation in the personal computer (PC) industry. In the traditional structure of the PC industry, PCs were marketed through a variety of channels from direct sales forces, to corporate resellers and electronic superstores. The connection between the PC manufacturer and the final consumer was weak (via advertising) or non-existent. In the mid-1990s, a major shift began in the US market toward direct sales of PCs, led by Dell Computer, which allowed PC makers better to match demand and supply. Dell Computers pioneered a new type of PC maker, which was basically as an assembler of parts made by contract manufacturers and assembled according to the consumers’ specifications. This approach cut out the distributor and retailer, putting the PC maker/brand-name merchandiser in the role of market maker. Direct sales accounted for over half of all PC sales by 2005, dominating the corporate market and augmented by the consumer acceptance of e-commerce. The direct sales model has made smaller inroads outside the USA. Currently, there are three major retail models in the US PC consumer market. The first is the traditional indirect model and the second is the PC maker as retailer. The third, which might be called the retailer as PC maker, includes the private label brands sold by some retailers, such as Wal-Mart and CompUSA, and local “white-box” makers that sell primarily to small businesses. In terms of impacts on suppliers, PC makers have adopted just-in-time practices and moved to vendor-owned inventory to reduce costs. As PC firms have focused on retailing and marketing, they have outsourced even new product development to a contingent of original design manufactures, mostly in Asia.
Global Logistics, Global Labor
In this chapter, Edna Bonacich and Gary Hamilton explain the crucial role played by logistic providers in creating the supply chains of global retailers. Goods produced in Asia and elsewhere via global sourcing must be moved to the United States in a timely manner. To meet this need a complex logistics system has developed, which includes everything from infrastructure to logistics management. Some retailers have large internal logistics management departments. Others rely on third-party companies that specialize in logistics. Global sourcing has been dependent on the simultaneous development of crucial supporting actors, including ocean shipping, railroads, trucking industry, air freight companies, and warehousing operations. A key factor has been the evolution of inter-modal transportation systems that can move containerized shipments quickly from Asia and elsewhere to points throughout the USA and Europe. In turn, these transportation providers are supported by an expensive infrastructure base, which includes ports, airports, highways, and rail lines, most requiring government involvement of some kind. Because of their tremendous volume, and concomitant power, large retailers have played a major role in shaping conditions for the logistics providers. As with the employees in factories abroad, the working conditions and wages of logistics workers are strongly affected by retailer practices, even though they are non-owning, distant actors.
Making the Global Supply Base
In this chapter, Timothy Sturgeon, John Humphrey, and Gary Gereffi analyze the co-evolutionary character of market making, in which the initial trials with global sourcing in the 1970s and 1980s by a few retailers helped spur the development of an increasingly competent group of contract manufacturers mainly located in East Asia. These contractors acquired the capabilities necessary to produce products to the specifications of leading firms in the West. Some of the early deals were made directly with Asian manufacturers, whereas others relied on Asian intermediaries (for example, trading firms) to organize and coordinate production in Asia. These early moves provided both an example and a ready-made supply base for other retailers and branded marketers not yet engaged in global sourcing. The increasing competence of these contract manufacturers also dovetailed with a trend toward outsourcing by manufacturing firms in the USA, including leading companies in technology-intensive sectors such as electronics, accelerating the creation of a global supply base of contract manufacturers. In the 1990s, as retailers and brand-name merchandisers passed more responsibility on to contract manufacturers for process development, material sourcing, and even some aspects of product design, the global supply base began to be populated by large, “full-package” contractors with a full range of capabilities. Today, the depth and breadth of the global manufacturing supply base, along with new internet-based tools for buyer- supplier matchmaking and operational coordination, may be opening a new stage in the development of global sourcing.
The changing map of global electronics: Networks of mass production in the new economy
Electronics Is one of the largest manufacturing sectors in the global economy. However, this characteristic is often obscured by the prevailing view of “high-tech” as a science-and service-based industry-an image that has been cautiously cultivated since grassroots environmental and labor activists began to expose the “dark side of the chip” (Siegel and Markoff 1985). Since then, a myriad of academic and media writers and researchers have been dealing with the postindustrial economy in high-tech centers throughout the world (e.g., Castells 1996; Gilder 1989; Negri and Hardt 2000)-mostly neglecting more problematic impacts of electronics production for the environment, workers, and working-class communities. In particular, the focus on science, service, and software distracts the public’s viewfrom the social and political situation in the often-huge production complexes in newly industrializing countries in Asia, Latin America, and Central and Eastern Europe. For an adequate understanding of the “high cost of high-tech” (Siegel and Markoff 1985), we must consider the enormous complexity of the global electronics industry and its production systems, as they have unfolded during the past two or three decades. The economics of the electronics industry is characterized by permanent and very rapid changes in technologies and industry structure, driven by an emergence of industry segments led by highly specialized newcomer firms, by a global reconcentration of technology and production resources in new markets, and by increasing separation of manufacturing from brand-name firms focusing on product development, design, and marketing. As a brief introduction into this industry structure and its economic logic, this chapter will provide some basic definitions and statistics, examine the fundamental transformation from old-style electronics manufacturing to new network-based industry models, discuss the trend toward large-scale outsourcing in electronics manufacturing, and describe some implications for the shape of the industry’s global production networks.