Foreign Direct Investment and Labor Rights Protection in China: A Tale of Two Sectors

Abstract

The impact of foreign direct investment (FDI) on labor rights protection in developing countries has been the subject of scholarly debate in recent years. Proponents of globalization are sanguine about the impact of FDI and trade on labor standards, arguing that the internationalization of production positively affects labor protection by promoting economic growth through technology transfer and employment creation. Critics of globalization, however, contend that FDI generates a “race to the bottom,” as developing countries compete to lower wage levels and labor standards so as to lower the cost of production for multinational corporations (MNCs).1 As the interests of firms are privileged over those of workers, we should be witnessing a downward convergence in the economic and social policies of developing countries.KeywordsForeign Direct InvestmentMinimum WageCollective BargainingChild LaborLabor ProtectionThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.