Abstract

This paper finds evidence that trade imbalances, in either direction, correlate to income inequality within the nations involved in trade. This evidence supports the thesis that global imbalances also result in domestic imbalances and that there are no clear winners and losers to trade imbalances, at least at the national level.

Key Words: International Trade, Income Inequality, Trade Surplus, Trade Deficit

Introduction

The cross-national sale of resources, finished goods, and services to consumers interconnects almost everybody in the world. Global trade has become essential since it allows us to purchase low-priced products from abroad, resources to cut costs, and products that are not domestically available. This means that production or economic activity within one country affects the economies of its trading partners. The emergence of free trade further simplifies the accessibility of internationally produced products. It allows various countries to expand their markets, reduce production costs, provide domestic and international customers with variety at low cost, and utilize specialized skillsets to increase productivity and sales.

Opportunities from free trade may reduce the income disparity between countries since the average income of developing nations rapidly increases.  The opposite may happen for income disparity within nations (income inequality), which has been progressively worsening around the world.  Around 71 per cent of the worldwide population lives in countries where inequality has risen (United Nations, 2022).  The NAFTA agreement of 1994 is an example of a trade agreement which caused rich households’ incomes in the US to nearly double from 1.3 percent to 2.3 percent within six years while poor/marginal households saw no substantial increase in their incomes.

The availability of low-cost labour internationally reduces the opportunities in the domestic economies of higher income nations since firms seek low-cost labour abroad to reduce production costs and maximize profits. This means that free trade forces domestic workers to compete against workers from countries with low labour costs forcing them to choose between low wages or unemployment. For example, Gourdon et al (2008) found that trade liberalization, measured by decreases in tariff revenue, is associated with increases in income inequality, especially in poor countries where the share of the labour force with little education is high. The evidence suggests that income inequality is exacerbated for lower income workers in the nations on both ends of international trade. Meanwhile, highly-skilled and higher income labour benefit from free trade since they can reduce production costs and their skillset is domestically irreplaceable. This increases their income and therefore likely increases their political influence.

Income inequality has adverse effects on societies. The affordability and access to essential services such as education and healthcare can reduce, causing standards of living for the poor to fall. This is seen in form of higher infant mortality rate and female mortality rates in the lower-income groups.  Moreover, there is also a correlation between the extent of income inequality and the crime rates, especially among the poor, across various countries (Fajnzylber et al, 2001).

The World Inequality Report states that the richest people, who make up 10% of the population, earn about 52 per cent of the total income. In contrast, the poorest earn only 8 per cent. On average, that is $122,100 versus $3,920 (Chancel et al, 2022). 

The thesis of this paper is that trade imbalances, in either direction, result in increased income inequality within the nations involved.  This may occur because the wealthy in one country are unable to spend their income domestically and therefore end up importing capital goods (investments) and consequently forcing the country into exporting goods and services (a current account surplus).  At the other end, their trading partner may be cornered into producing more debt (to export as capital goods) than they would otherwise generate, and meanwhile under-producing goods and services.  The workers who would be producing these goods and services therefore suffer and income inequality widens in the current account deficit country.

We take a new approach to exploring these relationships by measuring correlations between income inequality and trade balances and find defence for our thesis.  We use a dataset from the World Bank Development Indicators collection. 

Methods

For income inequality we use the Gini index.  For trade imbalances, we use current account balance. The World Bank Development Indicators dataset includes data from 1960 to 2020.  To prevent anomalies and errors in future calculations, we omitted countries with minimal to no data and ensured that this remained constant in both matrices. 

Results

For the data overall, there is a highly significant negative relationship between current account balance and Gini coefficient (t = -6.35, p < 3e-10).  That is, globally, nations with a current account deficit are more likely to suffer from greater income inequality domestically.  However, these results may conceal what happens at the other end of the spectrum to countries with high current account surpluses.  Therefore we looked at individual country statistics, as well.  Table 1 provides the most significant country level results for countries with trade deficits.  These results confirm that trade deficits are generally associated with higher income inequality.

Table 2, however, provides the results for countries that have the highest current account surpluses.  Indeed, the opposite effect is found.  Many of the countries with the highest current account surpluses have highly significant positive relationships between their current account balance and their Gini coefficients.  In this case, these countries develop worsening domestic inequality as their current account balance increases. Essentially, this means that trade imbalance both ways can increase income inequality within a country.

