Labour Standards Along 'One Belt One Road'

Abstract

Chinese multinational enterprises (MNEs) are emerging as increasingly influential actors in the global political economy. Since the late 1990s, China has adopted a ‘Going Out’ industrialisation policy entailing the accelerated internationalisation of Chinese firms to acquire assets and expand business operations abroad. The centrepiece of the forthcoming phase of the ‘Going Out’ strategy is the ‘One Belt One Road’ (OBOR or ‘Belt and Road’) initiative, aimed at fostering closer economic connectivity between China and over 60 other countries with an emphasis on infrastructure and transportation projects.

With the rapid expansion of Chinese outbound investments, there have been growing controversies over the social impacts on host countries. The conduct of Chinese state-owned enterprises and private firms investing along the ‘Belt and Road’ are likely to be subject to ever increasing scrutiny. OBOR has also been seen by some as a geo-political strategy that reflects China’s desire for a bigger role in global affairs. As such, there may be increasing expectations among the international community that China should ensure that its firms act as ‘good corporate citizens’ abroad. Indeed, unfavourable consequences for China’s image have already prompted the government to introduce regulations, guidelines, and policies in recent years that aim to govern the conduct of Chinese MNEs. There has also been an emerging set of corporate social responsibility schemes and codes of conduct adopted by Chinese MNEs and industry groups, often with the involvement of government authorities.

This paper addresses a critical issue that arises as to the ways in which the world’s largest industrialising economy, in pursuing a new industrial development strategy that will broaden its role in global markets and production networks as well as its potential geo-political influence, may shape the governance of international labour standards. Could China (including its public and private actors) become a new standard-setter?

Keywords: Chinese multinationals, transnational labour standards, corporate social responsibility, OBOR, belt and road, Chinese investments

JEL Classification: J8, M14, F23