Reading on

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Reading on global commodity chains and
sweatshop labor

• What happens in global commodity chains?
• Production of shoes, clothes, toys, consumer
  electronics
• Design
• Factory investment, ownership, management
• Manufacturing (some call sweatshop labor)
• Marketing
• Where does each function take place?
• Core?
• Semi-periphery?
• Periphery?
• Which functions command the biggest share of the
  profits?

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Background to reading on global commodity
chains and sweatshop labor

• Dependency World Systems
• Core Core
• Periphery Semi-periphery
• Periphery
• World systems theory
• There is some potential for countries in the
  periphery to develop and move into the
  semi-periphery, although they are unlikely to
  catch up to core countries.
• Global commodity chain studies draw on the
  insights of dependency/world systems theory

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Chinese Development in Comparative Perspective

• China was extremely backward in late 19th and
  early 20th C
• Agriculturefailed to keep up with population
  growth leading to extreme poverty
• Little industrial development

4
China Faced Severe Military Threats

• Repeatedly defeat in war
• Opium Wars 1842, 1860
• Sino-Japanese War 1895
• Resulted in limits on sovereignty
• China carved up like a ripe melon
• treaty ports, foreign concessions,
• extra-territoriality

5
Chinese Development in Comparative Perspective

• Chinas early failed response to the challenge of
  the West
• Contrasts w/ Japan
• resistance to Westernization
• China how to adopt Western technology without
  Western values?
• Internal crisis
• population pressure
• 1600s 125 million mid-1800s 400 million
• peasant rebellions
• 1850-1880est. 100 million deaths

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Chinese Development in Comparative Perspective

• China begins to catch up
• Successful industrialization
• Military implications

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Origins of the Chinese Communist System

• Communist Party of China founded 1921
• Fights for power
• Peoples Republic of China founded 1949

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Origins of the Chinese Communist System

• Sources of support for Communist revolution in
  China
• redistribution of land to peasants (land reform)
• ? appeal to socio-economic interests
• resistance to Japanese invasion (1937-45)
• ? appeal to nationalism

9
Origins of the Chinese Communist System

• China looks to Soviet Union for model of
  catch-up development
• Soviet-style planned economy
• Totalitarian regime under Mao Zedong

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Chinese Development in Comparative Perspective

• China attempts to adopt Soviet-style planned
  economy
• Contrasts w/ Soviet Union
• Compare starting points of First Five-Year
  Plans
• Soviet1927
• China1953
• Even more backward (Gerschenkron)
• China Lower agricultural output (Soviet 5x
  higher)
• China Lower industrial output (Soviet 4x higher)

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Chinese Development in Comparative Perspective

• Lenins innovation
• vanguard party leads proletariat in establishing
  socialism
• Maos innovations
• vanguard party leads peasantrynot proletariatin
  establishing socialism
• voluntarism (where theres a will theres a way)
• Contrast orthodox Marxist emphasis on real
  material conditions
• mass mobilization

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Chinese Development in Comparative Perspective

• Mao tries to compensate for Chinas relative
  backwardness
• Great Leap Forward 1958-61

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Chinese Development in Comparative Perspective

• Mao tries to compensate for Chinas relative
  backwardness
• Great Proletarian Cultural Revolution 1966-76
• part struggle over correct model for economic
  development
• part struggle for power w/in CCP (Chinese
  Communist Party)

14
Impetus for Reform in China

• Crisis of political legitimacy
• Communist utopia? ? or economic stagnation
• Per capita household expenditures
• Increased only 2.2 1952-75
• 1975 per capita consumption
• Grain, cooking oil, meat ? lower than
  in 1950s

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Impetus for Reform in China

• Crisis of political legitimacy
• Nationalism (wealthy/strong China)?
  ?Demonstration effect/challenge of East Asian
  tigers
• South Korea, Taiwan, Hong Kong, Singapore

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Reform in China and Comparisons with Russia

• Communist Party welcomes reform
• Cultural Revolution chaos in China
• ? made reform more welcome/more urgent to
  Communist Party cadres
• Contrast entrenched bureaucracy in Soviet Union

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Reform in China and Comparisons with Russia

• China introduces market forces
• Maos death creates political opportunity
• Communist Party begins economic reform 1978
• Under new leader Deng Xiaoping

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Reform in China and Comparisons with Russia

• Economic
• China still a largely agricultural economy as of
  1978
• Huge opportunities for growth through
  industrialization
• Contrast Soviet Union had already completed
  transition from agricultural to industrial economy

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Reform in China and Comparisons with Russia

• Contrast Shock therapy in Russia
• Gradualism in China
• Introduce market forces into agricultural sector
  first

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Reform in China and Comparisons with Russia

• Contrast Shock therapy in Russia
• Gradualism in China
• Gradual change in smaller industrial sector
• Froze plan obligations at 1984 levels
• Introduced prices on the margin
• made reform less painful in China

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Reform in China and Comparisons with Russia

• Russianeo-liberal-informed policies destroy
  state sector
• Chinamarket-oriented policies link state and
  market
• Fundamental change in strategy
• From planned to market economy
• With active but more selective state intervention
• Pre-WTO high tariff barriers,
• bank loans for state industry
• tax breaks for exporters, key industries

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Developmental Outcomes in China

• Spectacular economic growth
• About 9-10 percent per year since the late 1970s
• Increasing incomes on average (7-fold increase in
  20 years)
• 1985 293
• 2006 2,025
• Improving literacy
• 1978 37 of adults illiterate
• 2005 lt10
• Improving infant survival
• 1978 41 deaths per 1,000 live births
• 2005 23
• Major drop in absolute poverty
• Between 1990 and 2004 the number of people living
  on a dollar per day fell by 246 million, while
  total population rose by over 156 million.
• Growth has helped to lift several hundred million
  people out of absolute poverty, with the result
  that China alone accounted for over 75 percent of
  poverty reduction in the developing world over
  the last 20 years.

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Social Implications of Chinas Economic Reforms

• Symptoms of a 19th-Century-style capitalism
• Large and growing income inequality
• 1983 0.28 (gini coefficient)
• 2001 0.447
• Environmental degradation
• China has 20 of the world's 30 most polluted
  cities, largely due to high coal use and
  motorization.
• Lack of protection for vulnerable social groups
• Poor
• Unemployed
• Elderly
• Sick