Discussion

A trade surplus occurs when a country’s exports exceed its imports. Simply put, a country sells more than it buys. In theory, countries that export more seek to reduce their production costs. They can achieve this by either reducing the wages or outsourcing their operations. However, this can have adverse effects since lower wages reduce the affordability of workers, causing the gap between the rich and the poor to increase. Outsourcing labour means that there will be reduced employment in the domestic country, which again leads to reduced income and affordability.

An example is Germany, which has experienced a trade surplus for over a decade. However, their households have decreased spending due to loss of income, primarily to the government sector. The German government resorted to tight fiscal policies, among other measures, to keep their trade surpluses high.  This led to greater inequality (seen in the 0.911 correlation of trade imbalance to income inequality), the highest of any nation in the dataset. 

One result from Table 2 that was unexpected is China. China is known worldwide as a country that manufactures and exports. In line with that, China’s trade surplus of 97.94 billion USD in June 2022 from 50.14 billion USD in the same month a year earlier bet the market forecasts for surplus of 75.7 billion USD. Moreover, China also has a Gini coefficient of 0.47, marking the income inequality in the country relatively high. Hence, China’s situation, paired with its weak correlation between both factors, brings us to an interesting question of why China’s income inequality, despite China being an export rich country, is not based on its trade imbalance. This mismatch could be due to lack of data from China or other influencing factors of income inequality beyond the scope of the dataset used for this paper.

A trade deficit occurs when a country’s imports exceed its exports. Countries that spend more than they earn fall behind on their budget, which pushes them to either let foreign bodies invest in their assets or borrow from other countries or international funding bodies. When these debts increase, they start pressuring the currency of the country. Moreover, deficits can also hurt the employment opportunities in the country since low exporting means that domestic goods sell less abroad. More importing also means that domestic goods are consumed less even within the country, further reducing job opportunities. However, it is also important to note that a trade deficit doesn’t necessarily mean low economic growth. Prime examples of this would be the United States, which has a trade deficit but a high functioning economy and Germany, which has a trade surplus but low economic growth. 

Among the countries with a relatively strong negative correlation in Table 3, Iceland stands at -0.835. It also has a T-score of -5.47, showing the differences within the data set, and a p-value of 0.000106205, which confirms that the relationship obtained is not on chance. This country is an interesting example of the relationship between the two factors since Iceland has a Gini coefficient of 26.1, making it among the top 10 countries with the lowest income inequality. Similarly, Iceland’s trade deficit makes up 6.83% of its GDP, which is lower than a few of its past years. Hence, Iceland’s data shows us how the decrease in trade deficit leads to lower income inequality, making it a unique example in the dataset.

In table 1, the United States has a trade deficit but has a weak negative correlation with income inequality. Its trade balance makes up a relatively small part of its GDP, unlike China, and the Gini coefficient for the United States is 0.485, which is relatively high. These facts, when compared to the weak negative correlation (0.527) for the United States, can be explained since income inequality in a developed economy like the USA with a high GDP can be heavily influenced by various factors. However, a correlation, despite trade not being an essential part of the US economy, helps support the hypothesis of the relationship between income inequality and trade imbalances. The p-value of 0.0019 further supports this since a low score indicates the lack of chance of occurrence.

Conclusion

The main conclusion of this paper is that there is a relationship between income inequality and trade imbalance in either direction, that is that this holds for both trade surplus and trade deficits. For trade deficits, there are cases where low inequality is supplemented by a decreasing trade deficit, like Iceland, going closer to trade balancing. An increase in trade deficit can also lead to increased income inequality. Similarly, trade surpluses can cause income inequality differently since exporting reduces domestic opportunities and consumption. A positive correlation can occur when both income inequality and trade deficit are high, like in Germany, or low at a time.

However, during the course of the research, we also stumbled upon interesting cases. Trade seemed to be a relatively insignificant factor in some countries and did not make up a significant part of their GDPs, like in the United States. In cases like these, income inequality can be high based on factors within the country, either qualitative or quantitative, which we did not consider in this research. In trade surpluses, China surprisingly was an example where a high trade surplus still led to weak correlation due to other factors influencing the country’s income inequality.

