Chinese Mergers and Acquisitions-Type Outward Foreign Direct Investment: A Potential Impact on Labor Conditions in China?

Mr Wanlin Ren1

1World Trade Institute, University Of Bern, Bern, Switzerland

China’s Outward foreign direct investment (OFDI) has been growing rapidly since the beginning of the 21st Century, with considerable investment in developed economies with the form of Mergers and Acquisitions (M&As). M&A-type FDI has a profound economic and social impact on both the investor and the target firm. Chinese firms have been showing enthusiasm for M&A deals in Europe after the 2008 economic crisis: Many renowned European companies have been taken over by Chinese owners, especially in the manufacturing industries. How would this new phenomenon affect labor issues, especially given the fact that labor protection in Western Europe enjoys high standards and restrictive regulations than Chinese ones? Would this become a potential channel for labor diffusion from Europe to China? This paper addresses the relationship between M&A-type of Chinese OFDI and its potential social influences on labor issues in China. A panel data empirical analysis based on Thomas Reuter’s Securities Data Company (SDC) Platinum database shows that the difference of labor conditions between China and Europe is decreasing when Chinese capital flowing into Western Europe. It may suggest an improvement of labor conditions in China. This result holds with a narrow-defined working condition variable but not with working hours.


Biography

Wanlin Ren is a political science doctoral student within the Swiss National Science Foundation (SNSF) project “BRICS globalization and labour protections”. His research focuses on the impact of growing outflow Chinese foreign investment on labour issues in China.

Originally from Beijing, Wanlin has extensive professional experience before the PhD studies. He has worked for the United Nations Office for Project Service (UNOPS) in Copenhagen; the World Trade Organization (WTO), the International Labour Organization (ILO), and UN Office in Geneva; the UN Department of Economic and Social Affairs (UNDESA) in New York; and the US – China Business Council (USCBC) in Washington DC.

Wanlin has a Master of International Economics from the Graduate Institute of International and Development Studies (IHEID) and a Master of Arts in International Affairs from the American University in Washington DC. He obtained his Bachelor of Economics from the Capital Normal University in Beijing.

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