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Lean Production and Labor Controls in the Chinese Automobile Industry in An Age of Globalization1

Published online by Cambridge University Press:  15 May 2008

Lu Zhang
Johns Hopkins University


This article explores the changing workplace and labor-management relations in the Chinese automobile industry under the influence of globalization and China's market reform. It depicts the everyday working lives of Chinese autoworkers and the shop-floor dynamics of labor relations based on the author's intensive fieldwork at the seven major automobile assembly enterprises in China during 2004–2007.

The main findings of this paper are that, in spite of the generalized lean production and homogenization of workplace experiences of Chinese autoworkers, two different models of labor controls have emerged in the Chinese auto industry: “lean-and-dual” and “lean-and-mean.” On the one hand, under the lean-and-dual regime, management adopts labor force dualism by using both formal contract workers and agency workers on production lines side by side, which leads to a “hybrid” factory regime that combines both “hegemonic” and “despotic” elements. Hegemonic relations have been established between management and formal workers based on high wages, generous benefits, better working conditions, and relatively secure employment for formal workers, while “despotic” labor control characterizes the conditions for temporary agency workers with lower wages and insecure employment.

On the other hand, the lean-and-mean type of auto firms adopt a high-wage, high-turnover strategy of lean production without the promise of job security to their entire workforce. The interventionist roles of the Chinese central and local states in regulating labor relations and the roles of managerial staff, factory unions, and factory party committees in building hegemonic consent among workers in the auto industry are also explored. The paper concludes by discussing the potentials and limits of Chinese autoworkers and the likely roles they are to play in the evolution of labor relations under China's current market transition and globalization.

Labor in a Changing China
Copyright © International Labor and Working Class History, Inc 2008

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2. China Automotive Technology Research Center (CATRC), Zhongguo qiche gongye nianjian (China Automotive Industry Yearbook) (Tianjin, 2006), 502, 504.

3. See Beverly Silver, Forces of Labor (New York, 2003), Chapter 2.

4. See, among others, Erik Eckholm, “Chinese Warn of Civil Unrest across the Country: Communist Party Document Paints Picture of Discontent,” International Herald Tribune, June 2–3, 2001; “High Cost of Wage Recovery Deepens Sense of Futility in Legal Route, Stirs Up Social Unrest,” China Labor Bulletin, November 10, 2005; Ching Kwan Lee, “Pathways of Labor Insurgency,” in Chinese Society: Changes, Conflict and Resistance, ed., Elizabeth Perry and Mark Selden, (London, 2000), 41–46; Philip P. Pan, “High Tide of Labor Unrest in China,” Washington Post, January 21, 2002; Dorothy Solinger, “Beijing's Number One Worry,” South China Morning Post, February 12, 2005: 11.

5. This research was assisted by a fellowship from the International Dissertation Field Research Fellowship Program of the Social Science Research Council with funds provided by the Andrew W. Mellon Foundation. This research project is still ongoing with support from the Dissertation Improvement Grant of the National Science Foundation. The field research included factory visits; interviews with workers, managers, trade union staff at the factories, and outside factories; and company documentary research. One hundred fifty production workers, thirty managers, and twenty union and party staff were interviewed at the seven auto plants. These seven plants will be called AF1, AF2, AF3, AF4, AF5, AF6, and AF7 for the purpose of confidentiality. However, when publicly available information is quoted, the real names of the companies and plants will be used.

6. See, among others, Feng Tongqing, Zhongguo Gongren de Mingyun: Gaige Yilai Zhongguo Gongren de Shehui xingdong (The Destiny of Chinese Workers: Social Action of Workers Since the Reform) (Beijing, 2002); Mary E. Gallagher, “Grafted Capitalism: Ownership Change and Labor Relations in the PRC,” Paper presented at the Conference on Uneven Transition in China: Reform and Inequality, University of Michigan, April, 7, 2001.

7. Andrew Walder, Communist Neo-Traditionalism: Work and Authority in Chinese Industry (Berkeley, 1986).

8. Lu Xiaobo and Elizabeth J. Perry, eds., Danwei: the Changing Chinese Workplace in Historical and Comparative Perspective (New York, 1997).

9. Michael Burawoy, The Politics of Production (London, 1985); Ching Kwan Lee, Gender and the South China Miracle (Berkeley, 1998); and Theo Nichols et al., “Factory Regimes and the Dismantling of Established Labor in Asia: A Review of Cases from Large Manufacturing Plants in China, South Korea and Taiwan,” Work, Employment and Society 18 (2004): 663–85.

