Foreign Direct Investment in the City of Qingdao: Experiences of Chinese Workers in Foreign-Invested Enterprises, 1996 to 2009

The debate concerning whether foreign investment in developing nations benefits or exploits workers is a highly emotive and unresolved debate. This dissertation contributes to literature that explores the impact of foreign direct investment (FDI) on a host economy, more specifically on the experiences workers employed within foreign-invested enterprises in a developing nation. Amongst developing nations, China has absorbed the lion’s share of FDI throughout the 2000s and is therefore a sensible location to study the effects of FDI on a developing nation host economy. Given the variety in levels of economic development across China, we avoid errors of generalisation by targeting a specific location. Shandong is one of the most important – and understudied – provinces in China, contributing significantly to China’s economy and being the destination for an increasing share of China’s FDI; within Shandong, Qingdao is the most popular destination for FDI. Existing literature that explores the effects of FDI on host nation employees either takes a quantitative, macro-economic level approach, such as International Business literature, or uses qualitative methodology to give anecdotal evidence of worker experiences, such as in the globalisation and labour studies bodies of literature. We combine both these approaches to investigate the experiences of FIE employees in Qingdao. The key research findings are: a domination of South Korean, wholly foreign-owned enterprises targeting the relatively more labour-intensive manufacturing sectors from 1996 to 2006 in Qingdao, having implications in terms of FIE employment opportunities and human capital accumulation; a sharp decline in the size of the FIE workforce from 2007 to 2009, highlighting the potential problems a developing nation may face if it has a large concentration of ‘flexible’ foreign investments; and reports of a wide range of experiences of FIE employees engaged in more white-collar roles, including positive development opportunities and negative experiences of discrimination.