Chinese Investors in Vietnam and Cambodia and their Impact on Industrial Relations Systems and Labour Standards

As China’s growing global role and increasingly expansive policies at home and abroad gain attention, the governments of neighbouring countries are paying very close attention to China’s expanding influence in their countries and especially in their countries’ pillar industries. In Vietnam, China’s outward direct investments (ODI) reached USD 2.28 billion between January and November 2019, nearly double that of the same period in 2018, turning China into Vietnam’s second biggest investor. Cambodia attracted ODI worth nearly USD 3.6 billion in 2019, and 43 per cent comes from China—currently by far the largest investor in Cambodia. Previous studies have shown that ODI has sometimes been a crucial factor influencing a country’s legal structure, industrial relations system and labour standards. But no systematic research has yet used a comparative perspective to examine the relationship among China’s rapidly expanding economic policies, global production system and influence on neighbouring countries’ industrial relations systems. Nor are there any studies systematically comparing the managerial behaviour of China’s investors and the responses from actors in the invested country, such as government officials, trade union organizers, business representatives, workers, local and international NGOs, etc. This research project will identify the similarities and differences in the industrial relations systems used in Chinese-owned factories in Vietnam and Cambodia. As Vietnam and Cambodia have very different legal and institutional structures as well as civil society organizations and traditions of trade unionism, we expect to encounter different managerial logics by Chinese managers in response to the legal and industrial relations systems of the two countries. We will also explore the roles and impacts of the market, local state and civil society, and we will closely examine the impacts on workers’ working and living conditions.

We will use Ho Chi Minh City (HCMC) in Vietnam and Phnom Penh in Cambodia as our major field sites to conduct this comparative study. Both cities are the two countries’ major receiving destinations for foreign investment, and have the most foreign enterprises. In order to keep the corporations and industry constant in our comparison, we will only focus on the garment industry—Cambodia’s largest and Vietnam’s second largest export sectors today. Our data collection will focus on documentary research and a large number of semi-formal interviews and observations. As part of the research, a total of approximately thirty PRC investors and one hundred Vietnamese and Cambodian garment workers (fifty from each country) will be interviewed. While the focus of this study is on PRC invested factories, another thirty workers from garment factories under domestic ownership and other foreign nationalities will also be interviewed, as will relevant government officials. This is relevant given some studies have suggested that PRC investors’ management practices, recruitment policies and relationship with local government officials are different from those of other countries. Managerial staff will also be interviewed at factories in Vietnam and Cambodia. We will also interview local trade union officials, business association representatives, and local and international NGO officers to understand their responses to the PRC investors’ behaviour.

This research will contribute to current debates on the global production chain, industrial relations systems, and labour standards, as well as expanding our knowledge of the current situation in Vietnam and Cambodia and of China’s overseas industrial investments. The research findings will be presented at labour studies and development studies conferences and will be published in scholarly journals and potentially as a scholarly book.