ArticlePDF Available

Fierce, Fair and Unfair Competition THE EU–CHINA TRADE RACE AND ITS GENDER IMPLICATIONS

Authors:

Christa Wichterich

University of Kassel

Content uploaded by Christa Wichterich

Content may be subject to copyright.

Fierce, Fair and Unfair

Competition

THE EU–CHINA TRADE RACE AND ITS GENDER IMPLICATIONS

UPDATED VERSION

Christa Wichterich - June 2008

Fierce, Fair and Unfair Competition

The EU–China Trade Race and its Gender Implications

Author: Christa Wichterich

Produced by: WIDE,

Rue de la science 10

1000 Brussels

Belgium

www.wide-network.org

Any parts of this publication may be reproduced without permission for educational and non-profit purposes if the

source is acknowledged. WIDE would appreciate a copy of the text in which the document is used or cited.

Introduction.........................................................................................................................................1

1. Competition in a Multipolar World...........................................................................................2

1.1. China’s WTO Accession – Landmark in EU–China trade relations...............................6

1.2. Another Great Leap, Flying Geese and a Tide that Does not Lift all Boats.................6

1.3. Global Europe and Competitiveness First..........................................................................9

1.4. Development Assistance and Sustainability ..................................................................12

1.5. End of the Honeymoon?......................................................................................................14

2. Chinese Transformation and its Gender Implications.........................................................17

2.1. The Rediscovery of Gender Differences in the Market Economy ..............................19

2.2. Open Door Policies and the Making of Classes and Gender.......................................21

2.3. Discrimination against Women – Global Patterns, Local Practice.............................24

3. Social Standards and The Labour Regime in Manufacturing ...........................................28

3.1. The Case of Textiles and Clothing.....................................................................................29

3.2. Social Unrest and Disharmony..........................................................................................31

4. Conclusions .................................................................................................................................34

Literature............................................................................................................................................36

Introduction

WIDE is a European network of non-governmental development organizations, gen-

der specialist and women’s rights activists. Since 1995 one of WIDE’s core work areas

has been the gender–development–trade nexus. In the recent past it has focused on

the new generation of bilateral free trade and economic partnership agreements

launched by the European Union (EU). As outlined in the European Commission trade

strategy

Global Europe: Competing in the World

from October 2006, the EU is target-

ing large but still protected markets with these ‘competitiveness-driven’ treaties.

China tops the list of potential partners.

This report on the EU–China partnership and co-operation relations comes in a series

of political analysis of EU trade agreements with countries in the South from a gen-

der perspective. Its focus is on the trade and investment agreement rather than on

the human rights and political dialogue. It is part of an awareness-raising and advo-

cacy project on EU trade and investment policies which 1) aims to disseminate infor-

mation about the ongoing negotiations and the complex political, economic and

social dynamics on the ground, 2) tries to enhance understanding of the gender impli-

cations of trade liberalization and EU trade policies, and 3) attempts to influence trade

relations in such a way that they are consistent with social and gender justice,

women’s rights, environmental sustainability and other development objectives.

China remains to a large extent a blind spot in the gendered analysis of neoliberal

globalization. Only a few in-depth studies on women workers in export production

have been published recently. In particular, the service sector and care economies

are unknown territories which are, however, being increasingly affected by transna-

tional trade regimes. News about resistance to the restructuring of the economy and

its high social and environmental costs are hushed up. Rather than attempting to pro-

vide comprehensive information, this paper tries to hint at areas for further network-

ing of civil society organizations and gender research.

WIDE hopes that this report will contribute to a constructive dialogue between civil

society organizations and policymakers in the EU. Even more, WIDE’s advocacy work

for gender equality and global social justice vis-à-vis the EU’s trade and development

policies has a role to play in exploring opportunities to exchange knowledge, build

civil society alliances and network with China. Based on common concerns and com-

mon values, transnational democratic spaces have to be opened for voices and

resistance which link gender justice and global economic justice.

This is the revised and updated version of a paper written at the beginning of 2007.

The author wishes to thank Lanyan Chen, Anja Franck, Klaus Fritsche, Dorothy

Guerrero and Marzia Rezzin for their helpful comments on the draft.

Barbara Specht/WIDE

1. Competition in a Multipolar World

For China, hosting the 2008 Olympic Games is another milestone to establish itself as

a full member of the international community and as a global power. The first mile-

stone was its accession to the World Trade Organization (WTO).

China has emerged as a global player and powerhouse on the international trade

map; however, it is increasingly depicted as a giant economic monster. As the world’s

workshop, the country has become one of the main sites for transnational corporate

investment and one of the main exporters of manufactured goods. Its growth rates

stun its competitors; its weight in global trade scares its trade partners. Its hunger for

natural resources and raw materials has set off a global commodity boom at a high

cost for the environment. From a European point of view, its astonishing impact on

each and every sector and region of the world economy is perceived at the same time

as an economic growth model and as a threat to jobs, wealth and welfare in the EU.

Various perspectives attempt to mitigate between the two polarized perspectives on

China: the ‘human-rights-first’ perspective and the ‘economy-first’ perspective.

Against the Sino-euphoria in the past decade, the human rights violations in Tibet

have caused a new Sinophobia in the West. Additionally, anxiety is spreading that

globalization could turn into a Sinosation of the world economy.

However, the fact that during its transformation from a state-led to a market-oriented

economy China could lift millions of people out of extreme poverty is still considered

to be a showcase for trade liberalization and export-led growth benefiting the poor.

However, it is increasingly striking that the social and ecological costs of the

Manchester-capitalist accumulation system are skyrocketing, the exploitation of

human and natural resources is alarming, and social disparities are growing.

Against the backdrop of this ambivalences, the 9th EU–China

Summit in September 2006 in Helsinki decided to launch negoti-

ations on a bilateral Partnership and Co-operation Agreement

(PCA). It should be a comprehensive framework for the current-

ly three-pillared EU–China relations: 1) political dialogue (includ-

ing human rights dialogue), 2) economic, sectoral and trade rela-

tions, 3) development co-operation. It is part of the overall strat-

egy of the EU to strive for dialogue instead of confrontation, and

to formalize and legalize its relations with China and make up

ground on its main competitors, the US and Japan. However, the

centre piece of the PCA will be an update of the 1985 Trade and Economic Co-opera-

tion Agreement. It will build on two EU documents published in October 2006:

EU–China: Closer partners, growing responsibilities and the accompanying policy

“Europe must get China

right, as a threat, an

opportunity and a

prospective partner.”

Peter Mandelson,

Wolfsberg/Switzerland,

4.05.06

paper, EU–China trade and investment: Competition and Partnership. The overall tone

of both these documents mirrors mixed feelings of admiration and respect on the one

hand, anxiety and worry on the other. Their first and foremost objective is to improve

and balance trade relations by further opening up China’s markets, and by adjusting

the Chinese economy to the international standards and legal requirements of the

WTO.

Against the background of China’s transformation into a market economy, its reckless

growth path and social polarization, this paper explores the gender implications of the

Chinese trade race and EU’s push for sweeping liberalization. While these processes

were initiated by the Chinese Government’s ‘open door’ policies, since China’s WTO

accession they are increasingly driven by a complex interaction between domestic

policies, foreign trade and investment policies, and corporate interests.

1.1. China’s WTO Accession – Landmark in EU–China trade relations

The landmark event in China’s trade relations was its accession to the WTO. After 15

years of negotiations, China became a WTO member on 11 December 2001. The EU

welcomed China’s accession for three main reasons:

• The multilateral trading system of the WTO could not be complete and universal

without China;

• WTO accession would make the economic liberalization in China irreversible as it

“has to abide by the rules of the game” and to strengthen the rule of the law; and

• China should “ensure a level playing field for our industry” (Beseler, 2002:5).1

The negotiations followed a dual-track strategy of bilateral negotiations with China’s

largest trading partners and multilateral negotiations. The bilateral EU–China agree-

ment on WTO, signed in May 2000, was a waypost in the accession process. EU’s

interest focused:

• in the service sector on insurance, banking, distribution and telecommunications

(the EU is the world leader in the mobile phone sector and covers 90% of the

Chinese market);

• in manufacturing on motor vehicles, machinery and chemicals; and

• in agriculture on wine, spirits, butter and pasta, as well as on sanitary and phy-

tosanitary measures.

Before the WTO accession, the percentage of European-owned companies in China

Hans-Friedrich Beseler, former Director-General of Trade of the European Commission, served as Chief

of the China Negotiating Team until May 2000.

was only 14 per cent of all foreign-funded companies. China’s attractiveness for EU-

based companies mainly consists of a) the extended low-cost assembly line or – as

Deutsche Bank says –

“Fierce global competition is literally forcing international pro-

ducers to exploit China’s low wage costs”

and b) the Chinese market of potentially 1.3

billion consumers or

“WTO membership now enables foreign companies to benefit

from China’s vast appetite for foreign products”

(Deutsche Bank Research, 2004).

Foreign investors are allowed to take their profits out of the country.

China’s interest in continuous foreign investment is threefold:

• expansion of its export production and access to foreign markets;

• import of know-how and technology (in particular from EU-based corporations);

and

• job opportunities for its surplus, low-skilled or retrenched labour.

China’s WTO commitments secured better access for EU firms, a more attractive and

‘predictable’ environment for investments by EU companies, and a reduction of import

tariffs. It agreed to open key service sectors such as insurance, banking and telecom-

munications, which earlier were completely closed to foreign companies, in a

sequenced reform until 2007. However, China insisted on some steadfast principles:

joint venture requirements of 51 per cent in the mobile phone sector and 50 per cent

for life insurance and for car production. A big controversy between the EU, USA and

China arose around the only exemption made: for the US life insurance company AIG

which was established in Shanghai with full foreign ownership and branching rights.

Due to massive pressure exerted by the EU, two European insurance companies,

Allianz (Germany) and Axa (France) were allowed to remain 51 per cent foreign

owned (Matoo, 2002).

As the accession agreement gives China the status of a developing country, it is

allowed longer transition periods for implementing its liberalization commitments. On

the other hand, countries where a rapid increase in Chinese imports causes a threat

to domestic industries and labour markets can use special safeguards and apply uni-

lateral restraints on Chinese imports until 2008 or even up to 2013 – a clause which

has already been used by the USA and the EU after the termination of the textile

agreement in 2005. Additionally, WTO member countries have the option of anti-

dumping investigations and charges until 2016 in case they feel that cheap Chinese

imports constitute dumping (Li, 2002).

China complied quickly with its commitments to cut tariffs from an average of 15.3 per

cent in 2001 to 9.9 per cent in 2006, and passed more than 3000 legal provisions and

regulations to protect foreign investment and business. The average agricultural tar-

iff worldwide stands at 62 per cent, yet China reduced its tariffs on agricultural prod-

ucts to 15.2 per cent in 2006. No other WTO member has ever made such drastic cuts

in such a short period of time. Five years after its accession, WTO Director, Pascal

Lamy, gave China’s performance and structural reforms an ‘A+’. However, the USA

and the EU complained about non-compliance with regard to intellectual property

rights and ongoing product piracy, about “unfair discrimination in favour of Chinese

business” and barriers to market access in the service sector, in particular financial

services (

World Bank News

, 12 December 2006; Third World Network, 2007).

Additionally, the EU and the USA argue that the weak value of the Yuan has given

China an unfair advantage on the world market, making its goods extremely inexpen-

sive. Even after China revalued its currency in 2005, the EU and the USA repeatedly

pressurized China to further appreciate the Yuan to curtail Chinese exports and allow

for more imports. For these reasons the EU still refuses to recognize China as an open

market and to grant market economy status.

