Industrial transformation and regimes of production in the Chinese automotive sector

Abstract:

China’s electric vehicle industry with its strategic core of battery manufacturing has assumed a world-leading position. It is driving the transformation of the automotive industry and is rapidly developing global production networks that challenge the traditional car makers in developed countries. However, the transition of China’s car industry towards green and digital vehicles is also producing a structural crisis in its traditional auto industry dominated by joint ventures between global car makers and Chinese state-owned enterprises. Whereas the new NEV companies are hiring large numbers of new employees, the joint ventures are closing factories and laying off workers. The traditional car makers with their relatively upscale wages and employment conditions for mostly urban workers have to compete with low-wage labor regimes originating from the electronics industry and its large work forces of migrant workers.

The planned contribution will take a closer look at this development and its implications for the labor movement. We will provide an analytical framework to understand the changing production regimes in the state-dominated traditional auto industry and the mostly private NEV sector, based on our earlier theoretical and empirical work on this subject (Luethje/Luo/Zhang 2013, Luethje, Wu and Zhao 2023). We will then look at employment practices and the changing labor market in the Chinese automotive sector. Finally, we will analyze the policies of workforce recruitment and the regimes of skill formation in the “old” and “new” segments of the Chinese car industry.

Our analysis may demonstrate that the transformation of the automotive sector in the ascending global center of EV production is causing similar ruptures in employment relations as known from the traditional centers of car manufacturing. Securing a just transition based on decent work, labor rights and trade union representation, therefore, becomes a key issue for the labor movement in the global North and South. Trade union organizing, standards of decent work and quality vocational training for workers seem to be core topics, on which global solidarity can be built. The international labor movement should promote exchange and dialogue on these issues with workers in China and East Asia, rather than succumbing to protectionism and nationalist ideologies.

Our paper is based on extensive empirical research carried out in cooperation with major academic institutions in South China. It will provide fresh insights from a recent project on skill regimes and vocational training in the region.