Jaesok Kim is Assistant Professor of Anthropology at the University of Pennsylvania.

Chinese Labor in a Korean Factory

CLASS, ETHNICITY, AND PRODUCTIVITY ON THE SHOP FLOOR INGLOBALIZING CHINA

By Jaesok Kim

Stanford University Press

Copyright © 2013 Board of Trustees of the Leland Stanford Junior University
All rights reserved.
ISBN: 978-0-8047-8454-2

Contents

List of Figures and Tables………………………………………….ixAcknowledgments……………………………………………………xi1. Introduction……………………………………………………12. The Politics of Spatial Divisions and the Living Environment…………353. The Politics of Nationality, Ethnicity, and Status: The Factory Office..674. The Making of Chinese Industrial Workers…………………………..985. Korean Management in a Chinese Workshop: Economic Globalization and the
Changing Factory Regime…………………………………………….1316. Pitfalls of Globalization: Local Connections and Their Impact on the
Factory Regime…………………………………………………….1677. Clash of the Global and the Local…………………………………1918. Globalizing Capital and the Bleak Future of Chinese Workers………….223Notes…………………………………………………………….245References………………………………………………………..255Index…………………………………………………………….275

Excerpt

CHAPTER 1

Introduction

We will make Qingdao the most investment-friendly place for Korean enterprises.

—CHONG YÜ, vice-mayor of Qingdao, March 2006

Chengyang is not a part of Qingdao but a part of Seoul.

—JUNG, manager of Nawon Korea, September 2002

Globalization is usually perceived as a progressive shift from bounded, local, and homogeneousforms of modernity to an ungrounded, flexible, and fluid postmodernity (Harvey 1991; Appadurai1996). The urban landscape of China clearly shows the increasing intensity of transnational andglobal flows of people, media images, ideas, and capital. When I arrived in the northern Chinesecity of Qingdao on a late summer day in 2002, the first scene that caught my eye was the colorfulelectric signs in English. Many of them advertized Hollywood movies running in local theaters,as well as branches of multinational corporations (MNCs), including chain stores such as Wal-Mart,Carrefour, and JUSTCO, fast-food restaurants such as McDonald’s and KFC. The signsindicate that Qingdao is a key consumer market of MNCs: Qingdao is the wealthiest city inShandong province and also is ranked tenth out of China’s top twenty wealthiest cities (KPMG2006).

However, the dazzling scene of thriving consumerism created by foreign corporations ismisleading because the service industry is not the main interest of foreign direct investment in theregion. Instead of in the tertiary industrial sector, foreign corporations made about four-fifths oftheir investment in the manufacturing sector. Foreign MNCs accounted for more than half ofthe total value of the city’s exports, and foreign corporations’ exports have been growing by morethan 10 percent each year (SDBS 2008). In fact, since the Chinese government named a district ofQingdao a Special Economic and Technology Development Zone, the city has transformed itselfinto the province’s center of manufacturing. The city has attracted a large amount of foreigndirect investment (FDI), reaching US$2.6 billion in 2008 and growing by more than 10 percenteach year since then (SDBS 2009). As a result, Qingdao was named as one of the most favoredChinese cities by the world’s top corporations, as almost 130 corporations on the Fortune 500 listhave invested in the city (KPMG 2007).

Although the large and growing number of MNCs indicates that Qingdao is an ideal city fortheir overseas business, it does not mean that MNCs operate in China without difficulties. MNCs,as creatures of late industrial capitalism, relocate incessantly from one location to anotherpursuing better business conditions that guarantee them higher profits (Bartlett and Ghoshal1991). Although their investment decisions are based on economic calculations of profit and loss,the actual movement of a corporation is not purely economic; it includes the transfer of the localculture of the place where the corporation is originally located. Workers and government officialsof the host country are also embedded in their own local cultures. Here I define the term “culture”in a particular way, as notions of time and punctuality, ideas of discipline, norms of desirablepersonhood, beliefs in legitimate workshop authority, and expected standards of bodilycleanliness. In fact, “culture” was the most commonly used term in the multinational factory thatI researched, where a small group of expatriate Korean managers supervised more than sevenhundred Chinese workers. On the shop floor of this factory, for example, I frequently heard Han-Chineseworkers complaining about Korean managers’ “excessive fretfulness” to keepproduction deadlines, while the Korean managers expressed their frustration with the “sluggish”work speed of the workers. Interestingly, both the workers and the managers explained theircomplaints about the other party in terms of “cultural” differences that allegedly exist betweenChina and (South) Korea. The vague idea of cultural difference contributes to establishing adistinctive factory management in which the Korean managers assumed an authoritarian andpaternalist role in “properly” disciplining and caring for untrained Chinese workers.