The EU supported the social and economic reform in China, in particular the imple-

mentation of its WTO commitments with trade-related co-operation projects which

complement more than 20 bilateral sectoral dialogues, from space technology to edu-

cation, from enterprise regulation to environmental problems. The main purpose is to

“explore new areas of common interest”, exchange of know-how and “pave the way

for business and other operators by eliminating potential regulatory obstacles”.2This

indicates a shift in the co-operation programme away from traditional development

projects toward sectoral interventions with strong training, institution building and

research components, for example round tables with business involvement in the

Financial Services Project (European Commission, 2003). Capacity building on trade

policy issues was supported with EURO 15 million for the period 2004–2009.

1.2. Another Great Leap, Flying Geese and a Tide that Does not Lift all Boats

The WTO accession gave another boost to foreign direct investments, merchandise

trade and growth rates in China. It intensified the ‘flying geese model’ of capital and

investment: China is at the receiving end of a fast relocation of labour-intensive indus-

tries, mainly from other cheap-labour countries, as well as capital-intensive indus-

tries from the North.

At the same time, WTO accession promoted a two-pronged competition with China

on the global market: a race to the bottom and a race to the top (Guan, 2003:214f). To

Financing for co-operation with China under the Country Strategy Paper 2002–2006 was put into action

through the National Indicative Programmes (NIPs) and amounted to EURO 250 million.

http://ec.europe.en/external_relations/china/intro/sect.htm (16.4.08)

remain competitive with other cheap-labour economies, China strives for minimal pro-

duction costs by keeping the wages for labour-intensive work low, by externalizing

social and ecological costs and by increasing productivity (Chan, 2003). Low-priced

export goods and an economy of scale make for a race to the bottom – a stiff price

competition on the world market. This translates into a pressure on wages in other

countries, in cheap-labour countries as well as in highly industrialized countries.

Simultaneously, China wants to climb up the value chain. Its interest in importing

technology and know-how is to catch up with the technologically advanced

economies in Asia, such as Japan and South Korea, and with the knowledge soci-

eties in the West. It wants to gain ground in higher segments of the market and to

upgrade industries. This leads to the much-lamented product piracy and violation of

intellectual property rights and to mounting investment in high-tech sectors to make

for a technological take-off. China’s spending on research and development is grow-

ing even faster than its economy. Its investment in higher education results in more

than four million graduates annually. The rapid expansion of the research and devel-

opment sector opens up opportunities for a third wave of offshoring after labour-

intensive and capital-intensive production: in future high-skilled knowledge produc-

tion could be outsourced to China as well.

Already in 2004, China became the world champion in receiving foreign direct invest-

ments. The massive increase in investment and expansion of industrial capacities

resulted in an overheating of the economy with overcapacities and overproduction in

a number of sectors. To correct the world-beating pace, the Government tried sever-

al times to control and limit investments and balance it with domestic consumption

structure. It raised interest rates, supports domestic demands by consumer credits

and raises wages in the new middle class, However, domestic and foreign strategies

of investment reinforce each other in their obsession with fast accumulation rather

than sustainability.

Additionally, the Government heavily promotes out-

ward investment. Increasing requirements for raw

materials and energy make Chinese companies ‘go

global’ for overseas direct investment and look for

cross-border mergers and acquisitions. Increased

imports of raw material, oil and food items pushed

prices on the world market to new peaks. The major-

ity of China’s Outward Direct Investment (ODI) flows

to Hong Kong, the Association of Southeast Asian Nations (ASEAN) countries, Japan

and South Korea. However, it is Chinese investment in Africa that attracts most

European attention, because the EU feels that it loses hegemony in access to

resource-rich regions, while the spread of western values, democracy and human

rights is undermined by China’s sudden outreach. Particularly since the China–Africa

“There is only one thing more

frightening than China’s exponen-

tial growth. It is that growth sud-

denly stalling or crashing.”

Peter Mandelson,

London, 15 April 2008

Summit held in Beijing in 2006, the Washington consensus of structural adjustment,

trade liberalization and ‘good governance’ finds itself in an unprecedented competi-

tion with the Beijing consensus of state capitalism and political non-intervention.

In 2006 EU–China trade reached EURO 257 billion, with trade in goods growing by

more than 150 per cent between 2000 and 2006. In 2008 China is expected to overtake

Germany as the world champion in exports. Services are the fastest growing sector

in China. After the WTO accession, the EU asked China in a number of General

Agreement in Trade in Services (GATS) requests to “improve” the commitments made

in 12 service sectors, in particular to eliminate restrictions on foreign entry, owner-

ship (joint ventures) and national treatment, particularly in retail, finance and insur-

ance, and telecommunications. In the service sector, EU exports to China expanded

sixfold between 1994 and 2004 (European Commission, 2006a:5), and the EU had a sur-

plus of EURO 1.7 billion in trade in services with China in 2006.

The most striking figures in recent EU–China trade relations, however, are the fast-

growing trade deficit of the EU and the changes in investment. While European

investment in China decreased, Chinese investment in the EU jumped fivefold.

EU China

Trading partners 1) USA 1) EU

2) China 2) USA

3) Russia 3) Japan

Trade balance(2007) EU’s trade deficit with China: €170 bn

China’s trade surplus with the EU: €130.5 bn

Imports/Exports EU exports to China: EU imports from China

2001: €30.5 bn 2001: €81.6 bn

2006: €63 bn 2006: €191 bn

Main exports EU’s main exports to China China’s main exports to the EU

1) non-electrical machinery 1) PC parts, mobile phones,

cameras

2) cars and aircraft 2) textiles and clothing

3) chemical products

Export in services 2003: €6.7 bn

2006: €12.3 bn 2006: €10.6 bn

Investment 2005: €5.9 bn 2005: €441 m

2006: €3.7 bn 2006: €2.13 bn

Source: Eurostat, http://ec.europe.eu/trade/issues/bilateral/countries/china/index_en.htm

Despite the Chinese leadership’s claim to have a “socialist” market economy, inten-

sified liberalization after WTO accession and the phenomenal growth rates resulted

in a more unequal distribution. The wealth gap is widening. Geographical, develop-

ment and income disparities are growing. In 2004, the average per capita income in

Beijing rose by 12.6 per cent, while the standard of living in the countryside fell by 6

per cent (

World Bank News

, 22 February 2005). Between 2001 and 2003 the real

income of the poorest 10 per cent of the population declined by 2.4 per cent, while the

richest 10 per cent enjoyed a 16 per cent increase (

Financial Times

, 22 November

2006). The educational sector shows the same divide: while higher education

increased significantly, it did so at the cost of basic public education in the country-

side. Adult illiteracy increased between 2000 and 2005 from 87 to 115 million people

(Wen, 2007). These findings give a blow to the neoliberal myth that liberalization is a

win-win game and the assumption made by the Chinese Government that “a rising

tide lifts all boats”. Wen concludes that “too much growth, too little development” is

the reality behind China’s economic miracle.

The 11th Five-Year Plan,3proclaimed at the end of 2005, is a response to the growing

disparities and contradictions along this development path and to the social discon-

tent articulated annually in nearly 90,000 local protests and demonstrations by vari-

ous disadvantaged groups all over the country. The five-year programme hoisted the

banner of a “harmonious society” to ease the social tensions. It set out an ambitious

roadmap to expand Gross Domestic Product (GDP) by moving up the value-adding

chain and advancing the service sector, and at the same time to spread wealth more

evenly, stress development in rural areas and the West of the country, create more

jobs and social security, and curtail pollution and energy waste.

However, the Government did not increase social investment, but promoted a market-

oriented reform of the health and educational sector. Public spending on both sectors

as a percentage of GDP is below the world average. High costs and privatization are

barriers for poor households to access medical services and advanced education

(Wen, 2007). These mechanisms contribute to the growing gap between rich and

poor, urban and rural.

To balance the growing disparities between the prosperous coastal strip and the

underdeveloped western and north-eastern regions, the Government tries to redirect

domestic and foreign investments, in particular labour-intensive manufacturing to

inland areas and relatively smaller cities, leaving higher-value-added activities like

research, management, finance, insurance and design in the big cities.

To distance itself form the concept of ‘planned economy’, the leadership called the Five-Year Plan this

time a “programme”.

1.3. Global Europe and Competitiveness First

When the multilateral negotiations of the Doha Development Round at the WTO came

to a stalemate, in October 2006 the EU launched a new trade strategy

Global Europe:

competing in the world

. It calls China a key area of action to safeguard the EU’s exter-

nal competitiveness. China had already earlier embarked on “exploring the route” of

bilateral und regional free trade agreements (FTAs) (Zhang, 2006:422).4

The starting point for an intensification of trade relations is the assumption that “the

EU and China benefit from globalisation and share common interests in its success…

Europe and China can do more to promote their own interests together than they will

ever achieve apart” (European Commission, 2006b:5). At the 9th EU–China Summit in

September 2006 in Helsinki, leaders agreed to launch negotiations on a bilateral

Partnership and Co-operation Agreement (PCA). In June 2007 the EU–China Joint

Committee agreed on the terms of reference and announced the start of substantive

negotiations of the new framework agreement. It will encompass the full scope of

bilateral relations, including an update of the 1985 Trade and Economic Co-operation

Agreement (TECA) and an enhanced co-operation in political and cultural matters;

however, it is also vital to achieve broader social and environmental policy aims. It

will build on the two EU documents published in October 2006:

EU–China: Closer part-

ners, growing responsibilities

and the accompanying policy paper on

EU–China trade

and investment: Competition and Partnership

. China published only a single policy

paper on its relations with the EU (Ministry of Foreign Affairs, 2003).

EU Policy Papers on its relations with China and agreements

1985 1998 2000 2001 2003 2006

Trade and Communication: Bilateral Future Policy Paper: Communication:

Economic Building a EU–China Steps for A maturing EU–China: Closer

Co-operation Comprehensive agreement a more partnership responsibilities +

Agreement Partnership on WTO Effective Policy paper on

(TECA) EU Policy trade and

investment

Competition and

Partnership

As a “prelude to China’s FTA campaign” at the end of 2004, China and ASEAN signed a letter of inten-

tion to form a free trade area within ten years. Presently, nine treaties are under negotiation, involving

27 countries and regions including Chile, Pakistan, Australia, South Africa, the Gulf states etc.

Additionally, China is interested in trade agreements with Russia and North Korea (Zhang 2006:422;

TSAI 2007b:15).

The

Global Europe

strategy marks a double shift in EU trade policies: 1) complemen-

tary to the multilateral negotiations the EU indulges in a new generation of bilateral

FTAs, and 2) it promotes a clear-cut competition paradigm subordinating and redefin-

ing the development paradigm. For the sake of its ‘competitiveness-first’ goal the EU

plans to aggressively advance issues which cannot be advanced in multilateral talks.

Its priority is to gain a foothold in the emerging markets and the so-called “new areas

of growth”, such as services, investment, government procurement, and intellectual

property rights. Services are called “the cornerstone of the EU economy…an area of

European comparative advantage with the greatest potential for growth in EU

exports.” The EU’s focus is on dismantling non-tariff barriers and domestic regulation.

Additionally, it aims to ensure the necessary supply of natural resources and “ener-

gy security”.

