While recent years have seen investors fleeing a Europe mired in crisis, Chinese inward investment has increased dramatically. Should workers in now-Chinese-owned firms fear worsening employment and working conditions? Are “European-style” worker representation and collective bargaining under threat?
Overall, the speakers at an ETUI seminar on Chinese investment in Europe were upbeat. Wolfgang Müller was tasked by IG Metall with surveying German capital goods, motor manufacturing and electronics firms in which there has been investment from China.
"They take a very pragmatic approach. Where unions have a strong presence in firms, they accept that and respect our social partnership model, don’t throw collective agreements into question and don’t impede the working of employee representation bodies", he testified in Brussels on 11 December.
While acknowledging that trade unions had little foothold in three Chinese-owned firms - Huwai, Lenovo and ZTE-Medion – established in Germany, he considers the situation to be comparable in other IT firms and so unrelated to the nationality of the investors. In fact he welcomed the Chinese long-term investment strategy in industrial sectors relying on a skilled workforce.
Damian Raess of the University of Geneva’s Department of Political Science and International Relations concurred with that sense of relative confidence by European workers in Chinese investors. He presented the findings of a study showing that the workers most receptive to Chinese investors are casualized manual workers with low educational qualifications. Other research shows that Chinese investors are no more eager than their rivals to invest in European countries with low levels of social protection. Summing up, the researcher wondered if it was a case of "Much ado about nothing"? He had previously stressed that China's share of inward foreign direct investment in the European Union was less than 1% in 2011.
In his introductory presentation to the seminar, ETUI researcher Jan Drahokoupil had presented a table showing that Chinese investment in the EU accounted for one-twentieth of United States foreign outward investment in 2012, nevertheless pointing to recent massive investments in Chinese state-owned enterprises in strategic sectors (energy, transport) in Greece, Portugal and Italy.
Graham Hollinshead of the University of Hertfordshire sees the same phenomenon of "state capitalism" at work on the periphery of the European Union. The Reader in International Human Resource Management unveiled the flip side of the "Sino-Serbian strategic partnership", revealed most symbolically in the – near-completed - construction by the public company China Road and Bridge Corporation (CRBC) of a bridge over the Danube near Belgrade. "This project is meant to serve as a calling card for Chinese firms and give them access to the European market," he said. These investments in Serbia can also serve Chinese geopolitical interests because the local populace still remembers Beijing’s opposition to the NATO bombing during the Yugoslav conflict. In addition, the development of Serbia’s road infrastructure ties in very neatly with China’s takeover of part of the Greek port of Piraeus.
An even darker side of Far Eastern investment in Europe was revealed by University of Padua sociologist Devi Sacchetto. He had conducted a survey of workers at two Foxconn factories in the Czech Republic supplying electronics to Apple, HP, Samsung, etc. He described how the Taiwanese electronics giant had introduced a work segmentation process that was severely detrimental to workers’ interests, particularly the non-Czech workers recruited by agencies in Poland, Ukraine, Romania, Bulgaria and even from outside Europe. They find themselves on short-term work contracts, lower pay than their Czech colleagues and working a 7-day week. Above all, Foxconn has set up a system of social control of this workforce - including outside of work - based on housing them in dormitories controlled by the recruitment agencies.
To download the presentations made at the event please click here
Maarten van Klaveren and Kea Tijdens (AIAS, Amsterdam), Denis Gregory (TURU, Oxford)
Valeria Pulignano (KU Leuven)