I Introduction
The employer provided everything – wages, housing, post office, parks, canteens. Such a model of the “company town,” where a single corporation dominates in multiple capacities as employer, landlord, service provider, and quasi-regulator over a dwelling area, has endured across borders and time. The term can portray textile mills in eighteenth-century England or coal and steel towns in early twentieth-century America just as fittingly as it does today’s network of “supply chain cities” that span East and Southeast Asia and beyond. Unlike the old towns of the industrializing West, which largely served a single, vertically integrated conglomerate, today’s factory towns are transboundary, interconnected, and designed to take advantage of various legal regimes, most notably trade, tariff, investment, and labor laws. Built to settle workers around job sites such as mills, mines, or factories, these manufacturing industrial parks manifest an evolving, expansive exercise of corporate power – once confined to national boundaries, now at once local and transnational thanks to the demands of global supply chains.
This chapter conceptualizes Inter-Asia’s supply chain cities as modern company towns. In particular, it studies manufacturing sites in East and Southeast Asia and their business and legal links. More than just towering physical spaces, these sites represent a form of legal entrepôt – created by law and capable of shaping laws and norms through diverse pathways, including regulatory fragmentation and coordinated advocacy. In comparison with another gilded-age moment of industrial development – early twentieth-century United States (US) – these modern company towns exemplify the uniqueness of Inter-Asia’s corporate forms, exercise of power, and regional integration.
II A Brief History: From Classic Company Towns to Supply Chain Cities
A. The Classic Company Towns
If “seeing like a state” was about the statecraft of rendering societies’ complexity into “legible” patterns in the name of bureaucratic administration,Footnote 1 company towns are, arguably, the craft for seeing and planning like an industrialist. Two key features set them apart from other towns and enterprises. First and foremost, the raison d’être of company towns was, and is, economic activities – as one scholar puts it, they are “physical expressions of economic enterprise.”Footnote 2 Second, company towns facilitated an expansive corporate control order that spread through and blurred the lines between work and personal space, enabled by the corporation’s multifaceted role – most visibly as employers, but also as landlords, property owners, and quasi-regulators of the town’s life. Functionally, as explored elsewhere, this corporate control order manifested through at least three mechanisms: the physical link between workplace and housing; the financial link between workers’ wages and rent; and heavy monitoring of private activities. Each represents, in turn, physical control, resource constraint, and social and moral control.Footnote 3 As we shall see, these key features have translated well into the business model of modern factory towns, despite very different settings.
Classic company towns, such as those that emerged during the Industrial Revolutions in the West, are broadly defined as “communities dominated by a single company, typically focused on one industry.”Footnote 4 This domination started in the towns’ very names, often eponymous to the particular companies or entrepreneurs (most often men) that founded them.Footnote 5 Beyond a general definition, however, company towns were as diverse as their industries, designs, locations, and their founders’ ethos. Resource-extraction towns supporting coal mining and metal ores often sprang up from scratch in remote areas, necessitated by the need to stay close to natural resources.Footnote 6 Towns in lighter manufacturing industries such as textiles might have begun as small settlements that then expanded alongside a growing corporation that served as each town’s primary employer.Footnote 7 Either way, it was critical for housing to locate near the worksite, especially in remote locations, to attract and retain labor, reduce turnover, and maximize efficiency.Footnote 8
It was this peculiar arrangement – where work lives and private lives were deliberately, physically entwined – that defined the towns. Companies would build not only housing but also stores, parks, roads, churches, and medical clinics. Many strived to cultivate the image of “a working family’s paradise,” complete with public amenities and social programs.Footnote 9 Benevolent motives aside, business owners certainly had ample incentives to keep workers content.Footnote 10 Towns with on-site amenities and a sense of community created through social groups and religious services were better able to attract and retain workers to an otherwise unattractive hard-labor life.Footnote 11 Providing robust activities and entertainment to keep workers on-site also lowered the risk of off-site temptations, consistent with the paternalistic attitude that companies held over their workforce.Footnote 12 More broadly, social control was part of industrial capitalism’s ideals of the virtuous worker: “Early to bed, early to rise, makes a man healthy, wealthy, and wise.”Footnote 13 In this vision of corporate paternalism, running a business came with moral and economic responsibilities. By advocating for “industrious virtues” such as thrift, diligence, and obedience, corporate owners argued that the enterprises were safekeepers of not only industrialist productivity but also the larger social project of eradicating vice.Footnote 14 Corporate regulations, enforced through the physical insulation and architecture of company towns, were deemed critical to improve workers’ welfare, both for their own and for societal goods.Footnote 15
In their heydays, company towns’ physical architecture, so comprehensive in its fusion of capitalist efficiency with labor management, thus exemplified legal scholars’ conception of “infrastructure as regulation” – that is, spatial constructions that shaped behaviors and created social ordering.Footnote 16 As we will see below, this feature has remained constant even as the business model of company towns globalized and adapted.
