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Chapter 6 The Paradox of Labor Force Dualism and State-Labor-Capital Relations in the Chinese Automobile Industry Lu Zhang The rapid rise of China to become the largest automobile-producing nation and market in the world made newspaper headlines at the end of 2009. Despite the extensive interests in the booming Chinese automobile industry, little attention has been paid to the 2.9 million Chinese autoworkers who are making those headlines.These workers are the focus of this chapter.Most existing research on the changing labor relations in reform China focuses either on labor-intensive manufacturing in the sunbelt in southern China or on declining state-owned enterprises (SOEs) in the rustbelt northeastern China.This indepth case study of the automobile industry contributes an important case for comparison; here we have a capital-intensive pillar industry experiencing rapid expansion and restructuring with both heavy state and global capital involvement through joint ventures. The main argument is that growing competition in the Chinese automobile industry since the mid-1990s has driven the major Chinese automakers to move toward a leaner and meaner workplace to cut costs and increase staff flexibility . They have generally replaced permanent and long-term state workers with young, urban-bred, formal contract workers under renewable short-term labor contracts.At the same time, more and more automakers have introduced labor force dualism by deploying a large number of temporary workers (hired through labor dispatch agencies) alongside the formal workers on assembly lines but subjecting them to different treatment. In the second and the third sections of this chapter, I describe in depth this process of industrial restructuring , changing workplace, and transformation of production workforce in the 108 Zhang Chinese automobile industry since the mid-1990s. I highlight the emergence and expansion of labor force dualism and agency employment (labor dispatch), and the recomposition of formal and temporary workers under the dualist system. Labor force dualism was implemented in an effort to solve the problem of providing employers with flexibility in hiring/firing while at the same time obtaining cooperation and loyalty from the core (formal) workers. But it has had notable unintended consequences. On the one hand, labor force dualism has detached formal workers from temporary workers and has kept the former relatively quiet so far. On the other hand, the dualistic system has also radicalized a new generation of temporary agency workers to actively protest against discriminatory treatment. Moreover, shop floor dynamics are very much conditioned by global processes. Intense competition at a late stage of the product cycle of world automobile production has driven management to reduce the privileges of formal workers in wages and job security.As a result, the current consent of the formal workers with management, based on material gains, is declining. Workers’ bottom-up resistances, in turn, have forced management to pull back from labor force dualism and improving working conditions for temporary workers.In the fourth section,I examine the workers’resistance to the labor force dualism and the management responses, pointing to the paradox of labor force dualism in labor control and the radicalization of a new generation of temporary workers. Shop floor and global processes are themselves conditioned by national political processes.By locating the case of autoworkers’resistance within the broad dynamics of national politics, I show in the fifth section how the bottom-up pressure of rising labor unrest incited by the informalization of employment has induced the central government to step in to regulate and stabilize labor relations through labor legislation reforms, including the enactment of the Labor Contract Law.Yet the unintended impacts of this new labor law on labor dispatch reveals the boundary-drawing strategy of the state among its working population and a relational and dynamic relationship among the party-state, labor, and capital in reform China. In the concluding section, based on the empirical evidence from the automobile industry,I discuss the dynamics of evolving state-labor-capital interrelations in reform China. I emphasize the legitimacy leverage of Chinese workers and the role of bottom-up labor resistance in counterbalancing the adverse effects of unregulated markets by holding the authoritarian regime responsive to popular demand. The data used in this chapter derived from sixteen months of fieldwork at seven major automobile assembly enterprises in six Chinese cities between 2004 and 2009.1 I chose the seven case-study enterprises based on the following combined criteria of case significance and research feasibility.2 First, the [18.189.178.37] Project MUSE...

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