Moving In and Moving Up? Labor Conditions and China's Changing Development Model

For the last decade, a large contingent of manufacturing firms in developmental zones on China's coast has moved to inland provinces. What are the implications of this move inland for Chinese workers? Research on labor conditions in the current period of economic globalization and mobile capital debates the existence of a “race to the bottom” in labor standards through the pressures of international capital mobility. These theories predict that as inland China develops and attracts a larger amount of foreign and domestic capital, inland governments will compete by offering cheap labor and lower or unenforced standards. Our argument in this paper is contrarian in that we propose the possibility of a positive relationship between the movement inland and labor conditions. We argue that the movement of manufacturing to inland China is not primarily about cheaper workers, but instead signals the beginning of a fundamental shift in the development model through the employment of a localized workforce. Having more workers from within the province, local governments in inland provinces will be more inclined to develop inclusive social policies and improve labor conditions. Local governments in coastal provinces that inherit fundamentally different demographic structures are less likely to pursue this governance style. We use audit data from Apple corporation suppliers (2007–2013), supplementary survey data, and in‐depth interviews to discuss the relationship between localized production and better labor conditions. Copyright © 2017 John Wiley & Sons, Ltd.