B. Company Towns Go Global
By the 1950s, traditional industrial towns had slowly receded in the US due to a confluence of colliding forces.Footnote 17 The development of cars and railroads, changes in technology, and new, robust state and federal regulations in response to the Great Depression all contributed to what became known as the beginning of America’s great deindustrialization.Footnote 18 But as company towns started to phase out in the West, globalization enabled their reincarnation abroad as manufacturing outposts, first mainly catering to Western economies. An early example – and a spectacular failure – was Ford Motor Co.’s establishment of the Fordlandia rubber plantation in 1920s’ Brasilia.Footnote 19 Modeled after Ford’s flagship plant in Dearborn, Michigan, Fordlandia featured an extensive compound built amidst isolated nature and a similar system of control over local workers, including whistles, time-punch clocks, and routine investigations.Footnote 20 Fordlandia’s eventual abandonment stood in history as an expensive lesson on multiple fronts: a failed attempt to export Ford’s famed assembly line to a jungle ecology, the complexity of going multinational, and the politics of bringing “white man’s magic” to other parts of the world.Footnote 21 Relevant to this chapter, it also epitomizes the challenges of attempting to exercise corporate control over an increasingly intricate global production process. As detailed in the next section, critical for modern company towns in Inter-Asia, that task was soon outsourced to a new crop of companies, who took over not only the human management of supply chains, but also the legal and economic arbitrage of structuring global production itself.
III Inter-Asia’s Company Towns
This part conceptualizes today’s “supply chain cities,” prolifically built in Asia, but also popular elsewhere, as modern reincarnation of the old company town model. At first blush, this may seem an unintuitive comparison. The fundamental qualities – the time and space, the companies, the states, the products, and the production process – have all changed. Yet, from Pullman, Illinois, to Foxconn’s “iphone city” in Shenzhen, China, the “keywords” remain starkly similar: economic productivity, labor–capital tension, corporate control. Such similarity, as I have argued elsewhere, is not a coincidence but the result of a global economic integration process that prioritizes efficiency and large-scale productivity.Footnote 22 Put differently, the company town business model, then and now, facilitates a mode of capital accumulation and labor management that caters to industrial development.
To be sure, factory towns of the present operate in a very different world from the past. Instead of textile mills and coal mines, modern industrial towns, especially in Asia, specialize in distinct functions of their industries, ranging from labor-intensive tasks such as part assembly and packaging to high-value technology-related manufacturing. Unlike the old industrial towns of the West, which largely served single, vertically integrated corporations, modern factory towns, as demanded by global supply chains, are transboundary, interconnected, and designed to take advantage of various legal regimes, most notably trade, tariff, investment, and labor laws. This part explores some of the critical features that pave the way for Inter-Asia’s company towns: the rise to prominence of transnational suppliers, the proliferation of special zones, the creation of modern industrial towns, and the horizontal networks across Inter-Asia’s supply base.
