or investors needed for economic growth. Foreign enterprises involvement in emerging or developing economies is controversial, as weak legislation and different labor standards give rise to exploitation of workers. In the past and to this day, reports of poor working conditions in foreign enterprises are common. If put on the spot by the press or non-governmental organizations (NGO), and because of the recent trend of corporate social responsibility, companies will usually give in to the public outcry and improve working conditions above the domestic levels or at least to the minimum domestic levels. Under this Western moral pressure, companies may improve working conditions for its labor force. Existing evidence suggests that in China international firms do provide higher pay and more favorable working conditions, much in contrast to enterprises under Greater Chinese ownership, which are notorious for bad labor conditions (see Ge, 2007; Fu and Gabriel, 2001; and Heilmann, 2004). have become allowed to operate in China to some degree, but usually these are foreign or Hong Kong based. Recently, efforts by Social Accountability International, a US based NGO for promotion of corporate social responsibility, has lead to heated discussions if they have protection of Chinese workers rights in mind or if they are working on behalf of Western protectionism trying to erode China s competitive advantage (Chan, 2005). There have also been reports of NGOs assisting workers who have been denied payment of wages (China Daily). In how far there is domestic diffusion and what roles foreign influences play would require further study. Given the concentration of foreign enterprises to the Eastern seaboard as well as the limited role of NGOs in China it can be suspected that the overall impact is small and will only affect a share of the workforce, mainly in areas where competition for labor is high.
4.6 Are there Real Chinese Trade Unions
mentioned above Chinese trade unions by no means fit any Western definition. However, when evaluating Chinese trade unions one needs to consider the inherited institutional structure in which national trade union practices need to be constructed (Clarke, 2005). At this stage it would be unfair to judge Chinese unions on the basis of understanding of trade unions in advanced economies. Despite all its advances China remains an emerging economy and it is far from having completed its transformation from a planned economy. The newly developed labor market is little more than a decade old. Additionally, the size of the Chinese economy and having the world s largest labor force creates additional challenges, perhaps calling for a different approach. Potentially trade unions may have a balancing effect in the inc...