The main objective of this paper has been to explore the relationship between income inequality and trade imbalances through empirical data analysis. Hence, the contribution of this paper is majorly empirical. Therefore, this paper has a few shortcomings, which we hope can become further points to study. First, we did not include qualitative data into our research process. We relied on a statistical analysis of a dataset. Moreover, we did not take into account factors such as low trade significance and other internal factors. Lastly, there was a data shortage in the dataset for a few countries and components. Hence, we could not include them in the calculations.

References

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About the author

Meghana Chittineni

Meghana is the Head Girl of DRS International School, as part of the graduating class of 2023. She is an avid debater who has been part of various MUN conferences and has taken part in Financial competitions. She prides herself on being a professional Bharatanatyam dancer (Indian classical art form), mentor and student of other Indian classical art forms. She is a merit scholarship student and is passionate about contributing to society.

The post The Relationship between Income Inequality and Trade Imbalances appeared first on Exploratio Journal.

This paper explores labor unrest in China. The analysis examines the country’s rapid rise in global manufacturing and its implications for workers, along with its harmful ramifications and possible resolutions.

Industrialization & Labor Market

The Industrial Revolution of the late 18th century witnessed the decline of feudalism and gave rise to industrial capitalism in western countries. At the time, coal, an essentially unlimited energy source, substituted for the inherently limited source of wood. Subsequently, the application of this new energy source to steam-powered machinery fostered the factory system (Bannister 2016), in which the means of production, raw materials, powerful machines and factories, became concentrated in a group of select individuals. These profit-driven capitalists controlled capital, built factories, and employed a massive workforce. As Marx and Engels wrote in the Communist Manifesto in 1848, capitalism “has created more massive and more colossal productive forces than have all preceding generations together.” (Frieden 2013)

Before the Industrial Revolution, workers entailed craft skills to produce goods that were consumed domestically and locally. Agricultural activity remained the main domain of work. However, as the Industrial Revolution spread, workers increasingly crowded into cities where factories, transportation, and infrastructure were located. Workers began to work fixed-hours under rigid conditions that were set by factory owners. Meanwhile, because of technology change, the mass production of goods first became possible in the early nineteenth century. The manufacturing process was broken down into segments. Workers followed routinized instructions and were required to repeat one specific task as a part of the whole manufacturing process. This is known as the division of labor. Adam Smith, who witnessed the beginning of the Industrial revolution, noted that the increasing division of labor must inevitably be associated with a simplification of the tasks to be performed by each individual worker (Brugger 2018). Skilled artisans, who manually crafted items, became displaced by the streamlined production process in factories. Moreover, with the spread of Taylorism and Fordism later on in the twentieth century, owners maximized output with forms of mass production like assembly lines.

While several European countries succeeded in following the path of England’s Industrial Revolution, China, on the other hand, didn’t industrialize until 150 years later. There are various explanations for why the Industrial Revolution failed to occur in China at that time. As Wen-yuan Qian and others argue, it was China’s imperial and ideological unification that prohibited the growth of modern science and impeded the country’s industrialization process (Lin 1995). Nevertheless, in the past few decades, China has experienced fast industrialization;  in 2012, China accounted for 19.8% of the entire world‘s manufacturing output (Li 2014).

Workers in China

1. Economic development & labor force

China’s labor market is one of the most important factors contributing to its fast growing economy in recent decades. From 2000 to 2005, manufacturing accounted for 32% of China’s GDP and 89% of its merchandise exports (Robertson 2008). The share of the population employed in the secondary industry to the total population also increased from 7% to 30% between 1952 and 2012 (National Bureau of Statistics, 2013). Foreign factories favor China for the abundance of cheap labor it offers. Even as the working population has shrunk in recent years and as many international companies turn to other countries in Southern Asia, China maintains the largest manufacturing labor market in the world.

  2. Migrant Workers

a. Definition

         A key component of the Chinese labour force is rural-urban migrant workers, accounting for 72 percent of China’s urban workforce (347 million) (Lee 2016). Migrant labor’s contribution to the GDP was estimated at about 30% and 31% of GDP of Beijing and Shanghai in 2007 (Caijing, 2009a). While “migrant workers” in the U.S. usually refers to workers who immigrate from other parts of the world, in China, migrant workers refers to people who left their original, rural homeland in China to seek work within Chinese cities. In 1958, the hukou (household registration) system, divided into agricultural (rural) hukou and non-agricultural( urban) hukou, was adopted to control rural-urban migration and labor mobility. For people holding rural hukou, they are considered rural residents entitled only to social benefits provided by their places of origin even if they live and work in urban cities. Chinese migrant workers, who hold rural hukou but work in urban China, are thus not considered urban residents. Thus, for migrant workers, they cannot access social welfare in their working places, such as education, healthcare and pensions, which are only eligible to local urban hukou holders. Moreover, most migrant workers are incapable to meet the requirements to change a rural hukou to an urban one. Migrant workers often suffer from social exclusion in big cities. They are mostly staffed in manufacturing sector and other low-end services that urban residents rejected. A 2004 national survey indicated that migrants accounted for 68% of the manufacturing sector’s workforce (Wei 2006).