A. Rise of Transnational Suppliers
The gravitation toward a “made in the world” manufacturing modelFootnote 23 paved the way to the rise of a largely hidden new crop of multinational enterprises – which I call “Big Suppliers.”Footnote 24 By Big Suppliers, I refer to large-contract manufacturing corporations, public and private, with presence in multiple jurisdictions, whether through subsidiaries or contracting networks.Footnote 25 Though not always, they tend to be headquartered outside of Global North economies, most dominantly in Asia, as a product of outsourcing trends, trade regulations, and individual nations’ industrial policies.Footnote 26 As brands and retailers in the US, Europe, and elsewhere divested, their foreign-based contracting partners increasingly scaled up and consolidated to meet the complex demands of global production.Footnote 27 When each part of a product might come from different countries and even different continents, control, coordination, task management, and compliance were critical to ensure a smoothly run supply chain.Footnote 28 This, in turn, spurred demands for a professional logistics industry capable of the herculean tasks of optimizing complex cross-border processes.
Transnational suppliers thus emerged as a new, quiet crop of corporate powers, whose presence transformed the economic and legal organization of global trade.Footnote 29 By virtues of size and scale, they sit atop a robust global supply base spanning Asia, Latin America, and beyond.Footnote 30 As laid bare by the COVID-19 pandemic, this global supply base, while transboundary and expansive, is also concentrated, both geographically to a small number of key countries and economically to a small group of key firms.Footnote 31 Well-known examples include Foxconn, the world’s largest electronics contract manufacturer; the Taiwan Semiconductor Manufacturing Company (TSMC), the world’s biggest semiconductor manufacturing foundry, known for its ability to make the most advanced nanochip; TAL Apparel, which produces one out of every eight dress shirts bought worldwide; Luen Thai, a textile conglomerate; Yue Yuen, the world’s largest manufacturer of athletic shoes; and Li & Fung, the world’s biggest apparel trading house, once called “the most important company that most American shoppers never heard of.”Footnote 32
Transnational suppliers’ quiet rise to prominence in a highly interdependent system has resulted in a relative shift in the locus of power in global supply chains, long assumed to be dominated by Western brands.Footnote 33 Relevant to this chapter, they are also the employers of modern company towns, having taken over the tasks of manufacturing and labor management. Like the corporate giants of the past, they act at once as employers, landlords, and quasi-regulators to manage the employment, housing, mobility, and social lives of millions of workers whose labor sustains global consumption. As argued elsewhere, the emergence of these companies has implications for a suite of public and private law issues, including cross-border contracts, corporate social responsibility designs, trade regulations, private regulatory functions, and more.Footnote 34 Before turning to transnational suppliers’ management of modern industrial towns, it is first helpful to understand the type of law-made soil on which these towns stand – the special economic zones (SEZs).
B. SEZs
Special economic zones, at a fundamental level, are a form of regulatory laboratories – aptly defined as “demarcated geographic areas contained within a country’s national boundaries where the rules of business are different from those that prevail in the national territory.”Footnote 35 Their history dates back to the Roman Empire, whose authorities bestowed free trade–like conditions on ports and islands to encourage trade.Footnote 36 Early SEZs included European colonial outposts such as Macau and Hong Kong, as well as China’s numerous “treaty ports,” through which it ceded territories and granted broad concessions to Western powers in the aftermath of the Opium Wars.Footnote 37 In the 1970s and 1980s, SEZs were catapulted to holy grail status thanks to several highly successful utilizations, first by the “Asian Tigers” economies, then by the People’s Republic of China as part of Deng Xiaoping’s “Open Door” policy.Footnote 38 Urged on by a coalition of national governments, private sectors, and international organizations hoping to replicate such successes, other developing countries quickly seized on the model, resulting in a rapid spread of SEZs around the globe.Footnote 39 Though widespread, zone distributions are highly concentrated, both in geography and in economic activities. Nearly 90 percent of the world’s SEZs are located in developing nations, with China hosting nearly half and a substantial number spreading across East and Southeast Asia.Footnote 40
Functionally, SEZs allow states to move beyond the old economic wisdom of national competitive advantage to create modern one-stop-shop “location-specific advantages.”Footnote 41 The goal, as made clear by policymakers, is to create more liberal, effective business environments, insulated from the larger national context, in order to attract foreign investments and boost economic development.Footnote 42 Common regulatory incentives include preferential customs duties and taxes; streamlined administrative procedures; and one-stop integrated offices to ease compliance.Footnote 43 Benefiting from SEZs’ well-defined spatial boundaries, states may also test controversial policies such as land auctions, wholly foreign-owned companies, or labor market liberalization, without having to commit to large-scale changes.Footnote 44 Legal and regulatory learning was well documented among states, for example, Vietnam and Ethiopia in emulating mainland Chinese and Taiwanese experience.Footnote 45
C. Special Towns
Modern company towns retain key vestiges of the old model – large-scale economic activities, comprehensive infrastructure planning, and tight control over workers’ lives – but operate in a vastly different context. Thanks in part to transnational suppliers’ rapid expansion, modern factory towns no longer resemble the old model’s discrete islands of economic activities. Instead, they belong to transnational networks operating at different nodes of global production, strategically located to take advantage of trade, tariff, and other favorable laws. Much has been written about the meticulous infrastructure planning, extensive control, and labor plights in modern factory cities, most infamously Foxconn’s “forbidden iPhone city” in Longhua.Footnote 46 This part focuses instead on a different facet, that is, the roles of supply chain cities as innovation hubs in advancing both business norms and certain quasi-public functions.