In compliance with the

Global Europe

strategy, the 2006 communication with China on

trade and investment puts “competition” first, while in

earlier policy papers on the EU–China relationship “co-

operation” and “partnership” were the leitmotif. Now, the

EU’s main concern is China’s growing competitiveness on

“unfair terms”, which in the EU’s perception prevents “a

genuinely reciprocal trading relationship” and distorts

trade. Thus, “fair” and “unfair” have become new key

words.

Additionally, it raises concerns about the sustainability of China’s development path

because of the wealth disparities, “social, regional and gender imbalances”, and the

enormous environmental costs. As the EU considers China’s disregard for social and

environmental standards as unfair competition, its co-operation programme is set out

to support domestic reform, to promote corporate social responsibility, ensure ener-

gy supply and combat climate change. Offering advice and assistance with regard to

social and environmental problems implies a kind of social and green superiority on

the EU side.

However, the EU’s core interest is to “seek tougher protection of the legal rights of EU

companies” and “assist EU companies on the ground” (European Commission,

2006b:3).

• It assumes that China increases “unjustifiable non-tariff barriers”, and European

exporters and investors face “unreasonable” sanitary and health requirements as

well as non-uniform application of laws.

• It demands adequate protection of intellectual property rights because they are

crucial to the exercise of Europe’s comparative advantage, and seeks to “end the

forced technology transfers for European investors”.

“Europe has to accept fierce

competition. China has to

ensure it is fair competition.”

Peter Mandelson

Strasbourg, 24.10.06

• It complains that many procurement markets remain closed to European business.

• It blames Chinese domestic regulations and policies of discriminating foreign oper-

ators, “imposing local content requirements …and unfairly aiding local industries”.

• It opposes investment restrictions in key industries such as automobiles, petro-

chemicals and steel as well as in telecoms and financial services.

• It realizes that China has become a fierce competitor in the world market for natu-

ral resources and energy while it restricts access of foreign exporters to its own

natural resources.

• In case trade frictions cannot be resolved through dialogue the EU threatens to use

trade defence measures to protect its interests.

• It proposes that further dialogue should include decent work and social and envi-

ronmental standards “by adopting European norms, eco-technologies and stan-

dards of corporate social responsibility”.

A Study on the Future Opportunities and Challenges in EU–China Trade and

Investment Relations 2006–2010

, called the ‘Competitiveness Study’, suggests that EU

business can draw on important competitive strengths in higher-value-added activi-

ties, in particular research and development, design, marketing, servicing, manage-

ment, superior quality of goods and services, and financial strength (European

Commission, 2007a). The study recommends EU business and investment to focus on:

• China’s accession to the WTO Government Procurement Agreement;

• the retail sector: sourcing products from China for EU markets and foreign expan-

sion into the Chinese retail market;

• tradable goods: focusing on gaining share in higher-end markets;

• the machinery sector: energy-efficient machines, power generators and renew-

able-energy-related equipment;

• chemicals and petrochemicals, including environmentally-friendly materials;

• information and communications technology equipment: competition on IT design

rather than manufacturing of commodities;

• financial services: opportunities despite ongoing restrictions; and

the construction sector, which is the largest in the world.

The two EU policy papers and the study on trade and investment relations with China

are very much a brain child of the

Global Europe

strategy, and focus as much on non-

tariff barriers, WTO-plus issues, new growth areas and reciprocity as it is done in the

EU mandate to negotiate bilateral FTAs, for example with India, ASEAN and South

Korea. In this context, the forthcoming PCA with China has to be seen as a crucial

part of the EU trade offensive.

1.4. Development Assistance and Sustainability

Compared to trade and investment policies, development assistance has lost its sig-

nificance. Official development assistance (ODA) was peanuts – EURO 300–400 mil-

lion per year – compared to EU foreign direct investment in China which hit a high of

EURO 5.9 billion in 2005 and fell to EURO 3.7 billion in 2006. The main motivation by the

EU to continue ODA to China is to support China’s transition to a market economy and

sustainable development, and make it a strategic partner on a wide range of policy

issues.

It is noteworthy that in 2006 an external evaluation of the EU’s co-operation pro-

gramme with China was critical of a lack of systematic integration of considerations

on poverty reduction and climate change, and a lack of feedback from the projects

into policy dialogues (European Commission, 2007b:Annex 3.10).

The

Country Strategy Paper

2007–2013 depicts China as a country with dramatic

poverty reduction and a significant contribution to the achievement of the global

Millennium Development Goal targets. While China itself is emerging as a significant

donor, in particular in Africa and Asia, the EU still considers it as a developing coun-

try with large income and regional disparities, vulnerable groups and massive envi-

ronmental degradation. As a low- or middle-income country it is eligible for ODA.

However, unlike traditional ODA recipients, politically and economically it has

become a global player on the world stage.

Compared to foreign direct investment and due to the scale of the country, the ODA

provided by the EU – indicative funding is EURO 224 million for seven years – has only

a very limited impact. The objectives can be best achieved through close co-opera-

tion between donors and EU member states, and a focus on influencing Chinese poli-

cies in three priority areas:

1. support for China’s reform by sectoral dialogues and trainings;

2. support in China’s efforts to address global concerns over the environment,

energy and climate change; and

3. support for China’s human resources development.

Under the first priority, development assistance is designed as a flanking measure to

economic and trade co-operation. Policy dialogues will be held on trade co-opera-

tion, civil aviation, financial services and social protection, sectors “where EU expe-

rience can provide added value”. The programme aims at further development of

China’s legal and regulatory framework, including legal protection for foreign compa-

nies, of intellectual property and technology. Through this form of aid for trade, the EU

strives to advance the process of legalization of economic and trade relations in

China. The goal is – as the

Multiannual Indicative Programme

for 2007–2010 5outlines

– a strong “rules for trade” framework. China should become a “responsible” global

player and increase involvement of civil society. “Gender, social and environmental

issues” and good governance should be addressed as cross-cutting issues.

Additionally, the programme on social protection aims to “strengthen social provision

in order to minimise the social side-effects of economic reform, and contribute to

poverty alleviation” (European Commission, 2007c:7).

The

Inception Report to the Trade Sustainability Impact Assessment

explores the

potential to address common economic, environmental and social challenges in the

context of trade in the future (EU–China Trade SIA, 2007a). It suggests that EU busi-

ness should capitalize on its “green competitiveness”, and identifies competitive

advantages for EU business in the area of energy and resource-efficient machinery

and production, renewable-energy-related equipment, sustainable land management

and biodiversity protection, environmental services and environmental friendly tech-

nologies, organic food, and eco-tourism. Of the ten sectors covered by the report –

from machinery and electronics to forestry – social implications are mentioned for the

textiles sector only, because of the extensive lay-offs in the sector.

The

Global Analysis Report

of the

Trade Sustainability Impact Assessment

formulates

the “baseline context for the PCA negotiations” (EU–China Trade SIA, 2007b). It ques-

tions the economic, social and environment sustainability of the Chinese growth

model. Observing that the social gap is widening it speaks of a “two-speed China” in

terms of urban and rural growth, income and social security, which comes along with

demographic imbalances due to gender and age distribution. According to the report

the environmental unsustainability of its energy- and resource-intensive development

shows in the fact that China is the world’s largest producer of municipal solid waste,

the biggest contributor to global warming and faces alarming shortages of water and

other resources. The report denounces the economic sustainability of the rapid

investment-driven growth at the expense of human welfareand the growing trade

imbalances, including that between China and the EU.

The

Global Analysis Report

perceives the PCA as an opportunity to address some of

these imbalances in a bilateral framework. As priority trade-related areas for the PCA

it identifies eight issues from trade in services to capital movements, and suggests

five sectors – from banking to environmental goods and services – for further in-

depth analysis related to sustainability. This report is the first of a series of “stake-

holder-focused” reports for the EU–China Trade Sustainability Impact Assessment. It

Indicative funding for the four years is EURO 128 million.

is seen as an opportunity for stakeholders both in China and the EU to dialogue and

to provide input into the negotiations. Representatives of governments and business

– but no NGOs or trade unions – participated in the stakeholder consultation in

Brussels in November 2007, while in February 2008 at the consultation in Beijing rep-

resentatives of UN organizations and international NGOs, research institutes and

business were present.

1.5. End of the Honeymoon?

The study

Future Opportunities and Challenges

calculated that in 2004 European

exporters of goods lost export opportunities worth EURO 12.4 billion as a direct result

of non-tariff barriers. In services the estimated loss accounted for EURO 8.9 billion.

The study points at a certain “reform fatigue” in China and to a high level of “local

patriotism” meaning that local administration and party cadres are keen to continu-

ously forge industrial development and growth at any environmental and social costs,

often disregarding WTO commitments, legal provisions and domestic regulations

alike.

At the 10th China–EU Summit at the end of November 2007 in Beijing, the tone of the

communication had changed considerably. The honeymoon after the WTO accession

was declared to be over. Due to the EU’s falling investments and a growing trade

deficit, EU Trade Commissioner, Peter Mandelson, com-

plained about “growing frustration” at Beijing’s failure to

crack down on the abuse of intellectual property rights

and to dismantle regulatory barriers and investment

restrictions for EU companies, as well as at state subsi-

dies to Chinese exporters. A number of scandals con-

cerning harmful and toxic product ingredients from toys

to toothpaste had once again shaken the credibility of

Chinese producers to meet quality standards. While EU

investments earlier contributed to overproduction in key

sectors and ignored the risks of overheating of the economy, the EU now asks China

to curb overcapacities and to ensure sustainability.

Mandelson suggested abandoning the earlier conciliatory tactics toward Beijing,

align more closely with the USA in its more assertive policy and use trade law to hit

back at China (

International Herald Tribune

, 6 November 2007). The European

Commission calculated that European business loses an estimated EURO 55 million

per day in trade opportunities because China maintains investment and ownership

caps in many sectors such as banking, construction and telecommunications. It cited

“China failed to respond to a policy

of co-operation and dialogue…

To some extent, the Chinese jugger-

naut is out of control.”

Peter Mandelson,

November 2007

the telecom sector as an example of the protectionist culture: of 22,000 telecom

licenses China granted since 2001, only ten went to foreign companies (European

Commission, 22 February 2008).

However, a heated debate divided the EU corporate sector between producers and

importers. Companies that produce, for example, textiles, bulbs or natural stone in

European countries fear Chinese competition, while retailers and traders who import

from China benefit from the low production costs. Orgalime, the lobby group for the

European engineering industry, estimates that in the EU only 250,000 jobs depend on

steel making, however, seven million jobs rely on imported steel. It is expected that in

future the lobby of the importers will be stronger than that of the producers. This is an

indicator for the restructuring of the European economy, a shift of focus from produc-

tion to services, and for a growing dependency on the Chinese economy. The fierce

rhetoric about concerns over unfairness of competition and sustainability covers up

the still huge profits made by EU business with China.

The 10th China–EU Summit decided to establish a High Level Economic and Trade

Mechanism to rebalance trade relations and overcome the tensions. This mechanism

was launched in April 2008 in Beijing after the Chinese Government announced its

readiness to talk to the exiled Tibetan Government.

Two other heated debates about China’s authoritarian and undemocratic role have

raised temperatures in the European Parliament and EU member states. The China

Development Bank set up a China–Africa Development Fund, launched with $1 billion

to finance Chinese investment and operation in Africa in the sectors of infrastructure,

housing, water conservation and industrial parks. The fund will be expanded to $3 bil-

lion in the second phase and eventually to $5 billion. Beside its continued engage-

ment in Sudan for oil, China supports the undemocratic government of Zimbabwe with

investment in large projects and supply of weapons.

