Labor-intensive production has been the main driving force for China’s economic development in recent years. At the same time labor conditions in Chinese factories were closely watched as an increasing number of violations were reported. Areas of violation cover among others long working hours, unpaid or poorly paid labor and child labor. These problems also led to an increasing number of strikes but also to a high number of suicides (see among others Chan / Pun 2010 and China Labor Watch 2015).
While foreign direct investment (FDI) from industrialized economies had encouraged the development of the China’s economy, China invested strongly in other economies in recent years. Therefore, it has to be asked whether Chinese FDI also lead to an “export” of bad labor conditions. Potential effects for Europe are in the centre of the discussion as European Economies are seeking for FDI inflows since the global financial slump of 2008/2009.
Based on the theoretical distinction of varieties of capitalism, which are applied to emerging economies in this paper and the characteristics of Chinese multinational enterprises the role of the state and the characteristics of the institutional setting e.g. Chinese wage bargaining structure are explained. Furthermore, experiences from former expansionary phases of Chinese enterprises are compared with the situation in Europe.