The mounting pressure from the global market complicates the situation of the multinationalworkplace. The global market, by its nature, constantly requires MNCs to shorten lead time andreduce production costs. The continuing pressure from the market often pushes managementtoward a higher level of globalization, which in this case requires the rationalization of shop-floororganization and increased labor productivity. My study shows how the mandate of the globalmarket to increase productivity and cut production costs brought constant changes to amultinational factory, prompting the foreign management to adopt different managerial strategiesand methods of labor discipline. At the level of the shop floor, management’s demands translatedinto faster work speed, tightened labor surveillance, and poorer work conditions, thus eventuallycreating local workers’ grievances against the foreign management. The same mandateperpetuates the tense relationship between foreign managers and local labor as it blindsmanagement to local cultural ideas about proper levels of labor discipline and acceptable methodsof shop-floor control.

NAWON APPAREL

I conducted my fieldwork at Nawon Apparel (Nawon), a multinational garment corporationlocated in the city of Qingdao. Major fieldwork was conducted from 2002 to 2003. After thefieldwork, I conducted follow-up research to 2006 and interviewed Nawon’s managers andworkers. Nawon was a medium-sized garment manufacturing corporation. In 2003, it employedabout seven hundred employees, including Korean expatriate managers, Korean-Chineseinterpreters, and Han-Chinese workers. Management hired Korean-Chinese—one of the fifty-fiveethnic minorities in China—for its local assistants of business, considering their bilingualism inKorean and Chinese and their Korean cultural background to be of great value. Han-Chinese, theabsolute ethnic majority of China, represented about 90 percent of the workforce at Nawon andnumbered more than six hundred. Most Han-Chinese workers were young and unmarried womenfrom rural backgrounds, which reflected management’s belief that women are more docile than men and its belief in theusefulness of women’s “nimble fingers” in labor-intensive garment production.

Nawon Korea, the corporate headquarters of Nawon, was located in Seoul, South Korea.Established in 1993 as an exclusively Korean-invested enterprise, Nawon was one of the fewamong the eighty Korean-invested garment factories in the greater Qingdao area that hadcontinuously operated for more than ten years (KOFOTI 2003). This corporation operated as atypical contract manufacturer that makes and ships products under contract to foreign buyers. In2002, the corporation exported 68 percent of its manufactured products to Japan and the rest tothe United States (Personnel Department, Nawon Korea 2003).

Korean-invested corporations were the most numerous group of MNCs in Qingdao. Thanks toits geographical proximity to Korea and low labor costs, Qingdao has been the largest investmentdestination for Korean corporations in China since 1992. In 2003, Korean enterprises accountedfor 23.5 percent of foreign trade (US$4.2 billion) and 45.4 percent of total foreign investment(US$1.8 billion) in the region (SDBS 2003, 2005; Kong 2005; SDBFT 2005).3 In 2003, almostseven thousand Korean-invested corporations were located in the city, and about forty thousandKorean nationals lived in and around the city (Qingdao ribao 2003; Jang 2003). Many Koreanstook great pride in their dominant economic status in Qingdao. Some of them even regarded thedistrict of Chengyang, where more than fourteen hundred Korean MNCs operated and overthirteen thousand Koreans lived, not as a part of Qingdao but as a part of Seoul (interview withKoreans, December 2002, March, April 2003; Moon 2002). Several Korean newspapers havedescribed Qingdao as leased territory controlled by Korea and have even compared Qingdao withDalian—an export-oriented harbor city in Liaoning Province—which was formerly a bridgeheadof imperialist Japan during the World War II and is heavily under the influence of JapaneseMNCs (Cho 2004; Bonyeong Lee 2005a).