A report on “China’s policies and its effects in Africa” was drafted for the European

Parliament which accuses China of utilizing the lack of capacities and domestic

industries in African countries for a ruthless exploitation of Africa’s natural

resources. Despite a warning that Europeans should not pretend to be the “better”

colonialists and capitalists, the moral overtone of the report is quite hypocritical,

based on the fear that the EU will lose its privileged access to resources in Africa, and

that China will get access to the EU market through Africa. For example, without men-

tioning the adverse effect of EU second-hand clothes on local textile industries in

Africa or the devastating impact of cheap agricultural imports from the EU on African

agriculture, the report blames China for destroying local industries by a “textile tsuna-

mi”.6As a way out of the fierce competition on the African continent, DG Development

proposed a trialogue between the EU, China and Africa on “peace, stability and sus-

tainable development in Africa.”

Contrary to this criticism, African leaders praise China’s investors’ role in improving

infrastructure and stimulating economic growth and play off Chinese and European

investors and donors against each other. Abdoulaye Wade, president of Senegal,

stated that “China’s approach to our needs is simply better adapted than the slow and

sometimes patronising post-colonial approach of European investors, donor organi-

sations and non-governmental organisations” (

Financial Times

, 23 January 2008).

In March 2008, the EU reacted even more strongly to the human rights violation in

Tibet after the demonstrations by monks against the oppression of Tibetan culture and

religion and by young unemployed people against their exclusion from the new pros-

perity in China. China-bashing and Sinophobia reached a new peak. China rejected

the EU’s criticism once again as intervention into internal affairs and national sover-

eignty and as “dehumiliation”.

EU Trade Commissioner Mandelson has been keen to calm down the China-bashing

on economic and human rights grounds and the calls for a new protectionism. He

suggests avoiding direct political confrontation, as he wishes to continue sitting at

the negotiating table and still promotes the approach of ‘change through trade’ – con-

trary to other voices in the European Parliament and member states which assert that

human rights should not be subordinated to economic interests.

See http://www.europarl.europa.eu/meetdocs/2004_2009/documents/pr/697/697015/697015en.pdf,

[accessed 27 November 2007] and the announcement of the public consultation;

http://ec.europa.eu/development/icenter/repository/consultation6_16042007_EU/Africa/china/dialogue

_EN.pdf,

see Guerrero/Manji 2008.

2. Chinese Transformation and its Gender Implications

Liberalization started in China in the agricultural sector by permitting individual pro-

duction and sale to farmers. Unlike the ‘shock therapy’-style economic reform in the

former Soviet Union, liberalization was gradually extended to other economic sectors

on an experimental basis as a kind of locally confined trial-and-error project, which

would be discontinued or revised if it failed and quickly expanded if successful. The

success story of export production started 1980 with the establishment of four Special

Economic Zones (SEZs) in the Pearl River Delta and by granting foreign investment a

legal status. From 1984 onwards, China was ambitious in expanding its export produc-

tion in SEZs, and scaling up its industrialization and technological development. To

attract more investment, foreign companies were provided with preferential tax treat-

ment, freedom to import inputs and the right to retain foreign exchange.

Investments in labour-intensive manufacturing and assembly were the engine behind

China’s integration into the world market. In 1993, 82 per cent of foreign investors list-

ed cheap labour as the main incentive for investing in China, 56 per cent mentioned

tax concessions and 50 per cent access to the Chinese market (Asia Monitor

Resource Center (AMRC), 1998:206). Export industries are highly gender-segmented

economic areas. As in free trade zones in other countries of the global South, in

labour-intensive sectors preference was given to women because of stereotypes

such as ‘nimble’ fingers, patience and abilities to concentrate for long hours. Soon it

was apparent that hard-working women – mostly young docile migrants from the

countryside – were a comparative advantage which attracted foreign investment.

The female-labour-directed investments and the feminized export industrialization, in

particular in clothing, textiles, shoes, toys and electronics, contributed substantially

to the amazingly high growth rates of 9 per cent per annum (Seguino, 2000).

At the same time, as part of the economic reform state-owned enterprises were dis-

mantled and state-owned property privatized. The collapse of the state sector caused

a massive gendered process of retrenchment: women, who had represented 40 per

cent of the labour force of state enterprises, made up 60 per cent of the up to 40 mil-

lion people retrenched in the past 15 years. They received fewer opportunities for

training and re-employment than men, which resulted in the unknown phenomenon of

unemployment. According to the World Bank, there is ample evidence of a feminiza-

tion of poverty (World Bank, 2002:6).7

Chinese economic statistics and data on employment are inconsistent and seldom gender-disaggre-

gated. This holds very much true for poverty indicators. The official Chinese poverty line is 25 cents

income per day, far below the UN-drawn poverty line of US$1 per day.

Those tendencies of gender differentiation in the economy and discrimination against

women indicated a backlash against the socialist era

of gender equality. Based on Mao’s saying that “what-

ever a comrade can do, a female comrade can do as

well”, policies and laws were aimed at giving women

a higher status. With the integration of women into the

danweis

– the labour collectives – the collectivization

of reproductive work in the

danweis

(cooking, child

care, health care, recreation etc.) and its rigid popula-

tion control, the Socialist Party aimed at breaking up

the old gender division of labour and the Confucian patriarchal gender relations.

Gender roles were desexualized by a uniform dress code and hair style which actu-

ally implied a masculinization of women’s roles.

However, the gender egalitarianism forced by the state and the party remained high-

ly contradictory. Women’s emancipation was equated largely to economic activity

and was promoted for the sake of socialism and the

nation. Women’s nearly systematic exclusion from

political leadership was an indicator that the gen-

dered power relations had not really changed.

Participation of women in state-owned industries

and

danweis

was high but still asymmetrical.

Women’s battalions in steel production, mining and

ship construction were set up, but no men were

obliged to work in the kindergardens of the

danweis

Similarly, the target of equal pay and equal recogni-

tion for all kind of work was not fully met. Most of the

care work in private households was done by

women, with a particular care role assigned to

grandmothers who after retirement at the age of 50 were expected to take care of the

grandchild(ren) so that the mother was able to continue working in the

danwei

The still ongoing dismantling of the state-owned sector means that the retrenched

workers not only lose their job and (small) income but, more importantly, also a com-

plex system of social security and basic facilities from housing to health care.

Liberalization, privatization and market competition did open new chances and liber-

ties in the emerging labour markets but did not substitute the old ‘iron rice bowl’

regime of social provisions.

At the same time, the growing sex ratio at birth indicates that the transformation of

the economy and society did not change the prevailing preference given to sons, par-

“It is an ironic and embarrassing

situation if, along with economic

growth, gender equality were to

deteriorate.”

Huang/Zhan, 2005

“The imperative of competition

increasingly takes precedence over

the protection of equality rights…

State affirmative action policies

have receded while traditional gen-

der stereotypes and values have re-

emerged, including increasing gen-

der discrimination in the labor

market.”

The World Bank, 2002:14

ticularly in the countryside. In the past decade, the ratio of newborn boys to girls rose

by 10 per cent to 118 boys for every 100 girls, in some provinces however to 130:100.

The millions of “missing women” – as Nobel laureate Amartya Sen called the phe-

nomenon – indicates that the one-child policy has even reinforced the preference

given to males, although the Government launched a ‘care for girls’ campaign and

vowed to take tough measures to control sex tests of foetuses and femicide (Xinhua,

22 January 2007). On the other hand, in urban areas the one-child family makes par-

ents spend a lot for education of girls as well as boys.

2.1. The Rediscovery of Gender Differences in the Market Economy

In the transformation process a re-invention of gender differences emerged as the

labour markets became segregated and hierarchically

organized according to a new valuation of work

(Lau/Liu/Zhang, 1999). When retrenched from bankrupt

state-owned enterprises, women were often sent into

early retirement with “women go home” slogans.

When retrained, they were re-educated to be ready for

informal employment and trained in ‘female’ skills such

as domestic labour. The majority of women are thus

placed at the bottom end of the value chain and once

again in care work.

The core workers in export manufacturing are young

migrants from rural areas, dagongmei (‘working girls’),

whose remittances back home help millions of rural

households to survive at the subsistence level. Despite

the new job opportunities in export industries, the rate

of female employment in urban areas went down from

76.3 per cent to 63.7 per cent between 1990 and 2000 (Lipinsky, 2006:220). Liu Jieyu

concludes that “the cost of restructuring has fallen upon women disproportionately”

(Liu, 2007).

Between 1990 and 1997 the gender wage gap increased by 5 per cent in the country-

side and by 7 per cent in the cities. According to UNDP it presently stands at 64:100

(UNDP, 2007/8). Ageism – discrimination based on age – in the labour market is much

stronger for women than for men, so the employment rate of women is falling rapidly

after the age of 40.

Due to the collapse of the danwei system and the privatization of public services, care

“The femaleness of the workers had

to be reinvented and regulated…

Capitalist production in Shenzhen

relies on gender as a basic con-

stituent in developing a new system

of work-place hierarchy. The rural

women were imagined to be more

obedient, tolerant and conforming

to the factory regime.”

Pun 1999:14,18

Pun Ngai, a Hong Kong-based

scholar worked in an electronic

assembly line in the feminized

export region of Shenzhen.

work is relocated to private households and ‘naturally’ becomes a female task. With

a child, the work–life balance is once again an individual problem. In the new urban

consumer class, the institution of the domestic worker – taboo in the socialist era –

is revitalized. This form of informal and invisible employment, in particular of migrant

and elderly women, in the private service sector has spread fast. At least one-third of

urban private households employ a domestic worker.

These developments caused the fall of China’s Gender Development Index: in 1994,

UNDP ranked China 74; in 2003 it had fallen to rank 83 (Beijing Today, 17 September

2004).8They resulted in an increasing refeminization of women’s role in society, a

resexualization of gender roles and a kind of rediscovery of gender differences. While

the Chinese leadership claims to agree to principles of gender equality and equal

opportunities, its top priorities are economic competitiveness and growth. For the

sake of an increase in productivity, policymakers neglect proactive policies to pre-

vent wage and workplace discrimination against women and to enforce women’s

rights.

The beauty economy and the case of Western cosmetics

In the 1990s, when gender differences were re-emphasized, new standards and

images of femininity penetrated China, increasingly influenced by Western norms

and models. Beauty industries were established from hairdressers to fashion

magazines, from fitness parlours to plastic surgery, from a wedding industry to

Miss contests. The beauty service sector is an expanding area for female

employment, in particular self-employment, and attracts young women in partic-

ular. It employs an estimated 16 million of the country’s labour force and is one of

the most profitable and successful economic sectors.

The WTO accession led to the opening of the cosmetics market along with the

spread of advertising and aggressive marketing. Imports of Western cosmetics

grew fast, and the advertisement industry likewise. Apart from Japanese cosmet-

ics, Western products such as L’Oréal and Oil of Olaz began to dominate the mar-

ket. Transnational corporations from the West strongly influenced the promotion

of this new consumer culture and lifestyle, along with the shaping of new con-

cepts of femininity and new gender regimes in the transition to a capitalist mar-

ket order. (Hopkins, 2007; Xu/Feiner, 2007)

Imitation of whiteness and westerness makes for the transnationalisation of

From 2004 onwards the rank went up once again.

beauty and feminity, alongside the transnational expansion of the respective mar-

kets and accumulation regimes. The commodification of beauty facilitates eco-

nomic reform and the growth of highly competitive markets. In their recruitment

strategies, service companies openly discriminate women upon age and appear-

ance, and re-enforce the new norms in the employment market.

