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?
1
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
2
Chinese Development in Comparative
Perspective

 China was extremely

backward in late 19th
and early 20th C
 Agriculture—failed to
keep up with population
growth leading to
extreme poverty
 Little industrial
development
 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
Chinese Development in Comparative
Perspective

 China’s 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
 1850-1880—est. 100 million deaths
 Chinese Development in Comparative
Perspective
 China begins to
catch up
 Successful
industrialization
 Military
implications
Origins of the Chinese Communist System

 Communist Party of
China founded 1921
 Fights for power
 People’s Republic of
China founded 1949
Origins of the Chinese Communist System
 Sources of support for
Communist revolution
in China
 redistributionof land to
peasants (land reform)
 appeal to socio-
economic interests
 resistance to Japanese
invasion (1937-45)
 appeal to
nationalism
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
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”
 Soviet—1927
 China—1953

 Even more backward (Gerschenkron)

 China: Lower agricultural output (Soviet 5x higher)
 China: Lower industrial output (Soviet 4x higher)
Chinese Development in Comparative
Perspective
 Lenin’s innovation
 vanguard party leads
proletariat in establishing
socialism
 Mao’s innovations
 vanguard party leads
peasantry–not proletariat—in
establishing socialism
 voluntarism (where there’s a
will there’s a way)
 Contrast orthodox Marxist
emphasis on real material
conditions
 mass mobilization
Chinese Development in Comparative
Perspective
 Mao tries to compensate for China’s relative
backwardness
 “Great Leap Forward” 1958-61
 Chinese Development in Comparative
Perspective
 Mao tries to compensate
for China’s 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)
 Impetus for Reform in China
 Crisis of political legitimacy
 Communist utopia?  or
economic stagnation
 Percapita household
expenditures
 Increased only 2.2% 1952-75
 1975 per capita consumption
 Grain, cooking oil, meat
 lower than in 1950s

14
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

15
Reform in China and Comparisons with
Russia

 Communist Party welcomes reform

 CulturalRevolution chaos in China
 made reform more welcome/more urgent
to Communist Party cadres
 Contrast: entrenched bureaucracy in Soviet
Union
Reform in China and Comparisons with
Russia

 China introduces market forces

 Mao’s
death creates political opportunity
 Communist Party begins economic reform 1978
 Under new leader Deng Xiaoping
 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
Reform in China and Comparisons with
Russia
 Contrast: “Shock therapy” in Russia
 Gradualism in China
 Introduce market forces into agricultural sector first
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
Reform in China and Comparisons with
Russia

 Russia—neo-liberal-informed policies destroy state

sector
 China—market-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
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: <10 %
 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.
Social Implications of China’s
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