b. First & Second generation migrant workers

         The distinction between the old and new generation of migrant workers is vague, usually workers born after 1980s are considered the new generation. According to a national survey from 2013, the total number of new generation migrants has exceeded 100 million, which is about 60 % of the total rural migrants in China. The Second generation migrants are usually depicted in literatures as having better education, more connected to urban life, and more actively engaged in defending their rights compared with first generation migrants. Comparisons between the social integration of first and second generation migrant workers have constantly received wide research attention. The comparisons become important indicators of improvements in migrant workers’ living and working conditions.

c. Dispatched Workers

         China’s Labor Contract Law in 2008 demands companies to provide labor contracts only to direct employed workers. As a result, companies see “dispatch workers” that are paid and employed by subcontracting agencies a way to cut cost. Dispatched workers tend to receive less pay compared with their directly employed counterparts and endure partial or delayed payment of wage as most subcontracting agencies are not supervised under strict regulation. In 2014, an International Labour Organization study revealed that against rising costs in a slowing economy, there was systemic usage of subcontracted labor in the Chinese manufacturing, construction, and services sectors (Liu 2014). By 2011, there were 37 million dispatched employees, accounting for 13 percent of total employees in China. And a little over half (52%) of the sampled dispatch workers were rural migrants(Chan 2019).

d. Student Intern

         Students at technical schools are required to do internship at factories in order to get a graduate diploma. Since students normally lack leverage and legal channel to secure their rights, factories and schools together exploit the cheap labor of students. 

Chinese worker empowerment

1. Mistreatment of Migrant Workers

Rural migrant workers are the equivalent of cheap migrant labour in Lewis’s (1954) model of unlimited surplus labour supply. Their ‘temporary’ legal status and permanent ineligibility for local citizenship make them vulnerable to mistreatment and easily expendable (Chan 2010). Many migrants suffered inferior working conditions including long hours in dirty, noisy workshops and frequent wage delay and defaulting (Chen 2009). Workers sometimes even desire overtime working because their basic wage is too low to meet local living standards. The Chinese Household Income Project Survey of 2002 show that over 80% of migrants worked seven days per week, and only 7% workers’ working time was in accordance with what law regulated (Shi 2008). Migrant workers make up 80% of the deaths in mining, construction, and chemical factories. And about 90% of those suffering from work-related diseases are migrant workers (Zheng 2005). The 2002 CHIPS data also indicates that only 5 per cent of migrant workers were covered by a pension scheme, less than 2 per cent by unemployment insurance, 3 per cent by medical insurance and that less than 10 per cent were living in public housing (Shi 2008). In Hengyang Foxconn, survey showed student interns are required to work 10 hours a day, six days a week. For interns who refuse to work overtime and night shifts, teachers threaten them with graduate diploma and carried out physical violence. These teachers were in turn provided a 3000 RMB ($425) “subsidy” from the factory (China Labour Watch 2019). At the same time, in one documented case concerning a dispatch worker in the steel industry, the dispatch worker’s claim for “equal work equal pay” was rejected as the court’s verdict read: “…Equal work refers not just to the same kind of work, but also to equal labor ability, skill, and equal results and so on. Those issues are not within the capacity of the court to determine.” (Chan 2019).