2.2. Open Door Policies and the Making of Classes and Gender

It has become a common believe that trade liberalization and foreign direct invest-

ment have a positive effect on women’s employment and income in countries where

unskilled labour is available in abundance. It holds true for China’s entry into the glob-

al economy with labour-intensive manufacturing that cheap and docile female labour

constituted a competitive advantage. Most of them were migrants from poor rural

households who subsidized their families with their meagre income. In many rural

households up to 50 per cent of the annual monetary income is transferred from

‘peasant workers’ – males mainly in construction work, females mainly in export pro-

duction – in the cities to the countryside.

In the recent past, more technology was introduced and more capital-intensive fac-

tories and high-skilled, knowledge-based industries were set up in the prosperous

coastal strip to upgrade production. This resulted in a new composition of the labour

force and the creation of new social classes. While the proportion of female workers

in manufacturing decreased from up to 80 to 60 per cent, a new class of formal work-

ers or labour aristocracy – for example in the foreign-invested car industries, a high-

skilled elite in the IT sector, engineers, managers, developers and researchers, and

corporate executives – emerged, with the majority being male.

Foreign-invested firms pay higher salaries than state-owned and private domestic

companies. However, the gender wage gap is largest in the most liberalized sector

(foreign-invested enterprises) and smallest in the least liberalized sector (state-

owned enterprises) (Maurer-Fazio/Hughes, 2002). Surveys done in foreign-invested

companies, such as Nokia, revealed that working conditions in the factories were

better than in local firms, but the foreign owners also took advantage of lax law

enforcement in China and violated Chinese labour law regarding overtime hours,

social insurance and democratically elected trade unions (AMRC, 29 October 2007).

Foreign-invested companies quickly aim at higher productivity and technological dif-

fusion, which increase the demand for skilled labour. As gender is highly correlated

with skills, women are segregated in less capital-intensive production, while men

benefit more from jobs and higher wages for skilled labour in foreign-invested com-

panies. This led to a marked increase in wage discrimination against women in low-

skilled employment in export-oriented industries during the past decade

(Braunstein/Brenner, 2007). The persistent industrial segregation by gender contra-

dicts the neoclassical assumption that the gender wage discrimination would

decrease on the road towards trade liberalization and growth.

Chinese and EU trade ambitions still converge in a strong interest to reduce produc-

tion costs for the sake of capital accumulation and stimulation of growth. Presently,

with dirty manufacturing being dislocated from the SEZs near the coast and invest-

ments redirected to the Chinese hinterland, a new territory for labour-intensive export

production is opened up. Once again, cheap female labour is targeted for a competi-

tive advantage, partly for labour-intensive production in textiles, garments and toys or

the more capital- and technology-intensive manufacturing of mobile phones, TVs,

PCs, and household equipment.

This progressive penetration of China’s rural inland by the capitalist market economy

and foreign investment is a reaction to a shortage of labour in the Pearl River Delta

since 2003. Wages of workers on the assembly line had not been substantially

increased for 15 years, while living costs in the coastal cities skyrocketed and wages

of skilled labour had multiplied to EURO 500 (Wen, 2005). Non-payment of the minimum

wage of less than EURO 50 per month, long working hours and often unpaid overtime,

police harassment of migrants, sweatshop conditions with a high risk of accidents

and occupational health hazards, and cramped dormitory accommodation caused 10

to 15 per cent of the migrant labourers to stay back in the countryside after the new

year’s holiday each year (World Bank News, 26 August 2004; The Economist, 13

March 2008). Thus, migrant workers voted with their feet against the miserable qual-

ity of jobs and the indecent work and wages.

The Government reacted by increasing wages, by giving migrant workers access to

the new social security system for the first time and by shifting factories and invest-

ments to the hinterland. In 2007, 10 to 20 per cent of the 70,000 shoe factories in the

Pearl River Delta closed down. Most of the business went into poorer interior regions

(The Economist, 13 March 2008). There labour is abundant and docile, mostly young

girls from villages, and production costs – wages, land, energy, and water – less than

half, meaning that a woman at the assembly line would earn only EURO 35 per month.

This salary would not help her to cross the UN-drawn poverty line of US$1 per day

(Chan/Gu, 2006).

The new leap of liberalization is thus to a great extent another phase of female-based

growth strategy and makes once again for the construction of a new working class in

the latest Chinese and global division of labour. Export production and foreign invest-

ment may create new jobs for women; however, at the same time they create a new

class of ‘working poor’. Against the common focus on the quantity of jobs created by

an export- and investment- oriented development path, feminist critique questions

the quality of these jobs and the sustainability of this employment (Staveren, 2007; Lee

1998, 2007a, Pun 2005).

The share of agriculture in labour is still 42 per cent; however, its share of the GDP fell

to 11 per cent. Imports of cheap agricultural products, such as subsidized cotton,

wheat, soybean and cooking oil from the USA, under the WTO agreement resulted in

an estimated loss of 720,000 jobs in the poorest regions of the country in 2005. After

the accession to WTO the producer price of sugar decreased by 35 per cent due to

annual imports of 1.6 million tons of sugar. The sugar price on the world market

ranges below the Chinese producer price because of the EU’s high subsidies (Oxfam,

2003). Since grains are increasingly imported and outcompete local land-intensive

crop production, the traditional plots for grain give way to horticulture for exports and

greenhouses, where most of the work is done by women (Financial Times, 9

December 2005).

Already in the 1990s, due to emigration by males, a feminization of agricultural labour

took place (UNDP et al., 2003:60). Women concentrate in crop production and poultry;

men in fishery, forestry and agricultural services. Contrary to this gendered division

of labour, the distribution of land lease was gender discriminatory, meaning families

with sons received larger allocations than those with daughters. Even after the more

gender-just land redistribution in 2001, the land rights of

women who marry into the husband’s village and work

on ‘his’ land are not clear.

The job losses in agriculture due to import liberalization

are much higher than the current job creation capaci-

ties in agriculture through export production.

Therefore, in the countryside, local governments com-

pete for investment, ready to intensify the race to the

bottom and neglect legal regulations and social provi-

sions.

The emergence of labour markets and the export pro-

duction show that in China nowadays gender plays a

significant role in the making of new labour regimes and in the “politics of making and

unmaking of classes” (Lee, 2005:6; Dai, 2003).

“China, in the 90s of the 20th cen-

tury, began to undergo a drastic

process of class differentiation, while

its social institutions were restruc-

turing and the intervention of the

globalisation process in Chinese

society was deepening. Women have

undoubtedly been chosen to be the

social group to be sacrificed in this

process.”

Dai Jinhua, 2003:138

2.3. Discrimination against Women – Global Patterns, Local Practice

In the intensified process of ‘structural adjustment’ to a market economy, some glob-

al patterns of gender inequalities and discrimination against women in the labour

market occurred in Chinese society that can be attributed to the neoliberal restruc-

turing of economies all over the world:

• informalization of employment, as well as self-employment or one-woman entre-

preneurship;

• feminized labour-intensive export production;

• a gender gap in wages and social security, in particular pensions; and

• a feminized care network of paid and unpaid work (Jin, 2002:13).

These global patterns are framed by the neoliberal slogan of ‘self-responsibility’. The

Chinese version of this framework are the ‘four selves’ propagated by the All-China

Women’s Federation: self-respect, self-confidence, self-reliance, and self-improve-

ment. The package aims at re-educating women and teaching them that they cannot

rely any more on the Socialist Party or state to take care of their well-being from the

cradle to the grave. With slogans like “Be a self-empowering and self-reliant

retrenched person” (Dai, 2003:148), they are trained to strive for economic independ-

ence and entrepreneurship. The ideology of ‘self-responsibility’ makes them attribute

success or failure to themselves rather than to the economic and social conditions

(Zhang, 1995:39). The majority of the women workers who faced redundancy in the

transition process found some new work, albeit mostly informal, self-employed and

low paying (Liu, 2007).

On the one hand “well-paid jobs show a lack of female personnel, while positions

with comparatively low income display a high proportion of women” (Government’s

2002 report on Population and Labour, quoted in: Jin, 2002:12). Female graduates com-

plain about a recruitment discrimination they face which seems to reflect a global

pattern of corporate hiring policies: even with better degrees than male students,

young women face more problems in getting a job.9On the other hand, some of the

‘socialist achievements’ with regard to gender equality in the economy are translat-

ed into the following facts and figures:

• the rate of female economic activity of 69.2 per cent is still higher than in most

European countries;10

Employers fear a loss of working time with young women workers, not only because of pregnancy and

delivery (this would happen only once due to the one-child norm), but additionally it is normal for a

young married woman to have several abortions per year because abortion is often the only available

form of birth control in China.

10 In 2005, the average rate of female employment stood at 56 per cent in the 27 EU countries. See:

European Commission (2007) Report on Equality between Women and Men, Brussels.

• more women get education in so-called male skills and employment in so-called

male professions compared to most Western countries; and

• more women than in most Western countries are in leading positions. According to

the Chinese federation of female entrepreneurs, women manage 40 per cent of pri-

vate companies. In foreign corporations, such as in financial services, high-skilled

young women enjoy good employment opportunities.

Women encounter new job opportunities in the expanding service sector, however,

again particularly in informal employment. Already in 2003, in urban areas irregular

employment accounted for more jobs than traditional formal employment (Ghose,

2005:27). Besides the growing sector of casual and precarious employment in private

households, according to official statistics, women are strongly represented in the

following service sectors:

2003 Health Catering Tourism Education Financial

Services

Percentage of 58 % 55.5 % 47.5 % 46.1 % 37.8 %

female employment

The case of financial services11

Countervailing trends prevail in financial services. While the state-owned banks

lay off hundred of thousands of employees all over the country, the private insur-

ance sector is fast expanding and employs one million sales agents who walk

from door to door. More women than men are engaged in insurance sales.

Domestic and highly localized insurers recruit a majority of laid-off female work-

ers in their forties as sales agents because of their communication skills and their

credibility due to their ‘housewife’ look, which sells well outside the big cities. In

China, sales agents are categorized as self-employed, meaning they are deprived

of benefits such as pensions and medical insurance. They work part-time and on

commission, and can subcontract agents to work under them. Young women and,

in particular, young men tend to join joint venture and foreign insurers, such as

the German-invested, high-profile Allianz-Dazhong.

The earnings of sales agents are below average. They are told that their income

depends on their working hours, on individual self-discipline and work motiva-

This paragraph is based on own research done on the insurance sector, in particular the domestic

insurer Ping An and the foreign-invested company Allianz-Dazhong in 2004 and on Cheris Shung-ching

Chan (2007).

tion. Many women claim that they find it difficult to “make money out of friends’

pockets”. The training they receive at foreign-invested companies aims at ration-

alizing their sales techniques, using Western labour logic and marketing atti-

tudes. However, because of small earnings and psychological stress, the

turnover is high in insurance sales forces. The agents with the best sales per-

formance are those who adjusted to the new market discipline, work around the

clock and are unemotional and aggressive in exploiting personal relationships in

financial transactions.

The new social security system covers the formal sector in urban areas only. It dis-

advantages women, because women are likely to work informally and as self-

employed, earn lower wages and retire earlier than men. In 2003, of the 250 million

formally employed urban workers only 60 per cent were covered by a pension system,

only 43 per cent by a health scheme and only 17 per cent by accident insurance. A

survey by UNDP et al. found a considerable gender gap in social security of 12–22 per

cent fewer women being insured than men. The health care reforms have significant-

ly worsened women’s access to health care, and the rising costs reinforced gender

inequities in access to basic services, closely linked to socio-economic inequalities

(Chen/Standing 2007).