On advancing innovative business norms, consider, for example, the Luen Thai Liz Claiborne facility in Dongguan, China. Luen Thai, a Hong Kong–based apparel manufacturer, first experimented with supply chain cities in 2007, on the heels of the expiration of the Multi Fiber Agreement (MFA) – a multilateral regime that carved out special quotas for trade in textiles from 1973 to 2005.Footnote 47 By imposing country-specific quotas on textile exports by developing countries, the MFA contributed to a proliferation of supply bases around the world, and its end brought about a consolidation of the apparel supply chains.Footnote 48 With Liz Claiborne’s backing, Luen Thai relocated the raw material suppliers and product manufacturers into one mega-factory located in Dongguan, in the province of Guangdong – known for its convenient transportation access.Footnote 49 From there the company built a campus comprised of product development centers, factories totaling 2 million square feet, a 4,000-person dormitory, a movie theater, gyms, hotels, and showrooms for visiting clients.Footnote 50 All parties follow a highly standardized scan-and-track inventory system to allow goods to move seamlessly across production stages and from the factory floors into Liz Claiborne stores in the US and elsewhere.Footnote 51 “A buyer, a marketer, a brander from the [United States] can go to Supply Chain City and never have to leave the complex,” explains Luen Thai’s US president. “They can make their samples, they can buy their fabrics, they can do everything they want under one roof.”Footnote 52 Luen Thai’s restructuring resulted in a corresponding change at Liz Claiborne, which at the time sourced from over 250 suppliers in thirty-five countries.Footnote 53 The retailer started to consolidate its supplier base and relocate its designers from Hong Kong, New York City, and elsewhere to the Dongguan complex so that they could closely collaborate with Luen Thai’s technicians from the factory and fabric mills.Footnote 54 The one-stop-shop, comprehensive nature of Luen Thai’s industrial site thus fosters collaboration, information sharing, and innovation – an arrangement that mirrors the “technology cluster” concept of high-tech locales like Silicon Valley.Footnote 55
Equally significant, corporate functions in modern factory towns can extend well beyond commercial activities – a phenomenon amplified by the COVID-19 pandemic. In the 2019–2021 period, as the pandemic traveled around the globe, transnational suppliers, as operators of supply chain cities, took on surprising and dramatic roles as providers of public health and pandemic response, even as diplomats to secure scarce vaccines. In Vietnam, for example, after waves of COVID-19 outbreaks, electronic factories turned to a model of “sleepover manufacturing” to insulate workers from infections, greenlit by a national leadership anxious to keep the country’s reputation as a supply chain rising star.Footnote 56 Pou Chen – Yue Yuen’s Vietnamese subsidiary – advanced its own contact tracing, testing, and medical reporting system,Footnote 57 while Samsung Vietnam provided free dormitories and food to encourage workers to stay within its industrial park.Footnote 58 When COVID-19 inevitably reached the factory floors, these suppliers, sanctioned by regulators, turned their plants into quarantine space, where thousands of workers spent time away from their families isolating in clusters.Footnote 59 This was an exception to Vietnam’s highly rigid regulation that COVID exposures were subject to mandatory quarantine in military-operated camps.Footnote 60 Suppliers also mounted fierce lobbying efforts to prioritize factory workers for vaccine eligibility.Footnote 61 In Taiwan, in an extraordinary development, Foxconn and TSMC took on diplomatic and political roles as they represented the Taiwanese government in its negotiation to purchase COVID vaccines directly