Watching Walmart in China

Americans have well-developed views about Walmart, which has changed the landscape of our retail sector, our manufacturing sector, and (quite literally) the downtowns of many small- and mid-sized communities. Plenty of books have attempted to analyze the good, the bad, and the ugly aspects of Walmart’s impact in America. But, as Anita Chan writes, “[w]hat happens when the world’s largest corporation encounters the world’s biggest country?” That’s the question that Walmart in China attempts to answer.

As Chan is quick to mention, there has not yet been a single book devoted to Walmart’s presence in China. That’s only one of the reasons why this is a welcome addition to the literature on Walmart. The volume adds considerable context to contemporary debates on our economic relationship with China. It’s also a penetrating peek behind the curtains into just how Walmart can offer those impossibly low prices that attract so many consumers.

This book will not likely be stocked on the shelves of any Walmart stores, which still prominently feature founder Sam Walton’s biography, but I do not think that was Chan’s goal. It is, however, a useful reference for labor activists and scholars, Walmart critics and analysts, and, hopefully, even a few policymakers.

Walmart in China focuses on three particular nodes. First, it delves deeply into the retail giant’s supply chain in China, as well as the working conditions for the men and women who toil in those factories. Then the book explores the working conditions and management of Walmart’s retail stores in China. Finally, the book looks at the unlikely unionization of some Walmart workers in China. The chapters of this edited volume have been written by an array of well-qualified academics and researchers from the U.S., China, and Australia. Chan, the editor, is an Australian-based scholar who has authored or co-authored numerous books on related topics, and was the co-editor of the China Journal for six years.

It’s fair to say that decisions made in Bentonville, Arkansas—the headquarters of Walmart—have impacts felt around the globe. Nelson Lichtenstein’s chapter provides some background on how Sam Walton did it. First, by regaining some control of pricing from producers. Next, by cutting out wholesalers. Finally, by finding low-cost production platforms such as China, which promised not only cheap labor, but also political stability, a solid infrastructure, and a stable exchange rate.

Thirty years ago, Walmart cynically embraced a “Buy America” campaign, publicizing a few decisions it made to buy products domestically that had been made overseas, even as the overall percentage of goods it imported continued to grow. Then, imports accounted for only 5.8 percent of Walmart’s sales in its U.S. stores. Lichtenstein notes that, as of 2006, 80 percent of the suppliers in Walmart’s database were in China.

The chapter by Xue Hong takes us to Guangdong Province in China, the heart of Walmart’s supply chain, to look at working conditions. Here, the toys, clothes, and retail cornucopia that consumers find on Walmart’s shelves are assembled in factories where, according to outside investigations, labor law violations are pervasive. Walmart did establish an ethical standards program for its suppliers, but that program appears to be little more than window dressing since it does not permit outside audits. It is also counterproductive, since much of the work previously performed by audited contractors is now done by unlicensed and unacknowledged subcontractors to keep costs low, despite the human toll. Workers are reluctant to step forward to report abuses because they fear retribution and potential factory closures as a result of reported violations. Even relatively low Chinese legal standards for work hours and minimum wages seem to make it impossible for many contractors to meet Walmart’s pricing policies, which is why Guangdong may itself fall victim to outsourcing to provinces further inland, as well as to Vietnam, Bangladesh, and Cambodia.

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