This adds on to women’s vulnerability and their risk of

old age poverty (UNDP et al., 2003:84, 88, 192f). It is only

since 2006 that migrant workers – because of the local

registration, the

hukou

system12 – have been allowed to

participate in the social security system at their place

of work. However, it is still difficult for migrants to get

access to public health care in the cities or to public

schools. They often have no choice but to go to costly

private clinics. This is a heavy burden on women for

whom abortion is the prevailing method of birth control.13

Many young migrant women are interested in staying in urban areas and getting an

“Welfare based on employment

rather than on universal citizen-

ship… means that women are more

likely than men to fall through the

cracks of a social safety net.”

Lee Ching Kwan, 2005:9

The hukou system is a registration at the place of residence, which gives citizens a right to live, work

and to social security only at his/her place of original residence. It was established in 1958 to prevent

rural–urban migration and progressively relaxed from 1984 onwards but has not been abolished.

Presently an estimated 150–200 million people with a rural hukou migrated to cities for work.

13 The pill is not made available largely in China. Frequent abortions are the prevailing form of family plan-

ning in China, putting a heavy burden on women’s health. A lot of advertising for private clinics is to be

found in the SEZs. The price for an abortion is around EURO 50 – a month’s salary for a migrant work-

er on the assembly line.

urban

hukou

by marrying an urban man. To return permanently to the countryside

would mostly mean marrying into another village.

The disparities between rural women, migrant workers, domestic workers, high-

skilled students and women in management positions are growing, not only in terms

of income but also in terms of identity and subjectivity. A study from the end of the

1990s revealed the rural per capita income is one-seventh of migrant workers’ earn-

ings in foreign-invested firms, while at the same time migrant women workers’ annu-

al earnings are half the annual income of urban women (Berik/Dong/Summerfield,

2007).

Women from the urban class of the newly rich and super-rich are proud of not need-

ing to work. This is partly an ideological reaction to the work they were ‘forced’ to by

the State in the socialist era – a reaction to be found in many post-socialist societies.

Additionally, both men and women from ethnic minorities experienced larger declines

in the labour force than Han14 (Maurer-Fazio/Hughes/Zhang, 2007). All these tenden-

cies reinforce social differentiation among women.

Han Chinese are the ethnic majority group constituting 91.5 per cent of the population. The Chinese

constitution prohibits discrimination against minorities, and the Government uses preferential policies

and measures to prevent discrimination against ethnic minorities, for example in its population policies,

education, and hiring.

The Just-in-Time Work Regime in the SEZs

Most of the migrant workers do not have a labour contract and are not covered by any social

insurance. Although Chinese labour laws stipulate that overtime must be limited to a maxi-

mum of 36 hours per month, an average working day lasts 12 to 14 hours, seven days a week.

Just-in-time availability of the workers is ensured by accommodation in crowded dormitories

close to the factories. Thus, the dormitories are part of the authoritarian labour regime.

Overtime payments and the piece rate system are not transparent to the workers. However,

since the minimum wage is very low, workers are keen to do overtime to earn more. Migrant

workers are unable to send money home if they do not do overtime. Thus, low wages create

a dependency on overtime. Overtime work is a constituent of the just-in-time regime of prod-

uct delivery.

When Mattel reduced its orders from Chinese factories after the scandal about toxic and

dangerous toys, the workers only worked a few hours per day without knowing why, and

were desperately waiting for more work to do.

Workers get fined for mistakes and for giving ‘wrong’ answers to factory auditors. After a few

years of over-intensive labour, most of the migrant workers leave the factories, suffering

from burn-out and health hazards.

(Chan, 2006; Au/Nan/Zhang, 2007)

3. Social Standards and The Labour Regime

in Manufacturing

With regard to social standards and labour rights, both sides – China and the EU –

manoeuvred themselves into contradictions. In its official communication with China

and the two policy papers the EU argues in a normative way, meaning that only if envi-

ronmental, social and safety standards are enforced, will competition be considered

fair. It complains about the growing wealth gap and regional disparities in China as

well as social and gender imbalances. It asks for “close international co-operation”

on issues of energy, environment and climate change as well as on “international

social standards” such as corporate social responsibility, decent work and social

security. EU corporations are encouraged to take up a model role by “adopting

European norms, eco-technologies and standards of corporate social responsibility

in their operations in China” (European Commission, 2006a,b).

However, when it came to improving the existing labour laws in China, EU-based cor-

porations were very reluctant to agree. The new labour contract law stresses written

contracts, an open-ended contract after two fixed-term contracts, and compensation

in case of redundancy. It still does not ensure freedom to organize nor a right to strike.

In 2006, a public debate on the draft law was encouraged, and US- and EU-based

transnational corporations joined the debate. The EU Chamber of Commerce, repre-

senting 1100 EU-based companies in China, acknowledged that the law stems from

labour laws in Europe. Based on experience in European countries, the Chamber of

Commerce felt, however, that the law tends to “over-regulate the employment relation-

ships”. It proposed more flexibility “to apply to various business situations”. In particu-

lar in the service sector it favours operation on a flexible schedule to reduce costs. This

should apply to lay-offs in the same way, so that companies would be able “to preserve

their business interests”. It was revealing that the then president of the EU Chamber of

Commerce, Janssens de Varebeke, gave a warning in a letter to the People’s Congress,

saying that rising costs of production might force foreign enterprises to rethink new

investments in China (Global Labor Strategies, 2006). US and EU companies threatened

to relocate production to Vietnam and other low-cost Asian countries.

European Employers’ Federations, for example German companies, oppose the intro-

duction of an international norm for social accountability, called ISO 26000, by the

International Organization for Standardization in Geneva because they are unwilling

or unable to make sure that in the whole production and supply chain social and eco-

logical standards are observed, such as freedom to join independent trade unions,

collective wage bargaining etc.

Before the new labour law came into force in China at the beginning of 2008, many

enterprises, domestic as well as foreign-invested, tried to circumvent it. A negative

example was set by Huawei, China’s largest producer of telecom equipment. It asked

7000 of its long-term employees to resign voluntarily, receive compensation and then

apply anew for a job so that they would be classified as ‘new’ employees.

The

All-China Federation of Trade Unions

(ACFTU) is in charge with enforcing the law.

However, being the only legally recognized trade union and a prolonged arm of the

party, its crucial task is to harmonize relationships between management and labour

and not to represent genuine workers’ interests vis-à-vis the employers

(Taylor/Chang/Li, 2003). In the industrial sector the Government urges firms with more

than 25 employees to accept a representative of the ACFTU and instructs state-

owned enterprises to “fulfil social responsibilities”. Any labour activism outside of the

ACFTU faces brutal repression.

With new instructions on Corporate Social Responsibility and the new labour law, the

Chinese Government reacted to the many protests and strikes all over the country.

Annually, around 90,000 ‘incidents of public order disturbances’ were reported offi-

cially. Immediate causes for public protests are the corruption of officials in the coun-

tryside or of corporate management, unpaid wages or pensions, mass retrenchments

or evictions due to dam construction or development projects, and health hazards

because of frequent accidents or use of toxic materials in industries, mining and con-

struction work. However, the state’s role remains contradictory between the protec-

tion of people’s rights and the strict control over them, in particular in terms of labour

regulation and social reproduction, for the sake of productivity, growth and social sta-

bility (Lee, 2007b).

Monitoring in Chinese subcontracting factories which supply to transnational corpo-

rations revealed that in many cases enterprise managers were planted as represen-

tatives of the trade union, that double book-keeping was common, and workers got

fake pay slips which showed correct remuneration of overtime. They were instructed

to give incorrect answers when auditors turned up in the company to monitor codes

of conducts which are widespread among foreign corporations and part of their mar-

keting policies. The suppliers were willing to offend against the codes for the sake of

just-in-time production requirements, and local governments are deliberately reluc-

tant to supervise and get bonuses from prosperous enterprises in return. (

Financial

Times

, 21 April 2005).

3.1. The Case of Textiles and Clothing

On 1 January 2005, the end of the 30-year-old Multi-Fiber Arrangement (MFA) lifted all

quotas on imports of textile and apparel products for countries of the South to the rich

markets of the North. However, according to the MFA, until 2008 countries could apply

‘safeguard quotas’ which restrict the annual growth of Chinese imports to 7.5 per cent

to limit the competition for domestic production. When those safeguard quotas are

eliminated, China is likely to produce more than half of the world’s textiles and gar-

ments, and the estimated 15 million jobs in the Chinese textile sector will increase by

3.8 million (UNDP et al., 2003:205).

The textile sector is a showpiece of how the strategies of European retailers of buy-

ing and selling determine the working conditions in the factories and sweatshops in

cheap-labour countries. The old system of a winter and a summer collection in shops

has made way to a system of placing orders according to customer demand. If a

product sells well, retailers place more orders – so-called ‘efficient consumer

response’. The lead time is short and makes overtime, night shifts and subcontracting

necessary. Retailers advance the international price race to the bottom by methods

of ‘online reverse auction’, which allows bidders to underbid each other online.

Additionally, the ‘flying geese model’ of investment and China’s competitive advan-

tage have strong ramifications for the global labour markets, and on investment and

trade in many countries of the South and the North. While the first phase of offshoring

in the 1970s led to the closure of textile industries in Europe and to the retrenchment

of millions of female workers, the fast shift of subcontracts in manufacturing to China

has resulted lately in a de-industrialization and a defeminization of the labour force in

other export-oriented countries of the South. At the beginning of 2005, according to

the International Textile, Garment and Leather Workers’ Federation (ITGLWF), 25,000

jobs were lost each in Cambodia and Sri Lanka. For the sake of competitiveness in

Bangladesh the 72-hour week was legalized (www.maquilasolidarity.org).

The comparative advantage of China in the textile and clothing sector is complex.

Apart from the complete product cycle, modern technology, and recent improve-

ments in quality, it consists of cheap hard-working female labour, increased produc-

tivity and enormous economies of scale. Hourly wages of Chinese textile workers are

higher than those of their counterparts in Bangladesh, Indonesia, Vietnam, India and

Pakistan; however, in China the piece rates are lower because the Chinese workers

are more productive15 (Ferenschild/Wick, 2004:24). Although a code of conduct was

introduced by the Government in the textile and clothing sector in 2005 and signed by

170 Chinese companies and two major foreign investors, workers in the sector point

out that they did not experience any substantial improvement regarding work condi-

tions and wages.

