The China Price: The True Cost of Chinese Competitive Advantage (review)

In her new book, The China Price, Alexandra Harney explores the consequences of rapid industrialization in China. In the two decades since the 1980s, rapid economic growth has transformed China into the world's factory. However, the author indicates that this prosperity has developed in exchange for the sacrifice of many lives. Many factory workers are still working for wages lower than the legal minimum and under dismal working conditions. Harney indicates that at the end of 2005, more than 600,000 Chinese were suffering from occupational diseases. The Ministry of Health also reported, in 2007, 14,296 cases of occupational illness (China Daily, 2008).

The miserable situation faced by industrial workers has significant parallels with the era of rapid growth in Japan. As illustrated in a large body of literature (Kamata 1983; Ui 1985; Chikamatsu 2003), Japanese society also suffered from occupational diseases and injuries, extremely low wages, and environmental problems. It took the Japanese post-World War II society several decades to settle these labor issues. Many other developed countries, such as South Korea, Hong Kong, and Taiwan, also evolved because of relatively low labor costs. Thus, this type of socially unfavorable developmental path may be a common factor among developing nations.

However, this impressive book goes far beyond noting these similarities. Through her research of news sources and various data and her interviews with local people, the author not only explores the similarities that China has with these developing nations, but also investigates the specific traits of China that distinguish it. She interviews more than fifty people, including factory managers, workers, labor lawyers, and representatives of nonprofit organizations. She tells their stories and reports their understanding of labor issues. Harney was a journalist for the Financial Times covering East Asia for nine years. In order to break loose from the restrictions on foreign media and to interview Chinese individuals more freely, she had to resign from the newspaper and become a freelance writer.

In her book, Harney shows that the Chinese government has not effectively improved the dismal job situation. Although the central government has implemented labor-related regulations since 1995, fair and speedy enforcement of the laws is not ensured because the enforcement of policies is left to local governments that do not have enough human resources for monitoring. In addition, local governments tend to prioritize increasing their areas' gross domestic product instead of investing in worker health and safety. Local governments often have a collusive relationship with employers and pretend to be ignorant of illegal operations that exploit workers.

Harney also investigates the migrant issue and the regional disparity that is associated with the migrant issue. Many farmers have moved to industrial cities in order to avoid the high agricultural tax that blocks them from making enough money to survive.¹ These desperate migrants are likely to face poor working conditions. Furthermore, since they are often not registered officially in their new residences, when they have occupational injures and their employers do not pay enough compensation, they are hesitant to go to the local government for support. Dewen and associates (2002) also indicate that Hukou (the Chinese registration system) causes labor immobility and, as a result, expands regional disparities.

Another way in which China differs from other developing nations is the pressure it receives from other nations. In the 1990s, anti-sweatshop movements, which forced retailers and brand name companies to bear the responsibility for the bad labor conditions of factory workers, became prevalent in developed countries and had a large impact on Chinese factories. Many Chinese factories that deal internationally and are foreign-capitalized reexamined their operations in order to proclaim that their workers did not work in slave-like conditions. Some Western buyers even took it upon themselves to monitor factory labor conditions and hired auditing firms and other third parties to ensure that goods were made under acceptable...