10. For the definition of “factory regime” and the discussion on characteristics of despotic, hegemonic, hegemonic despotism factory regimes, see Burawoy, The Politics of Production, 87, 125, 126, 263.

11. See Theo Nichols et al., “Factory Regimes and the Dismantling of Established Labor in Asia,” 664–5.

12. Greg O' Leary, ed., Adjusting to Capitalism: Chinese Workers and the State (New York, 1998); Anita Chan and Zhu Xiaoyang, “Disciplinary Labor Regimes in Chinese Factories,” Critical Asian Studies 35 (2003): 559–84.

13. In the factory director responsibility system, a factory director was authorized to assume full responsibility for the factory and took on major control of its affairs.

14. Ching Kwan Lee, “From Organized Dependence to Disorganized Despotism,” The China Quarterly 157 (1999): 44–71.

15. In her recent book, Against the Law, Lee demonstrated the different politics of workers' protests in China's Rustbelt and Sunbelt. However, as she noted in the book, her study had left out workers in profitable state-owned enterprises (SOEs), technology-incentive joint ventures, and such more formally regulated employment situations. Ching Kwan Lee, Against the Law: Labor Protests in China's Rustbelt and Sunbelt (Berkeley, 2007), 239.

16. Gergory T. Chin, “Building ‘Capitalism with China's Characteristics’: The Political Economy of Model Joint Ventures in the Automotive Industry,” Ph.D. diss. York University, 2003.

17. The lean production methods were introduced by Japanese carmakers in the 1970s. In the 1980s and 1990s, lean production methods spread globally and are seen by some as having created a fundamentally different post-Fordist production. See discussion in Silver, Forces of Labor, Chapters 1 and 2.

18. The author's interviews with workers at the selected auto companies, September 2006-June 2007.

19. The author interviewed workers and managers at AF1-AF7 between September 2006 and May 2007.

20. Ibid.

21. Chin, “Building ‘Capitalism with China's Characteristics.’”

22. Table 2 is based on the author's interviews with production workers in the summers of 2004 and 2005 and between September and December, 2006.

23. See Silver, Forces of Labor, Chapter 2; Bennett Harrison, Lean and Mean: Why Large Corporations Will Continue to Dominate the Global Economy (New York, 1997).

24. Table 3 is based on the author's visits and interviews with production workers and managers at AF1-AF7 in 2006 and 2007.

25. Chinese Labor Law requires a labor service agency as a legal employer to provide its employees (agency workers) with social benefits. However, due to the dubious regulations on defining responsibilities between a legal employer (a labor service agency) and a real employer (an auto firm for whom the agency workers work), many labor agencies shake off their responsibilities. It is unclear how many agency workers have actually received any benefits. (Interviews with agency workers and management staff at the selected automobile firms in the summers of 2004 and 2005 and September 2006 to May 2007.)

26. See Chin, “Building ‘Capitalism with China's Characteristics,’” 196–202.

27. Both AF1 and AF2 took over some old workers with an open-ended contract from their state-owned Chinese parent companies when they were founded as joint ventures with foreign partners. The former body of AF3 was a state-owned tractor maker built in 1968. AF3 had to carry over a large number of open-end contracts workers when it was incorporated by First Auto Works (FAW) in 1993.

28. Derived from the observation of prewar Fordist automobile production, McPherson explained that the role of high wages in the auto industry was to secure an adequate supply of replacement labor and to obtain a labor force that would submit to the rigors of assembly line production. This was reinforced by the policy of labor rotation. If workers know that they can be dismissed at any time, then the potential loss of employment at high wages becomes a real threat and constraint. The two policies together—high wages and employment security—enforced a high degree of discipline and control in the plants. See John Humphrey, Capitalist Control and Workers' Struggle in the Brazilian Auto Industry (Princeton, 1982).

29. The author's interviews with workers and managers at AF5 in March 2007.

30. Silver, Forces of Labor, 69–73.

31. Formal employees with ten years' service at AF2 may be transferred to the various auto factories of the auto group that AF2 belongs to, but their employment is guaranteed until they reach retirement age.

