Regionalism, Uneven Development and the Changing Territoriality of Labor Regimes across East Asia

Dae-oup Chang

As lucidly presented in an ACSS working paper, a striking feature in contemporary capitalism is the heightened prominence of the regional to the making of both the ‘national’ and ‘global’’. It is particularly the case in East Asia that produces over a third of the world’s merchandise export. Regional and global processes are mutually-constitutive in this region as the making of this ‘global factory’ has been marked by a twin-process involving tighter integration of the eastern part of Asia and the part being an integral part of the global. Mainstream commentators argue that this process creates win-win conditions for inclusive development within the region and results in the ascent of the region vis-à-vis other regions.

However, East Asia’s growth through integration accelerates uneven rather than harmonious development. Importantly, this uneven development cannot be understood by looking at unequal ‘exchange’ relations built by leading firms or stronger economies in the region. Rather, it is important to connect this regional dynamics to class formation across East Asian economies. One way of doing so is to investigate how transnational capital flows within the region affects the territoriality of capital relations and labor regimes reproducing such capital relations. Labor regimes are a good example of ‘the assumed national-boundedness of many standard social science concepts’ as the physical location of labor regimes within national boundaries creates a tendency for transnational dynamics to be underplayed in understanding labor regimes. The increasing intra-continent flows of capital and complex macro-regional production networks built by East Asia’s TNCs however make it increasingly impossible for us to understand labor regimes as nationally-bounded.

During the three decades up to 2018, global inward FDI flows increased by eight times. During the same period, FDI flows to East Asia increased by 28 times and the majority of it came from within. This capital flows precipitated the emergence of what can be called here transnational labor regimes (TLRs). The making of TLRs involves two interwoven processes. First, transnational actors, institutions, and motivations play more important roles than before in building and maintaining labor regimes. Labor institutions in developing countries often lack the willingness and resources to maintain labor regimes and allow governance gaps in labour regimes that are often filled with CSR schemes, and non-binding labor monitoring schemes of international organizations and trade agreements. Second, emerging TLRs are being integrated into transnational hierarchies built by East Asian TNCs that participate in the maintenance of TLRs across individual economies and coordinate their activities in different localities to enhance their competitive position globally. Adding downward pressure on labor standards and welfare, TLRs negatively affect workers in developing economies. The fact that contemporary workers’ struggles in East Asia have frequently emerged from within TLRs reflects their negative impact on workers in East Asia. The notion of TLRs can illustrate the reasons why workers in developing countries suffer from poor labor standards despite economic growth and tighter integration by highlighting the dynamics of class formation in East Asia’s uneven development.

Dae-oup Chang is Professor of Global Korean Studies at Sogang University. He is the author of Capitalist Development in Korea: Labour, Capital and the Myth of Development State (2009, Routledge). His research focuses on how Korean capitalism affects Asia’s developing regions through migration, investment and aid.