2. Labor Unrest in China

Labor unrests in China are mostly localized and usually characterized as “defensive”. Workers demand most often for immediate wage rise. A research analysis of 308 strike cases verdict indicates that from 2008 to 2014 more than a half of strikes argues for a rise in salary. Yet, cases of strikes in China are scattered among pieces of news report without any official data collection. China Labour Bulletin 2011 estimated that roughly 30,000 strikes and protests by workers occurred in 2009 alone (Elfstrom 2014). A recent peak in labor unrest was in 2010, when labor disputes and strikes concentratedly took place. Among the incidents are the well-known cases of employee suicides at Taiwan-owned enterprise Foxconn and a series of strikes in Honda. After hundreds of workers walked off the job at a Honda plant for two weeks, Honda was forced to increase workers’ pay by up to 32 percent. Similarly, Foxconn announced a 70 percent pay rise after worker suicides raised questions about working conditions at the factory (Ward 2010). In addition, during the “summer strike wave” in 2010, the Shanghai- and Suzhou-centred Yangtze River Delta, the Pearl River Delta and the Dalian-centred Liaoning region all experienced interest-based strike actions that called for the increase of wages and benefits (Chang 2015).The database of the Supreme People’s Court shows a marked increase in lawsuits over “dispatch work” in basic-level courts: from 59 cases in 2012 to 1255 cases in 2014 (Chan 2019).

  3. Literary Works & Chinese Worker Empowerment

a. Positive Attitude

Optimistic attitudes about worker’s empowerment persist in works analyzing the new-generation migrant workers. C. Cindy Fan and Chen Chen (2013) wrote that new-generation tend to pursue migrant work not only for economic return but also self-improvement and urban experience. They are less tolerant of low pay and poor working conditions and are more ready to express their frustration, including resorting to protest and even suicides (Fan 2013). Elfstrom (2014) also affirmed that due to labor shortage and media openness, workers are gaining more leverage and are becoming more assertive in their demands arguing for higher wages, better working conditions and more respect in their working environment. Data from the research supported the claim by suggesting a steadily increasing trend in strikes, from 3.6 actions per month in 2008 to 32.1 actions per month in 2012. Cheng (2014) noted that with the suicides at Foxconn, the new-generation migrants demonstrated strong will when they held strikes, undertook collective bargaining, and achieved impressive outcomes. Cheng pointed out that the strategies used in the Honda strike in 2010 and 2011 were unprevailing among the first-generation migrants.

b. Pessimistic Attitude

         Nevertheless, Ching Kwan Lee (2016) reveals that the soaring cost of living in bigger cities already outweighs the minor increase in salaries and that the second generation consumes more but earns less – their demands also fail to go beyond rising wages. Discussing strikes, Ching Kwan Lee  acknowledges that once set in a longer time period, the amount of strikes is actually decreasing and the corporations are more able to respond to strikes by firing the organizers or by “reinstating its own management staff” as head of labor unions. He and Wang(2016) indicated that urban lives of the new generation suffer from the same level of precarity as their predecessors, sometimes even worse because the rigid hukou system and fiercer competition among migrant workers. Friedman and Lee (2010) argued that Chinese strikes are largely localized, with workers demanding for change only specific to their factories. “Strikes are fundamentally cellular in the sense that the cells are not combining to form tissues.’’ Even if workers successfully had a wage rise, it is still unlikely that a durable system of adequate workplace representation will be created. 

Moreover, Li (2014) suggested that older migrants showed better mental health status than younger migrants. According to Leng (2020) the new-generation migrants have a significant weaker sense of rural identity than first-generation migrants, while they show no significant stronger sense of urban identity. Instead of integrating better into the urban society, their social identity is in fact “stalled”.

Ethnicity & Labor

1. Ethnic minority groups in China

Ethnicity discrimination seems a minor issue in China, where people rarely stand out in the crowd because of skin color or ethnic dress code. With efforts of homogenization of ethnic minorities made by the Chinese government, ethnic identity of individuals is gradually ignored and we intuitively categorize Chinese people we meet as people of the Han ethnic group. As a result, minority groups in China become increasingly marginalized as their needs and demands are disregarded. The Han ethnic group makes up 92 per cent of the 1.2 billion population, while minority groups which include Tibetans, Mongolians, Uighurs, Koreans and Tujia make up around 109 million people (2001). The Uigur, Kazakh and Kirgiz nationalities, who concentrated in the region of Xinjiang, speak Turkic languages and regard Chinese as a foreign language. Furthermore, their Muslim traditions bear little resemblance to the Han cultural traditions. Tibetans, at least half of whom live in the Tibet Autonomous Region display a high degree of cultural homogeneity which is religious-based, Tibetan Buddhism, and also linguistic: fewer than one in three Tibetans can write Chinese (Isabelle 2000).

