“Race to the Bottom” or Variegated Development? Capital Mobility and Labor Politics in China’s Electronics Industry

A key debate over globalization concerns capital mobility, labor rights, and development prospects. A popular theme in the literature is that the hyper-mobility of capital from high-wage to low-wage areas in search of cheap and pliant labor has sounded the death knell for workers’ capacity for collective resistance in both Global North and Global South. In particular, it is argued that with the mobilization of China’s vast reserves of cheap labor, a “race to the bottom” in workers’ rights and welfare has been unleashed. Notwithstanding its popularity, the thesis that capital is necessarily footloose, and that capital mobility produces a straightforward race-to-the-bottom is suspect on both theoretical and empirical grounds. This paper examines how capital mobility interacts with labor politics and local development through a comparative case study of geographical relocation and expansion of three electronics multinationals from the Yangtze River Delta to West China. More specifically, the paper examines: How are firms’ relocation decisions informed by the interactions between their positions in the global value chains (GVCs) and location-sensitive labor institutions? What role do central and local governments play in firms’ relocation processes concerning labor? How does management choose to organize work and control labor? And what are workers’ responses and strategies in negotiating, accommodating, and challenging management discipline? What accounts for the differences among the plants of different locations? Drawing insights from critical labor geography and GVC analysis, the evidence suggests the importance of location-sensitive labor institutions and a dynamic process of relocation, diversification, and specialization in the global electronics industry that belies many assumptions of the race-to-the-bottom argument about capital movement and labor conditions. The findings provide important insights for workers and central and local states to formulate effective strategies to attain more sustainable investment and growth in an era of globalization and capital mobility.