Doug Guthrie's study of Shanghai factories reveals that western investment spurs more progressive policies in the workplace
What is the relationship between foreign investment and social reform in mainland China? It's a question that has inspired much discussion and debate. But until now, there has been a dearth of rigorous, field-based research on the issue.
NYU sociologist Doug Guthire has just published a book based on his groundbreaking study on management and personnel practices among factories in Shanghai. Entitled "Dragon in a Three-Piece Suit: The Emergence of Capitalism in China," Guthrie's book presents evidence that foreign investment is helping to spur social reform in China.
Guthrie said, "Our research suggests that Chinese officials, managers and citizens learn about democracy and the rule of law through negotiations and practices that they encounter in a rational marketplace. There can be no doubt that Western investors are a fundamental part of the emergence of a rational marketplace in China."
Guthrie also shows that there is strong evidence to suggest that foreign investment has a positive impact on the emergence of rational labor relations -- an important, but often ignored, aspect of human rights in China.
Guthrie's work is receiving praise for the unique breadth and depth of its research. Using The Directory of Chinese Organizations and Institutions -- a government publication that he unearthed at the Shanghai Municipal Library -- Guthrie developed a randomized sample of some 81 factories is Shanghai. At each of these firms, he conducted unchaperoned interviews with managers and workers. In addition, he scrutinized financial records and poured over policy statements, personnel files and other paperwork.
Based on this research, Guthrie has found indications that foreign investment spurs social reform. Among his findings, Guthrie discovered that:
- Chinese firms that have formal relations with foreign companies(that is, a formal joint venture company) pay their workers some 15% more than firms that do not have contact with foreign companies.
- Among Chinese firms that have formal relations with foreign companies, 75% have formal grievance filing procedures to protect workers; the comparative statistic among firms have no contact with foreign companies is 48%.
- Among Chinese firms that have formal relations with foreign companies, 77% have formal organizational rules to structure the workplace; the comparative statistic among firms that have no contact with foreign companies is 45%.
- Among Chinese firms that have formal relations with foreign companies, 58% have formal hiring procedures; the comparative statistic among firms that have no contact with foreign companies is 33%.
Craig Calhoun, president of the Social Science Research Council, said, "Dragon in a Three-Piece Suit brings state-of-the-art institutional analysis together with a brilliant empirical study of the real world of economic reform in China. Combining fieldwork, interviews, and unique quantitative data sources, Guthrie offers the clearest account available of how China's reforms translate into concrete organizational practices. His study is among the best at illuminating how markets and firms work in transitional economies."
Doug Guthrie is an assistant professor of Sociology at New York University. In addition, he is the director of the East Asia Program at the Social Science Research Council. He received his PhD. In 1997 from University of California at Berkeley. His dissertation -- which formed the original basis for Dragon in a Three-Piece Suit -- received the American Sociological Association's Dissertation Award, which is given annually to the nation's best dissertation in the sociology.
Dragon in a Three-Piece Suit is published by Princeton University Press. Its U.S. publication date is August 30, 1999.