In 2005 China’s textile exports to the EU and the USA increased by 50 per cent, while

In 2002, Chinese seamstresses earned only 28 to 45% of the hourly wage of those in Latin-American

prices declined by 30 to 50 per cent. Both intensified their complaints about trade dis-

tortion, plant closures and job losses in their countries, and their questioning of the

grim working conditions on the shop floor in China. In 2005, increased imports from

China were said to put 165,000 jobs in the EU at risk. In August 2005, millions of pairs

of trousers and sweaters piled up at EU customs and were not allowed to get to the

shops which had ordered them. The European Commission became trapped in a par-

adox situation between European textile producers, particularly in southern European

countries, who are outcompeted by the cheap Chinese imports, and European retail

companies, in particular from northern European countries who order and import

clothing produced in China. After China agreed to observe the protectionist safeguard

clause vis-a-vis the EU and to restrain its imports until 2008, the goods which were

stuck at the borders were allowed inside. The EU demands better access to the

Chinese market for the European textile industries which do not compete in mass pro-

duction but which moved up the value chain by investing anew in technology and

quality.16

All through this trade war, China was called in Europe the biggest winner of the MFA

phase-out. However, the Chinese perception is different: with regard to employment

the prevailing feature in the country is retrenchment from state-owned textile enter-

prises and a high rate of unemployment. The official news agency Xinhua complains

about a “new quota era” and “protectionism” imposed by the EU and USA and more

generally about an increasingly “hostile trade environment” for Chinese companies

(Xinhua, 11 December 2006). The Hong Kong-based

Globalisation Monitor

rightly hints

at the fact that foreign companies directly benefit from the Chinese expansion of

exports because they account for one-quarter of all export earnings from textile prod-

ucts. Exporters of textile machinery gained a lot from the Chinese ambition to upgrade

production: Germany’s exports of textile machinery, in particular spinning machinery,

hit a peak of EURO 1 billion in 2006. Taking a socially more differentiating look at the

wins and losses, it appears that companies – Chinese, EU and other foreign investors

– are “winners, while workers are losers, albeit to different degrees under different

time frames” (Au, 2006).

3.2. Social Unrest and Disharmony

In the recent past, SEZ workers started to make a difference. A new labour activism

built up, mostly in the Pearl River Delta after the much-lamented labour shortage

occurred. Still, the protests against appalling working conditions and despotic facto-

The European Commission negotiated with China a double-checking surveillance system for 2008

which monitors textile imports before they leave China.

ry regimes are localized and spontaneous, rather than organized across factories and

based on class consciousness. However, they not only increase in number, but they

get more radical and become increasingly public (Chan, 2008). Workers block high-

ways to attract public and media interest, they confront police outside the factory,

and they write petitions to the local administration. It is obvious that workers have

gained in terms of confidence, bargaining power and awareness of their rights.

Women workers have already come to the conclusion: “Big strike – big improvement;

small strike – small improvement; no strike – no improvement”, meaning it is worth

struggling for one’s rights. Apart from the collective struggles against despotic facto-

ry regimes and frequent accidents, individuals go to court using the law as a tool in

their struggles (Au/Nan/Zhang, 2007). Often, solidarity is constructed in the context of

ethnic, provincial and language identity in the dormitories (Lee, 1998; Pun, 2005).

Since the inflation rate, particularly of food items, went up in summer 2007 – an

unknown phenomenon in China – protests against wage arrears, non-payment of

minimum wages and overtime became more frequent. Eighteen thousand workers of

the German-funded firm FRIWO, a subcontractor for Nokia, demonstrated in the

streets of Shenzhen for better payment. Apart from wages and compensation, health

is an important entry point for mobilization.

However, although new labour activist groups that are based outside the factories

are not allowed to register as trade unions, some have registered as a cultural NGO

or as a co-operative. They face a lot of repression in their daily support to the labour-

ers. The Chinese leadership reacts increasingly nervously about networking between

factories and co-ordination on a regional and national level. News about resistance

to the restructuring of the economy and its high social and environmental costs are

hushed up. Activists are detained in camps, and there are regular crackdowns on

their offices and their websites (Chan, 2008).

Chinese Working Women Network (CWWN) started its empowerment work

with women workers in Shenzhen after a fire in a Zhili toy factory killed more

than 80 workers, all but two women, in 1996. It runs a hotline on health and safe-

ty issues and trains women on occupational health and legal rights. It provides

a cultural space, trains and sets up workers’ committees in the industries to

monitor codes of conducts, promote corporate social responsibility and articu-

late labour rights. It set up collective purchasing networks in dormitories and a

shop which provides for the needs of migrant women.

In 2005 it joined a campaign for a living wage initiated by the Bangkok-based

Committee for Asian Women (see www.caw.org) in nine Asian countries.

Additionally, a new type of advocacy group is slowly emerging – mostly initiated by

environmental and development-oriented groups – that works on global players and

international policies, such as the China WTO network and a working group on the

international financial institutions.

Transnational solidarity is not getting easier, as workers in different countries are

made each others’ enemies and seem to steal each others’ jobs. In most countries,

trade unions’ struggles

against the downward pressure on wages, standards and jobs have become futile.

However, new forms of organizing labour and women’s empowerment are explored,

different from the conventional trade unionist model. Increasingly, links with transna-

tional networks are developing. One example is the co-operation with the Clean

Clothes Campaign in Europe, which addresses transnational corporations to make

sure that codes of conduct are adhered to all through the production and supply

chain. Another example is the transcontinental NGO network, Make it fair, which

wants to cover the whole production and disposal chain of the IT industries

(www.makeitfair.org). The campaign ‘Play Fair 2008’ raises concerns over core labour

standards in the production chain of licensed products for the Olympics. In the EU, a

number of NGOs started to challenge their governments about procurement of prod-

ucts from China, from computers to natural stones and uniforms. While targeting EU

actors in particular, the civil society organizations involved must avoid joining the

stereotyped China-bashing in the Western media as a voracious dragon and rather

try to engage with new civil society forces in China.

4. Conclusions

After exploring the topical trade and investment policies between the EU and China

and their gender-specific effects on the ‘socialist’ market economy in China, a key

question remains: whether the EU’s concerns about economic, social and environ-

mental sustainability included in the policy documents can change development in

China for the better. How powerful and effective is the concept of ‘change through

trade’ on social, regional and gender inequalities, or regarding environmental degra-

dation, resource exploitation and energy waste?

The European Commission faces a broad range of battlefields while aiming to secure

competitiveness of European business in the global economy: it wants to ensure

access for EU companies and investors to the Chinese market, it wants to control and

restrict the growing flood of imports of goods manufactured or assembled in China, it

wants to compete with China in Africa regarding resource exploitation, and it has to

balance the countervailing interests within European business, in particular between

producers and traders. Contradictions are striking between the political rhetoric

about social and environmental concerns and the reality of EU business in China,

which is first and foremost governed by its interest in legally protected expansion and

profit making. The EU trade and investment policies apply double standards. On the

one hand, they attempt to protect EU business and its very interest in efficiency and

profitability by the rule of law in China, disregarding the adverse social and environ-

mental effects of this corporate-driven growth path. On the other hand, they delegate

the responsibility for sustainable economic growth, social standards and climate pro-

tection to the Chinese Government, and appeal to its ‘fairness’. Due to the competi-

tive advantage of EU companies in environmentally friendly and resource-saving

technology, it seems to be possible to link economic interests to environmental con-

cerns. However, regarding issues of social, gender and regional inequality, EU trade

and investment policies do not have any answers to give.

The second part of this paper explored how China’s ‘open–door’ policies implied a

rediscovery of gender differences and used gender as a constituent in the establish-

ment of new labour regimes and as a significant marker in the creation of new social

classes in the post-communist era. After China’s WTO accession these processes are

increasingly driven by a complex interaction between domestic policies, and foreign

trade and investment policies. The long-standing claim of socialist policies for gender

equality became subordinated to the imperative of fast economic growth. Presently,

the Chinese leadership is torn apart between its prevailing interest in economic

growth and wealth, spreading social unrest by groups who are marginalized or

excluded from welfare, and the pressure exerted by the USA and the EU.

Civil society organizations concerned about development issues, social justice and

gender equality increasingly challenge the EU’s and China’s trade race by a dual

strategy of engagement. They question EU trade and investment policies focusing on

competitiveness and ensuring the corporate rights of European business in China,

and they highlight their contribution to growth and development dynamics which are

unequal, unsustainable and unjust. At the same time, they broaden opportunities and

create space to exchange knowledge, build civil society alliances and network with

people in China.

Literature

Asia Monitor Resource Center (AMRC) (1998)

We in the Zone, Women Workers in

Asia’s Export Processing Zones

, Hong Kong, 191–241

Au, Loong-Yu (2005) The Post MFA Era and the Rise of China, in:

Asian Labour

Update

, July–September 2005, 14–19

Au, Loong-Yu/Nan Shan/Zhang Ping (2007)

Women Migrant Workers under the

Chinese Social Apartheid

, Bangkok

Berik, Günseli/Dong, Xiao-Yuan/Summerfield, Gale (2007) China’s Transition and

Feminist Economics, in:

Feminist Economics, A Special Issue on Gender, China, and

the World Trade Organization

, Vol. 13, No. 3&4, July/October 2007, 1–35

Beseler, Hans-Friedrich (2002) The EU–China Negotiations: Breaking the Deadlock,

in: Holbig, Heike/Ash, Robert (Eds) (2002)

China’s Accession to the World Trade

Organization

, London/New York, 3–20

Braunstein, Elissa/Brenner, Mark (2007) Foreign Direct investment and Gendered

Wages in Urban China, in:

Feminist Economics

, Vol. 13, No. 3&4, July/October 2007,

213–237

Chan, Anita (2001)

China’s Workers under Assault. The Exploitation of Labor in a

Globalizing Economy

, London

Chan, Anita (2003) A “Race to the Bottom”. Globalisation and China’s labour stan-

dards, in:

China Perspectives

, No. 46, 41–50

Chan, Chris (2008)

Emerging Patterns of Workers’ Protest in South China

, Paper pre-

pared for the 13th International Conference ‘Alternative Futures and Popular

Protest’, at Manchester Metropolitan University, 17–19 March 2008

Chan, Jenny (2006) Chinese Women Workers Organize in the Export Zone, in:

New

Labor Forum

, Vol. 15 No. 1, Spring 2006, 19–27

Chan, Sarah/Gu Qingyang (2006) Investment in China Migrates Inland, in:

Far

Eastern Economic Review

, May 2006, Vol. 169, No. 4, 52–56

Chan, Shung-Ching Cheris (2007) Honing the desired attitude. Ideological work on

insurance sales agents, in: Lee, Ching Kwan (Ed.) (2007)

Working in China,

Ethnographies of labor and workplace transformation

, London/New York, 229–247

Chen, Lanyan/ Standing, Hilary (2007) Gender Equity in Transitional China’s

Healthcare Policy Reforms, in

Feminist Economics, A Special Issue on Gender,

China, and the World Trade Organization

, Vol. 13, No. 3&4, July/October 2007, 159-

189

Clean Clothes Campaign (2005)

Made by Women. Gender, The Global Garment

Industry and the Movement for Women Workers’ Rights

, Amsterdam

Dai, Jinhua (2003) Class and Gender, in:

ARENA, China Reflected

, Hong Kong,

138–152

Deutsche Bank Research (2004) Foreign direct investment in China - good prospects

for German companies?