from BioNTech.Footnote 62 By outsourcing the negotiation to its two most powerful companies, Taiwan was able to sideline a conflict with the People’s Republic of China, which insisted that Taiwan needed to wait for vaccine distribution from the central government, just like other Chinese provinces.Footnote 63 In Vietnam, suppliers also played critical roles in securing vaccine supplies for their workforce early in the pandemic, spurring a heated public debate on vaccine equity.Footnote 64 In their defense, these enterprises argued that the infrastructure of their industrial sites acted as built-in regulation for vaccine compliance and should be prioritized both for public health and economic reasons.Footnote 65 To be sure, the desire to maintain production, at a time when global supply chains became heavily scrutinized, factored into these governments’ delegation of critical foreign policy and public health functions to transnational suppliers.Footnote 66
D. Horizontal Networks
Distinct from past company towns, a key feature of today’s manufacturing sites in East and Southeast Asia is their deep links as part of a global supply base. This phenomenon arose well before the COVID-19 pandemic and subsequent geopolitical changes, thanks in part to transnational suppliers’ history of expansion. In labor-intensive textile and footwear industries, for example, as the cost of living rose in China, major suppliers such as TAL Apparel and Yue Yuen sought out manufacturing bases in labor-rich Southeast Asia and South Asia, with a high concentration in Vietnam, Indonesia, and Cambodia.Footnote 67
Changing geopolitics and post-pandemic reordering have accelerated at least two trends: efforts to reindustrialize Global North economies and pressure to divert manufacturing out of China into other manufacturing bases. The latter has spurred a new wave of factories and industrial clusters in Southeast Asia and South Asia as suppliers attempted to hedge unstable geopolitics and legal uncertainties. Apple, for example, has announced plans to move some of its core production operations to India and Vietnam, triggering its “Big Three” suppliers – Foxconn, Luxshare, and Goertek – to set up subsidiaries, secure land leases, and announce construction plans in these destinations.Footnote 68 In the textile and apparel industries, the passage of the Uyghur Forced Labor Prevention Act and other sanctions has driven brands to seek out alternative cotton resources, effectively creating new demand for labor and cotton plants in Pakistan, Bangladesh, and India.Footnote 69
Inter-Asia’s supply base is not catering to Western brands alone. Homegrown brands from China and Southeast Asia are increasingly a driver of the region’s growth and economic integration. Chinese EV manufacturer BYD, for example, recently announced a $1.3 billion investment in new manufacturing facilities in Thailand and Indonesia, to be completed by 2026.Footnote 70 Vietnam’s EV brand VinFast has announced a $1.2 billion investment in Indonesia for an assembly plant, further underlining the attractiveness of Indonesia as a manufacturing base for the EV industry.Footnote 71
As a result, new factories and industrial clusters are being created across Inter-Asia. Efforts to divest from China have, in essence, strengthened the region’s interdependence as Chinese suppliers seek nearby offshore locations to restructure their own supply chains. This flexibility in supply chain architecture underscores the key difference between today’s global supply base and past company towns. Instead of the old model’s discrete islands of economic activities, today’s factory towns are part of a transnational, cross-boundary network that can coordinate, share legal and business practices, and learn from one another in the face of uncertainties. The next part explains some of these dynamics by turning to the concept of infrastructure sites as “legal entrepôts.”
