Explaining the Belt and Road Initiative’s Reliance on Chinese Workers

• In Event: Social Policy, Redistribution, and Inequality in China

Abstract

Why do so many projects associated with China’s Belt and Road Initiative (BRI) use Chinese workers rather than host country workers? Even before Xi Jinping’s ambitious overseas infrastructure and development program began in 2013, PRC-invested projects abroad generated distrust because of their reliance on export labor. For instance, there were rumors in many countries that Chinese worksites were staffed by unpaid convicts (Brautigam 2010; Yan and Sautman 2012). Although unverified and possibly spread with malicious intent, such rumors spoke to the concerns of many in the Global South that workers from China undercut local labor markets (Gadzala 2010). Since the BRI’s inauguration, the controversy around these hiring practices has only deepened. In 2016, for example, protests erupted in a town in Kenya over what residents viewed as an excessively small number of jobs created by the Chinese-funded construction of the new Mombasa to Nairobi railway. There is thus reason to believe that using its own workers to the degree that it does undermines the goodwill that Beijing seeks to build with its initiative. Adding to the puzzle, Chinese labor costs are higher than those of most BRI partners outside of Europe. Moreover, although many people are employed by the projects, they are still too few to meaningfully impact employment pressures at home. This all makes the practice seem extremely shortsighted. For the most part, research related to the BRI has tended to focus on how domestic economic crises have driven China’s outward expansion (Ye 2020) and on the opportunities that China’s uniquely statist approach to foreign investment have provided to local governments and civil society groups, especially in Africa (Lee 2017). The experience of Chinese investors has also been explored in interesting ways (Smith 2013). Some work has been done on the working conditions of Chinese guest workers, like Ding Fei’s (2020) study of the “compound labor regime” found on infrastructure projects in Ethiopia and Mimi Zou’s (2016) analysis of labor conditions and labor law in the BRI more generally. However, these studies, while important, have mostly operated at a fairly general plane. This paper adopts a more granular approach to the topic, using data in the form of pay stubs, worksite photos, and worker testimonials collected by an advocacy group to examine the evidence for a pair of hypotheses concerning the Chinese government’s motivations. Specifically, the paper tests whether, in deploying guest workers to such a degree, BRI planners are primarily concerned with maintaining political control over their workforce or whether, instead, a cascading system of sub-contracting by BRI firms, some of it using illegal methods, combined with a still-substantial pool of poor rural poor in China, results in labor costs that are lower than one might initially believe. Because the data come primarily from sites in Indonesia and Serbia, wide range of experiences is captured, allowing for a “most different” case comparison that controls for many contextual factors (Przeworski and Teune 1970). The paper’s findings should offer new insights into the contradictions at the heart of one of China’s most important points of engagement with the world in the twenty-first century, as well as the dilemmas of global aid and investment projects more generally, including those led by the United States and Europe.

Authors

• Manfred Elfstrom, University of British Columbia, Okanagan

• Anita Chan, Australian National University