The personnel composition of Nawon in June 2002 seems to demonstrate the factory’ssuccessful localization. Localization, a term common in Korean business administrationliterature, is often measured by the ratio between the number of Koreans and that of “indigenous”people among managerial staff, where a high ratio of the indigenouspeople indicates a high level of localization (Shanghai Asset Inc. 2005; Shin 1993). Successfullocalization, then, indicates management’s effective control of local labor even with a smallnumber of foreign managers. At Nawon, only three Korean managers supervised around sevenhundred Chinese employees, including sixteen Korean-Chinese interpreters, twenty-six Han-Chinesemanagerial staff, and over six hundred rank-and-file workers of Han-Chinese ethnicity.Compared with a nearby Korean garment factory where nine Korean managers struggled tocontrol about three hundred Chinese workers, the small number of Korean managerial staff in thefactory indicates that the management at Nawon controlled the shop floor effectively. In fact, thefactory experienced virtually no labor disputes during its decade-long operation in China, whilemany nearby garment factories, both foreign-invested and Chinese-owned, suffered from frequentlabor disputes, which mostly resulted from excessive overtime and delayed payment of wages.The situation at Nawon was even more extraordinary because the workers of the factory also hadto put in endless overtime, often longer than those of the other factories.

What explains the relatively stable labor-management relationship at Nawon? How could therelatively small foreign managerial staff control such a large number of Chinese workers withoutdifficulty? The history of the evolving factory regime of the corporation may explain the morethan a decade-long absence of major labor disputes. Just as industrial workers are not createdovernight but produced in prolonged struggles over restructuring of working habits (Thompson1966: 9), the factory regime at Nawon is in fact an end result of long-term, occasionally intense,daily interactions between foreign management and local people. In the context, my ethnographicstudy investigates how Nawon’s foreign management ensured the uninterrupted operation of thefactory by creating specific forms of power relations and ideologies on the shop floor. My studyalso analyzes how the Chinese workers reacted to management’s effort to mold them into”model” industrial workers. The corporation, which had boasted of its exceptional record of “nolabor disputes,” encountered an unexpected workers’ strike in 2002. I look into the historicalprocess through which the workers gradually changed from submissive subjects of labor controlto active organizers of resistance. This change eventually set a limit on management’s call for ahigher level of globalization.

The foreign management’s authoritarian labor control and its attitudes toward local laborresulted from collective misrecognition. It is misrecognition, because the managers at Nawonmisunderstood the workers they encountered on the everyday shop floor, based on their limitedpersonal experience and knowledge of China and Chinese workers. It is collective, because themisrecognition involved not an individual manager but the entire group of the Korean expatriatemanagers. Such misrecognition is a local effect of globalization. Globalization, the ever-intensifyingtransnational flows of capital, people, ideas, and cultural objects, is often believed toimprove people’s understanding of different “cultures” and thus promote their tolerance ofcultural others (Lane 2006: 89–90). However, especially during the early period of globalization,intensifying transnational flows often bring about misrecognitions, which makes the peopleinvolved misunderstand objects, ideas, or people they encounter. At Nawon, the Koreanmanagers’ initial perception of the Han-Chinese workers clearly reveals collectivemisrecognition. The managers viewed the Han-Chinese workers in their late teens as heavilyaffected by the radical Communism of the Maoist period, even though the workers had notexperienced even a single moment of radical Communism. As we shall see, management’smisrecognition of Chinese workers brought a particular political effect, which in this casedetermined its methods of labor surveillance and discipline.

