Struggling Foreign Small- and Medium-Sized Factories in Coastal China

Liquidate, Move, or Fly by Night?

Research output: Contribution to journalArticle

Abstract

Since the mid-2000s, China has been transforming its industrial structure from a world sweatshop to a global manufacturing center. Many foreign small- and medium-sized factories that were engines of development in coastal China for the past two decades have recently been phased out due to the changing nature of macroeconomic policy, the labor market, and local interests. Unlike macroeconomic policy and the labor market, the subject of changing local interests has not been extensively investigated. This article explores an unclear political-economic logic and demonstrates the key counter-actions of the factories—legal liquidation, moving inland or to other countries, and illegal flight by night—in response to “phasing out” pressure from local politics. The micro-level struggles between foreign factories and local interests are indirectly conducive to China’s macro-level industrial transformation. This pattern will likely be repeated in China’s less-developed regions and other rapidly developing countries in the near future. This study is based on empirical data from fieldwork, primarily in Shandong province, from 2008 to 2016 as well as archival data from China, Korea, and other countries.

Original languageEnglish
JournalModern China
DOIs
Publication statusPublished - 2019 Jan 1

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macroeconomics
factory
labor market
China
industrial structure
economic policy
fieldwork
engine
politics
manufacturing
developing world
flight
liquidation
economics
local politics
macro level
micro level
Korea
policy
Night

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • History
  • Sociology and Political Science

Cite this

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title = "Struggling Foreign Small- and Medium-Sized Factories in Coastal China: Liquidate, Move, or Fly by Night?",
abstract = "Since the mid-2000s, China has been transforming its industrial structure from a world sweatshop to a global manufacturing center. Many foreign small- and medium-sized factories that were engines of development in coastal China for the past two decades have recently been phased out due to the changing nature of macroeconomic policy, the labor market, and local interests. Unlike macroeconomic policy and the labor market, the subject of changing local interests has not been extensively investigated. This article explores an unclear political-economic logic and demonstrates the key counter-actions of the factories—legal liquidation, moving inland or to other countries, and illegal flight by night—in response to “phasing out” pressure from local politics. The micro-level struggles between foreign factories and local interests are indirectly conducive to China’s macro-level industrial transformation. This pattern will likely be repeated in China’s less-developed regions and other rapidly developing countries in the near future. This study is based on empirical data from fieldwork, primarily in Shandong province, from 2008 to 2016 as well as archival data from China, Korea, and other countries.",
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