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:: ASrIA Briefing Materials

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What, if anything, can investors do to influence worker conditions in China for the better?

In December ASrIA released a report, Labour Standards in China, the Business and Investment Challenge, which detailed certain risks and raised five key issues and related dilemmas that investors in China should consider.

China has been called the 'work-shop of the world'. Since 1992, China has been the second most favoured destination of direct foreign investment, after the US. This trend has been strengthened since China's accession to the WTO in November 2001. Though there are several model factories in China which strive to adopt the highest international standards, the working conditions at many are still poor. Some multinationals have suffered severe adverse publicity for sourcing from factories in China that pay less than minimal wages, have unsafe and unhealthy working conditions, prevent free association, and even employ child labour. If SRI funds choose to avoid companies that have invested in China because of labour issues they would exclude many major multinational companies. On the other hand, if SRI investors are to adopt policies of active engagement with multinationals, or directly with local Chinese companies, on labour and social issues, what should they be, and what bottom lines, if any, should be adopted?