MULTINATIONAL CORPORATIONS AND SUPERIORITY OF THE WEST

Much of the literature on globalization assumes the agencies of the global are located in the West.For example, David Harvey argues that key technological advances in the West such as therailroad, the telegraph, and the automobile, by bringing disparate places into a world market asglobal producers and consumers, have served to make the world a smaller place (Harvey 1991:229–32). Mokyr (1990) points to British technological advances in industrial sectors such astextiles and steel as the key factors that account for the Industrial Revolution and the subsequentglobalization. Explanations of Western technological prowess are closely related to the search forthe philosophical, cultural, or moral backgrounds that made technological development possibleonly in the West. Max Weber insisted that medieval cities of the West had been the places of origin of the modernconcepts of individualism, rationality, and freedom (Weber 1968 [1956]: 1226–50), which eventuallyinfluenced the development of capitalism in the West (Weber 2001 [1930]). He contrasted thecivilizations of the non-Western world with the “true” civilization of the West, which created andretained the values and ideas of legality, urban autonomy/freedom, and communal obligations(Weber 1986 [1921]). Following Weber, many scholars also have argued that some values andideas indigenous to the West contributed to technological achievements and, later, to theemergence of capitalism and the Industrial Revolution. They commonly have praised the West forits role in establishing a unique set of laws that protect private property and contracts (Hansen andPrescott 2002; Lucas 2002; North and Weingast 1989) and creating cultural norms such as hardwork, frugality, and educational discipline (Clark 2007).

In the West-centered model of capitalism and globalization, the non-Western world inevitablyassumes less important and peripheral roles, such as consumers of Western products or providersof raw materials. The model also assumes that the non-Western world remained less developedbecause it lacked the societal structures and cultural values that helped the West to take the leadin the Industrial Revolution and globalization. Countries like China and Japan may have been notmuch different from the European countries in terms of the “commodification of goods, land, andlabor, market-driven growth” (Pomeranz 2000: 107), but the material achievement of the non-Westernworld did not lead to an industrial revolution and thus failed to grant the non-Westernworld the agency of globalization. This, it has been argued, was because it adhered to hereditarysocietal statuses and privileges, and thus lacked social mobility and dynamics (Braudel 1992[1979]: 581–601). Following this logic, the non-Western world can be best described as aprovider of raw materials to the Western countries who helped the latter to rapidly expand theirindustry without driving up the cost of raw materials. This is the role of the non-Western world inthe so-called first great globalization shock (O’Rourke and Williamson 2002), the fast growth ofproductivity that coincided with the development of new transport technologies and theunprecedented expansion of world trade during the nineteenth century.

The workplace of many MNCs shows how the historical idea of Western-led globalization andthe belief in the prowess of the West is reproduced inpresent times, enhanced by the unequal power relationship between foreign managers and localemployees. In the workplace, management—most from the Western countries that areeconomically more developed than the host country—has tended to view its local employees asinferior subjects. The managerial practices of many MNCs reflect the foreign management’sbelief in the universal or “global” validity of its Western cultural values and norms, consideredsuperior to those of the local employees. For example, Fuller (2009) reports that in a Japanesesubsidiary of a U.S.-based company, the expatriate American managers developed contrastingcultural distinctions between themselves and its Japanese employees. The managers assigned to themselves desirable or”global” traits such as vision, creativity, directness, and risk-taking, which in fact reflected a certain version ofthe ideal personality thriving in the United States. In contrast, they put Japanese employees on the opposite side ofthe desirable traits and considered them uncreative, overly submissive, excessively reserved, and conservative (Fuller2009: 97–98). Klubock (1996) shows another corporate version of the West-centered globalization in the guise of “global”management by looking at a Chilean copper mine owned and operated by an American firm. In the Chilean mine, themanagement designed corporate regulations and benefits programs based on contrasting cultural traits between the UnitedStates and Chile. In the programs, the Chilean miners appeared to have undesirable cultural traits (unruly, violent,promiscuous, and overly masculine), in contrast to desirable American traits (law-abiding, peaceful, and monogamous).The “universal” values imposed on the Chilean mining community, however, originated from the particular values ofwhite-collar, middle-class American society.

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