The Impact of Labor-Management Relation Changes in China on China’s FDI Inflow
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This study demonstrates stabilized cooperation in labor-employer relations: focusing on steadily growing foreign direct investment in China despite stiffening of labor market and increasing labor wages. The improvement of stabilizing industrial relations by building a cooperative relationship between labor and management could promote foreign direct investment. Thus the main purpose of this study is examining the factors of attracting foreign direct investment. Deregulation is not always invitedpre-requisite to foreign direct investment. In spite of deregulation in the labor market, a classic example of increasing foreign direct investment implicates ‘Deregulation and Investment’. China is not attracting foreign direct investment through low labor wages, but it is attracting investment by guaranteeing corporate activities through labor-management stabilization. It is shown that foreign companies for the purpose of low income are small capital scales or low technological skills. In early period of reformation and the Opening of China, foreign capital firms show these tendencies. However the recent foreign capital enterprises have large capital scales and high technological skills to market share in China. A company that has large capital scales and high technological skills reaches cooperation in labor-employer relations and stabilization. Therefore in case of China, the companies in pursuit of localization play positive role to changing China’s labor policy.
Abstract
This study demonstrates stabilized cooperation in labor-employer relations: focusing on steadily growing foreign direct investment in China despite stiffening of labor market and increasing labor wages. The improvement of stabilizing industrial relations by building a cooperative relationship between labor and management could promote foreign direct investment. Thus the main purpose of this study is examining the factors of attracting foreign direct investment. Deregulation is not always invitedpre-requisite to foreign direct investment. In spite of deregulation in the labor market, a classic example of increasing foreign direct investment implicates ‘Deregulation and Investment’. China is not attracting foreign direct investment through low labor wages, but it is attracting investment by guaranteeing corporate activities through labor-management stabilization. It is shown that foreign companies for the purpose of low income are small capital scales or low technological skills. In early period of reformation and the Opening of China, foreign capital firms show these tendencies. However the recent foreign capital enterprises have large capital scales and high technological skills to market share in China. A company that has large capital scales and high technological skills reaches cooperation in labor-employer relations and stabilization. Therefore in case of China, the companies in pursuit of localization play positive role to changing China’s labor policy.
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