The fact is that ethnicity conflict continues to be a persistent issue in China.In the manufacturing and textile city of Ningbo ethnic minorities are sometimes blamed in the media for rising crime rates, perpetuating inter-ethnic tensions and negative stereotypes (Tyson 2018). In an ethnic riot in 2009, at least 150 people have been killed and thousands more have been injured or arrested in Urumqi, Xinjiang (Lipscomb 2016). Researchers recorded 213 ethnic violent events between 1990 and 2005 in the Ethnic Violence in China database (Cao 2018). News reporting abuses and conflicts in ethnic minorities are filtered before reaching the public. Chinese government feel compelled to minimize the impact of ethnicity tensions in an attempt to maintain national stability. At a UN Committee on the Elimination of Racial Discrimination hearing to consider a Chinese government report on minority rights recently, China was accused of having a superiority mentality, especially in its reference to Tibetans and other minorities as “backward” (The Irish Times 2001). 

2. Exploitation of labor force of minority groups

In Xinjiang and Tibet regions, government has been taking radical measures to repress minority groups with the excuse of combating extremists. News reports on the subject was rarely heard of, never making their way up to Chinese online platforms. Nonetheless, as the Australian Strategic Policy Institute estimates, between 2017 and 2019, more than 80,000 Uighurs were transferred out of the far western Xinjiang autonomous region to work in factories across China through schemes under central government policy known as Xinjiang Aid. At the factories, the Uighurs were forced to have Mandarin lessons and “ideological training” outside of working hours, subjected to constant surveillance and banned from observing religious practices. Furthermore, it was “extremely difficult” for Uighurs to refuse or escape the work assignments with the threat of “arbitrary detention” (BBC News 2020) Villagers from Muslim minorities, targeting mostly Uighurs and Kazakhsare, were compelled to work with order from Chinese officials. The labor bureau of Qapqal ordered that villagers should undergo military-style training to convert them into obedient workers, loyal to employers and the ruling Communist Party. Under pressure from the authorities, poor farmers, small traders and idle villagers of working age attend training and indoctrination courses for weeks or months, and are then assigned to stitch clothes, make shoes, sweep streets or fill other jobs. The government maintains that the Uighur and Kazakh villagers are an underemployed population that threatens social stability. “Turn around their ingrained lazy, lax, slow, sloppy, freewheeling, individualistic ways so they obey company rules,” the directive said (Buckley 2019). Such acts of coercion towards ethnic minorities in China again poses heavy suspicion whether Chinese laborers are actually enjoying the rights they are entitled to.

Chinese Governmental Infringement

Labor unions, a common tool workers turn to when defending their rights in workplace, operate differently in China than that in western countries. After the massive worker protest at Tiananme in 1989 that caused heavy injuries and multiple deaths, independent labor unions were prohibited in China. The All China Federation of Trade Unions (ACFTU) became the only labor union admitted by the government, which can establish its branches at local levels. Chinese labor unions are highly integrated with political institutions. ACFTU, in its essence, is an organ of Chinese Communist Party. The main objective of the organization is thus to help ensure central government policies are carried out swiftly instead of answering petitions of grassroots labor. In 2006, ACFTU Chairman Zhao Wangguo affirmed, “All trade union organizations must consciously accept the leadership of the Party, resolutely implement the Party’s line and directives and also comply with all decisions and plans adopted by the Party Central Committee.” (Bai 2011) As China fosters rapid economic development in recent years, the trade union sides more often with capital than with labor. 

One recent attempt the Chinese government made to ensure fair employment for migrant workers is the Labor Contract Law in 2008. The law clarifies regulations related to the content of labor contracts and imposes penalties for companies failing to provide written contracts to employees (Bai 2011). It also aims at improving processes of labor grievances through mediation, arbitration, and litigation in order to avert collective actions of labor protests(Remington 2015). The 2008 law is no doubt a milestone for labor rights in China. However, enforcement of the law is still largely overlooked at local levels. While the central government focuses on reinforcing its authoritarian role, it is the local government that in reality enforces specific terms and laws. As Lee (2008) stated, local government aims at the “accumulation of revenue and resources rather than legal reform”. Local government usually aligns with large corporations, but stands opposite from the exploited workers. As a result, workers right are not strictly protected and judicial cases at local levels are loosely tried. Chinese and International NGOs become workers’ main support for their power of leverage, taking labor right cases over for civic and obligation causes.

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About the author

Xiaolin (Cathy) Lu

Cathy is a junior at the Shanghai Foreign Language School Affiliated to SISU

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