IV Inter-Asia’s Company Towns as Legal Entrepôts
Entrepôt is derived from the French words entre (among, between) and poser (to place).Footnote 72 Historically, the term referred to warehouses and shipment centers, where goods were deposited as part of trade flows.Footnote 73 More broadly, like a gateway or a port, an entrepôt is a physical place in-between, connecting local commerce with the wider world, providing a space for processing, documenting, and organizing the migration of goods and people.Footnote 74 Borrowing from this concept, a legal entrepôt is legal in two ways. First, its nature is legal in that it is law-made, designated as a cross-border entrance by the relevant authorities from which it derives legitimacy. In this sense, any official port, SEZ, or factory town is necessarily a law-made space, sanctioned by law and created with specific policy goals, often to encourage regulatory and economic experiments without having to commit to large-scale change.Footnote 75 Indeed, scholars have argued that these specially designated spaces represent a regime of capitalist “micro-ordering” – that is, “political arrangements at a small scale,” separate from the structure of the nation-states.Footnote 76
Second, equally noteworthy, the concept of a legal entrepôt underscores how laws and norms, like other commodities, flow through and are shaped within the physical space. When transnational suppliers operate supply chain cities that resemble past company towns, how they organize their buildings, factory floors, and work shifts becomes the de facto regulation of significant aspects of individual lives. As transnational suppliers often operate in “regulatory laboratory” spaces such as SEZs with more leeway given to local authorities and private actors, their roles in private governance are especially pronounced. The first example below, on regulatory fragmentation through production lines, illustrates the power of suppliers in taming regulations by “splitting” production lines. Yet, the transboundary, porous nature of global supply chains, while facilitating the extraterritorial reach of corporate private governance, can also present new opportunities for transnational solidarity among workers across disparate supply bases. The second example, on efforts to coordinate labor actions, exemplifies transnational advocacy that leverages the very nature of business-friendly global supply chains (admittedly in a limited way) for labor causes.
A. Regulatory Fragmentation
Regulatory fragmentation refers to a phenomenon in which a transnational supplier, by virtue of its control over dispersed industrial sites, can choose to “fracture” its production lines to comply with stringent standards only where required. Take, for example, Yue Yuen’s operation model of customer-specific production lines. A major athletic footwear manufacturer, Yue Yuen is the main supplier for Nike, Adidas, Reebok, and other brands.Footnote 77 As one of Nike’s major suppliers, Yue Yuen became embroiled in the anti-sweatshop campaign against Nike during the late 1990s, including major exposés on its factories in Vietnam.Footnote 78 In the aftermath, Nike became an early adopter of corporate social responsibility, with some of the most stringent standards on workers’ rights in the industry.Footnote 79 As a supplier to multiple brands, Yue Yuen increasingly needs to comply with not only varying manufacturing specifications but also a variety of codes of conduct and labor and safety standards. Yue Yuen organizes its production lines according to specific merchandisers, producing specific items in batches.Footnote 80 As a result, Nike’s more stringent labor standards are effectively “quarantined” within its own production line. Meeting the more stringent requirements for a customer like Nike does not necessarily result in positive spillover effects on Yue Yuen’s other processes.Footnote 81
Solar suppliers utilize the same tactic when faced with US import sanctions regarding polysilicon – a critical component for photovoltaic cells that make up solar panels. The Xinjiang Autonomous Region in Northwestern China is home to four of the five largest polysilicon factories in the world.Footnote 82 In 2021, President Biden signed into law the Uyghur Forced Labor Prevention Act, which creates a rebuttable presumption that imports from Xinjiang – polysilicon included – are made with forced labor unless importers can produce “clear and convincing” evidence demonstrating otherwise.Footnote 83 In a concerted move, US Customs and Border Protection, which, in addition to immigration, is also in charge of the admission of goods into the US, issued a series of “withhold release orders” to detain solar components suspected of being “tainted” with Xinjiang labor.Footnote 84 In response, solar component manufacturers have started “splitting” their production lines, with dedicated “clean” lines – that is, clearly free of Xinjiang inputs – slated for export to the US.Footnote 85 By an example, Jinko Solar, a solar module manufacturer headquartered in Shanghai, is reportedly ramping up its Xinjiang-free production in Vietnam to serve the US market, noting that it is only using German and US polysilicon for these production lines.Footnote 86
B. Supply Chain Solidarity
The transboundary, porous nature of global supply chains, while facilitating the extraterritorial reach of corporate private governance, also presents new opportunities for transnational solidarity. As the examples below demonstrate, thanks to the interconnectedness of global production, strategic coordination is possible among workers who might be in different countries or industries but are linked through the global supply base.