32. The author's interviews at AF3, June 2004.

33. AF4 recently raised the wages of temporary workers to almost the same (a bit less) as formal workers due to the high turnover rate on the production lines. Temporary workers used to be paid only half the formal workers' salaries for the same work. The author's interviews with temporary workers at AF4 in 2005 and 2007.

34. China's New Labor Contract Law may promise more employment security to Chinese workers. Effective January 1, 2008, the Law stipulates that employment contracts must be put in writing within one month of employment. It restricts the use of temporary laborers and makes it harder to lay off employees. The Law also favors long-term labor contracts instead of temporary pacts that can be easily terminated without full benefits. Some observers say that this time the Chinese government is taking the Law seriously and is willing to enforce mandates to protect workers' rights in part as a response to the country's rising labor abuses and labor discontent.

35. After analyzing the dynamics of capital relocation and labor militancy over the course of the twentieth century in the world automobile industry, Silver suggested a “China hypothesis” with the prediction of China being the next epicenter of strong autoworkers' movements. See Silver, Forces of Labor, 65.

36. For example, Lee proposes a thesis of “postsocialist labor insurgency, “emphasizing the state's capacity to institutionalize a “rule by law.” Blecher focuses on the role of workers' hegemonic acceptance of the core values of the market and the state. Ching Kwan Lee, “From the Spector of Mao to the Spirit of the Law: Labor Insurgency in China,” Theory and Society 31 (2002): 189–228; Marc J. Blecher, “Hegemony and Workers' Politics in China,” The China Quarterly 170 (2002): 283–303.

37. Some workers were even sent by the factory to study at the university, after which they returned to take up positions in management. However, managerial staff are increasingly recruited directly from the university rather than promoted from the shop floor. Interviews, Summer 2004.

38. See Andrew Walder, “Factory and Manager in an Era of Reform,” The China Quarterly 118 (1989): 242–64; Xiaodan Zhang, “Bargaining without Union: Paternalist Labor Relations in China's Reform Era,” (Ph.D. diss., Columbia University, 2005).

39. Feng, Zhongguo Gongren de Mingyun.

40. Anita Chan, “Revolution or Corporatism? Workers and Trade Unions in Post-Mao China,” Australian Journal of Chinese Affairs (1993): 31–61; Jeanne L. Wilson, “The People's Republic of China,” in Alex Pravda and Blair A. Ruble, eds., Trade Unions in Communist States (Boston, 1986).

41. The author's interviews with autoworkers during the summers of 2004 and 2005, September 2006, and May 2007.

42. Field notes at AF3 in summer 2004.

43. The author's interviews with the factory party committee leaders at AF2 in June 2004.

44. See, for example, Ching Kwan Lee, “From Organized Dependence to Disorganized Despotism,” 44–71; Dorothy Solinger, “The Chinese Work Unit and Transient Labor in the Transition from Socialism,” Modern China 21 (1995): 155–83; and Greg O' Leary, ed., Adjusting to Capitalism: Chinese Workers and the State (New York, 1998).

45. The rank and sales data were cited from CATRC, Zhongguo qiche gongye nianjian 2006, 609, 625, 627, 647, 649, 660.

46. Eric Harwit, “The Impact of WTO Membership on the Automobile Industry in China,” The China Quarterly 167 (2001): 655–70.

47. The author's field notes, October 2006.

48. For the detailed discussions on sources of workers' bargaining power, see Silver's introduction to Forces of Labor.

49. It is understood that there is not a strict correspondence between workers' bargaining power and the actual use by workers of that power to struggle for better working and living conditions.

50. The author's interviews at AF4 in March 2007.

51. On the impact of the “product cycle” on labor-capital relations, see Silver, Forces of Labor, Chapter 3.

52. Piven, Frances Fox and Richard A. Cloward, “Power Repertoires and Globalization,” Politics and Society, 28 (2000): 413–14.

53. Silver, Forces of Labor, 16.

54. Ching Kwan Lee, “From the Spector of Mao,” Theory and Society 31 (2002): 189–228; Against the Law: Labor Protests in China's Rustbelt and Sunbelt (Berkeley, 2007); Elizabeth J. Perry, “From Paris to the Paris of the East and Back: Workers as Citizens in Modern Shanghai,” Comparative Study of Society and History April (1999): 348–73.

55. Ching Kwan Lee, Against the Law: Labor Protests in China's Rustbelt and Sunbelt (Berkeley, 2007).