Vol 1 No 3 Fall 2017

After the Miracle: Labor Politics Under China’s New Normal

In the aftermath of the 2008 global financial crisis, economic restructuring has driven a chaotic process of political realignment in most of the major economies. For the working classes in the United States and Europe, revolt against the status quo has taken the competing forms of right-wing economic nationalism and a new left populism: Trump, Farage, and Le Pen on one side; Sanders, Corbyn, and Mélenchon on the other. But what about China, the new “workshop of the world”? In the combined and uneven developmental landscape of global capitalism, how are Chinese workers reacting to economic restructuring as well as the dramatic recentralization of political power around Chairman Xi?

The dominant academic, activist, and media discourse suggests an optimistic picture. Big headline-grabbing strikes in foreign-owned companies — Honda in 2010, Ohms Electronics in 2012, IBM and Yue Yuen in 2014, and Walmart in 2016 — have been interpreted as “turning points” in the emergence of a more powerful and radicalized labor movement. I argue that this narrative of worker empowerment is largely an illusion. The reaction to the 2008 crisis has certainly produced profound changes in Chinese economic management, but the “new normal” in industrial relations heralds a weakening, not a strengthening, of workers’ capacity for large-scale collective action.

From the outside, of course, it initially appeared that the massive 2008-09 economic stimulus plan ($586 billion in countercyclical spending) had enabled China to weather the global crisis with minimal damage to the economy or to the authority of the leadership. In fact, the drastic shrinkage in foreign demand after 2008, together with chronic overcapacity in key industries and a huge overhang of local government debt, marked the end of the thirty-year high-growth era and forced fundamental changes in development and governance strategies. Fearful that growing public anger over income inequality, underemployment, and official corruption could spark a “Chinese spring” with possible challenges to one-party rule, the leadership adopted a sweeping new model for growth and conflict management. Accepting that the economy has shifted to a lower gear, Xi has defied the principle of collective leadership instituted by Deng Xiaoping to concentrate power around himself and initiated a series of campaigns to “cleanse corruption” but also crack down on all forms of dissent. Simultaneously, economic policy has prioritized domestic consumption, the encouragement of mass entrepreneurship and self-employment, and the export of excess capacity to the Global South (this is the ultimate logic behind the New Silk Road).