The prime example so far has been in Europe rather than Asia: the coordinated strike against Tesla by Scandinavian workers, first started in October 2023 by four Swedish technicians.Footnote 87 Since then, thousands of workers across countries and industries have joined in, including Norwegian and Finnish port workers, Danish truck drivers, as well as Swedish postal workers, cleaners, and garbage collectors who declined to service Tesla offices.Footnote 88 While Northern Europe is a relatively small market, these labor actions have garnered attention across the globe as a renewed form of transnational solidarity that capitalizes on the very business-friendly nature of global production and strikes at key nodes of supply chains.Footnote 89
The coordinated strikes against Tesla are reminiscent of earlier efforts by Asian supply chain workers in China and Vietnam against shoe giant Yue Yuen. In 2014, in what turned out to be one of the largest industrial strikes in Chinese history, 40,000 workers from multiple Yue Yuen factories in Dongguan, China, took to the street to protest the company’s failure to pay worker benefits.Footnote 90 It started with a single worker at a Yue Yuen factory in Dongguan, who, in seeking compensation for a workplace injury, learned that the shoe giant had failed to contribute to workers’ social insurance funds.Footnote 91 Within a week, the strike had spread to 1,000 workers; within two weeks, an estimated 40,000 workers from all seven of Yue Yuen factories in the region had joined in – marking a rare regional effort.Footnote 92 The unusual size, length, and reach of the unrest triggered a violent response from local authority.Footnote 93 By the end of the month, most workers accepted a settlement and returned to work.Footnote 94 Without the counterweight of an independent union, the massive strike, like a wave, surged but then dissipated without long-lasting gains for Chinese workers.Footnote 95 Even then, the legacy of the Yue Yuen strikes prompted the central government to announce an investigation into Yue Yuen’s books and records, eventually resulting in a $90 million settlement to replenish its social insurance and workers’ housing funds.Footnote 96
In Vietnam, strike coordination can happen not through workers but, perhaps somewhat ironically, through business and political networks. To avoid competition, employers in the same industrial clusters – especially East Asian companies from Taiwan, Japan, and Korea – often coordinate on wage rates and workers’ benefits.Footnote 97 A successful strike that raised wage rates would thus impact the equilibrium of the entire industrial zone and even region. To maintain stability and discourage further strikes, provincial union officials often inform their counterparts in neighboring zones and provinces about the successful strike and the resulting new wage rates.Footnote 98 They may even advise employers to engage in preemptive negotiations, rather than waiting for workers’ reactions, which may halt production and cause missed deadlines.Footnote 99 In effect, through business and political networks, local officials in Vietnam have informational advantages regarding strike activities, allowing them to act as a kind of broker to set the bargaining terms and preempt potential conflicts. This practice is certainly not labor-led negotiation. But it still represents a way in which the interconnected nature of industrial zones and supply chains can be leveraged for higher wages, albeit tamed through political and business interests.
V Conclusion
Inter-Asia’s company towns are both starkly similar and different to the old model. Now and then, these manufacturing clusters are the physical manifestation of the capital accumulation and labor management that cater to and facilitate industrial development. Then and now, they reflect the expansiveness of private governance. But unlike past models, today’s modern factory towns are transboundary and interconnected as demanded by global supply chains, as part of their designs to capitalize on legal and economic advantages across borders. The horizontal links among Inter-Asia’s industrial clusters facilitate their roles as legal entrepôts – made by law and capable of shaping laws. While suppliers’ locational advantages enable regulatory fragmentation through practices such as supply chain splitting, modern factory towns’ interconnectedness can also open up opportunities for learning and coordination among workers who are linked through regional supply chains. As changing geopolitics create new, rapid demands for industrial sites in Asia and beyond, this volume chapter thus offers a timely, if limited, study on the pathologies of and perhaps even hopes for Inter-Asia’s modern company towns.
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