China Special

, 24 August 2004, Frankfurt

European Commission (2003)

Policy Paper for Transmission to the Council and the

European Parliament: A maturing partnership – shared interests and challenges in

EU–China relations

, Brussels, 10 September 2003, COM(2002)533 final

European Commission (2006a) Commission Working Document Accompanying COM

(2006) 631 final:

Closer Partners, Growing Responsibilities. A policy paper on

EU–China trade and investment: Competition

, Brussels, 24 October 2006, COM(2006)

631 final

European Commission (2006b)

Communication from the Commission to the Council

and the European Parliament. EU–China: Closer partners, growing responsibilities

Brussels, 24 October 2006, COM(2006) 632 final

European Commission (2007a)

Study on the Future Opportunities and Challenges in

EU–China Trade and Investment Relations 2006–2010

, Brussels;

http://ec.europa.eu/trade/issues/bilateral/countries/china/legis/index_en.htm

European Commission (2007b)

Country Strategy Paper 2007-2013: China

, Brussels;

http://ec.europa.eu/external_relations/china/csp/2007_sp_en.pdf

European Commission (2007c)

China, Multiannual Indicative Programme 2007–2010

Brussels; http://ec.europa.eu/external_relations/china/csp/2007_mip_en.pdf

European Commission (2008) EU-China trade in facts and figures, Brussels,

22.02.2008

http://trade.ec.europa.en/doclib/docs/2008/february/tradoc_137937.pdf (accessed

30.05.2008)

EU–China Trade SIA (Sustainability Impact Assessment) (2007a)

Draft Global

Analysis Report

, Brussels/Beijing; http://www.euchina-

sia.com/media/docs/GAR_DRAFT.pdf

EU–China Trade SIA (Sustainability Impact Assessment) (2007b)

Inception Report

Brussels/Beijing; http://www.euchina-sia.com/media/docs/SIA.Inception.pdf

Ghose, Ajit K. (2005) Employment in China: recent trends and future challenges,

ILO

Employment Strategy Papers

, Rome

Global Labor Strategies (2006)

Behind the Great Wall: US Corporations Opposing

New Rights for Chinese Workers

; http://www.laborstrategies.org//index.php

Guerrero, Dorothy-Grace/Manji, Firoze (Eds) (2008)

China’s new role in Africa and

the South. A search for a new perspective

, Oxford/Nairobi/Bangkok

Guan, Xinping (2003) Globalization, Inequality and Social Policy: China on the

Threshold of Entry into the WTO, in: Yang, Tuan (Ed.) (2003):

Social Policy in China

Chinese Academy of Social Sciences, Beijing, 203–222

Hopkins, Barbara E. (2007) Western Cosmetics in the Gendered Development of

Consumer Culture in China, in:

Feminist Economics

, Vol. 13, No. 3&4, July/October

2007, 287–307

Huang, Ping/Zhan, Shaohua (2005)

Internal Migration in China

, Paper presented at

the Regional Conference on Migration and Development in Asia, 14—16 March 2005

in Lanzhou by IOM, PRC/MFA, DFID

Jin, Yihong (2002)

Entry into the World Trade Organization and Women’s

Employment: Impact and Countermeasures

, NMLA/GTZ, Beijing

Lee, Ching Kwan (1998)

Gender and the South China Miracle: Two Worlds of Factory

Women

, Berkeley

Lee, Ching Kwan (2005)

Livelihood Struggles and Market Reform. (Un)making

Chinese Labour after State Socialism

, UNRISD, Geneva

Lee, Ching Kwan (Ed.) (2007a)

Working in China, Ethnographies of labor and work-

place transformation

, London/New York

Lee, Ching Kwan (2007b)

Against the Law: Labor Protests in China’s Rustbelt and

Sunbelt

, Berkeley

Li, Yuefen (2002)

China’s Accession to WTO: Exaggerated Fears?

United Nations

Conference on Trade and Development, discussion paper no. 165

Liu, Bohong (2005) The All-China Women’s Federation and Women’s NGOs, in: Du,

Fangqin/Zheng, Xinrong (Eds)

Mapping the Social, Economic and Policy Changes in

Chinese Women’s Lives

, Ewha Women’s University Press, Seoul

Liu, Jieyu (2007) Gender Dynamics and Redundancy in Urban China, in:

Feminist

Economics

, Vol. 13, No. 3&4, July/October 2007, 125–159

Maurer-Fazio, Margaret/Hughes, James (2002) The Effects of Market Liberalisation

on the Relative Earnings of Chinese Women, in:

Journal of Comparative Economics

Vol. 30 No. 4, 709–931

Maurer-Fazio, Margaret/ Hughes, James/Zhang, Dandan (2007) An Ocean Formed

from One Hundred Rivers: The Effects of Ethnicity, Gender, Marriage, and Location

on Labor Force participation in Urban China, in:

Feminist Economics

, Vol. 13, No.

3&4, July/October 2007, 159–189

Matoo, Aadity (2002)

China’s Accession to the World Trade Organization. Services

Dimension

, The World Bank, Development Research Group Trade, Policy Research

Working Paper 2932, Washington

Ministry of Foreign Affairs of the People’s Republic of China (2003)

China’s EU Policy

Beijing

Oxfam (2003)

Bitter Sugar

, Oxfam Hong Kong Briefing Paper, Hong Kong

Pun, Ngai (1999) Becoming Dagongmei (Working Girls): The politics of Identity and

Difference in Reform China, in:

The China Journal

, No. 42, 1–19

Pun, Ngai (2005)

Made in China. Women Factory Workers in a Global Workplace

Durham

Seguino, Stephanie (2000) Gender Inequality and Economic Growth. A Cross-

Country Analysis. In:

World Development

, Vol. 28, No 7, 1211–1230

Staveren, Irene V. (2007): Gender Indicators for Monitoring Trade Agreements, in:

Staveren, Irene/Elson, Diane/Grown, Caren,/Cagatay, Nilufer (Eds):

The Feminist

Economics of Trade

, London

Taylor, Bill/Chang Kai/Li Qi (2003)

Industrial Relations in China

Cheltenham/Massachusetts

Third World Network (2007) Info Service on Finance and Development, November

2007

UNDP (2007/8)

Human Development Report

, New York

UNDP/CICETE/NDRC/UNIFEM (2003)

China’s Accession to WTO: Challenges for

Women in the Agricultural and the Industrial Sectors

, Beijing

Wen, Dale (2005)

China Copes with Globalization

. A report by the International

Forum on Globalization, San Francisco

Wen, Jiajun Dale (2007): Too much Growth, too little Development: The reality behind

China’s economic miracle, in:

Development

, Vol. 50 No. 3, 30–35

World Bank (2002)

China, Country Gender Review

, Washington

World Trade Organization (2006)

Trade Policy Review: China

;

http://www.wto.org/english/tratop_e/tpr_e/tp262_e.htm

Xu, Gary/Feiner, Susan (2007)

Meinü Jingji

/China’s Beauty Economy: Buying Looks,

Shifting Value, and Changing Place, in:

Feminist Economics

, Vol. 13, No. 3&4,

July/October 2007, 307–325

Zhang, Bin (2006) Bilateral aspirations, in:

D+C

, Vol. 33, No. 11, 422–424

Zhang, Naihua/Wu, Xu (1995) Discovering the Positive Within the Negative: The

Women´s Movement in a Changing China, in: Basu, Amrita (Ed.):

The Challenge of

Local Feminisms. Women’s Movements in Global Perspective

, New Delhi, 25–58

Rue de la Science 10 I1000 Brussels IBelgium

Tel.: +32 2 545 90 70 IFax: +32 2 512 73 42 Iinfo@wide-network.org Iwww.wide-network.org

WIDE

ResearchGate has not been able to resolve any citations for this publication.

A “Race to the Bottom”: Globalisation and China’s labour standards

Article

Full-text available

Apr 2003

Anita Chan

Chinese women workers organize in the export zone

Article

Full-text available

May 2006
New Labor Forum

Jenny Chan

China's economic reforms since the late 1970s have brought about an unprecedented surge in internal rural to urban migration. Most transnational corporations in Hong Kong, Taiwan, South Korea, Japan, the United States, and Europe, and their subcontractors, recruit millions of peasant migrants, in particular unmarried and young women, to work in export-led Special Economic Zones (SEZ). Limited educational opportunities, especially for females, the lack of village employment prospects, and low prices for agricultural prod

Discovering the Positive Within the Negative: The Women's Movement in a Changing China: Women's Movements in Global Perspective

Chapter

Feb 2018

Against the Law: Labour Protests in China's Rustbelt and Sunbelt

Article

Jun 2007

C.K. Lee

This study opens a critical perspective on the slow death of socialism and the rebirth of capitalism in the world's most dynamic and populous country. Based on remarkable fieldwork and extensive interviews in Chinese textile, apparel, machinery, and household appliance factories, Against the Law finds a rising tide of labor unrest mostly hidden from the world's attention. Providing a broad political and economic analysis of this labor struggle together with fine-grained ethnographic detail, the book portrays the Chinese working class as workers' stories unfold in bankrupt state factories and global sweatshops, in crowded dormitories and remote villages, at street protests as well as in quiet disenchantment with the corrupt officialdom and the fledgling legal system.

Against the Law: Labor Protests in China's Rustbelt and Sunbelt

Article

Jan 2008

Preface PART I: DECENTRALIZED LEGAL AUTHORITARIANISM 1. Chinese Workers' Contentious Transition from State Socialism 2. Stalled Reform: Between Social Contract and Legal Contract PART II: RUSTBELT: PROTESTS OF DESPERATION 3. The Unmaking of Mao's Working Class in the Rustbelt 4. Life after Danwei: Surviving Enterprise Collapse PART III: SUNBELT: PROTESTS AGAINST DISCRIMINATION 5. The Making of New Labor in the Sunbelt 6. Dagong as a Way of Life PART IV: CONCLUSION 7. Chinese Labor Politics in Comparative Perspective Methodological Appendix: Fieldwork in Two Provinces Notes Bibliography Index

U N I T E D N AT I O N Livelihood Struggles and Market Reform (Un)making Chinese Labour after State Socialism

Article

Jan 2005

Ching Kwan Lee

Gender and the South China Miracle: Two Worlds of Factory Women

Book

Jan 1998

Ching Kwan Lee

Looks at two Chinese labor sites - hong Kong and Shenzhen. two different work expereicnes; different ways thte job is gendered. Winner Outstanding book Award for ASA.

China's Workers Under Assault: The Exploitation of Labor in a Globalizing Economy

Article

Jul 2002
FOREIGN AFF

The Effects of Market Liberalization on the Relative Earnings of Chinese Women

Article

Feb 2002
J COMP ECON

In this paper, we explore the effects of differences in labor market institutions and the degree of market liberalization on the size and composition of gender wages gaps in China's urban labor markets. We use enterprise-ownership type, enterprise age, and workers' methods of finding employment as proxies for the extent of market liberalization. We find both the size of the wage gaps and the proportion of the gap left unexplained by differences in observed characteristics largest in the most liberalized joint-venture sector and smallest in the least liberalized state sector. We next investigate the effects of differences in the wage structure on the gender wage gaps. We find that differences in the wage structure, in general, and the degree of wage dispersion, in particular, are extremely important in accounting for the larger wage gaps in the joint-venture and collective sectors relative to the state-owned sector. J. Comp. Econ., June 2002 30(4), pp. 709–731. Department of Economics, Bates College, Lewiston, Maine 04240. © 2002 Association for Comparative Economic Studies. Published by Elsevier Science (USA). All rights reserved.Journal of Economic Literature Classification Numbers: Numbers: J16, J31, J71, O15, O53, P23.

Made by Women: Gender, the Global Garment Industry and the Movement for Women Workers’ Rights

Article

Clean Clothes Campaign

Compilation of articles focusing on the “gendered division of labor.” Presents initiatives that address the concerns of women, including how those concerns should be integrated into the work of the Clean Clothes Campaign (CCC).

Fierce, Fair and Unfair Competition THE EU–CHINA TRADE RACE AND ITS GENDER IMPLICATIONS

Recommended publications

Trade Openness and Gender Wage Gap : The Impact of Competition on Sectoral Wage Differences

China's Transition and Feminist Economics

Gender and Equality of Opportunity in China's Labour Market

China

THE EU-CHINA TRADE RACE AND ITS GENDER IMPLICATIONS