Disentangling public opposition to Chinese FDI: trade unions, patient capital, and members’ preferences over FDI inflows

Summary

This article investigates if union membership affects foreign direct investment (FDI) preferences in ways that vary across investors’ country of origin.

The country of FDI origin should influence how union members assess FDI, because it provides cues about what the economic prospects of (unionized) workers will look like under different foreign investors. Arguably, the salient attribute of foreign investors is whether they originate from a country that is an important form of patient or impatient capital.

Swiss individuals were asked to evaluate FDI from China and Europe (entities embodying patient capital) and from the United States (a country embodying impatient capital).

I argue and show that the gap in enthusiasm for European FDI versus American FDI increases with union membership, while the gap in enthusiasm for American FDI versus Chinese FDI decreases with membership.

Complementary qualitative analysis of reports, documents, and testimonies by trade unions in several continental European countries show that their views are in sync with those of their members, suggesting that unions shape their members’ FDI preferences.

The findings have important implications for the politics of backlash against economic globalization.

About the Author

Damian Raess is Senior Researcher at the World Trade Institute, University of Bern. He is the principal investigator of the project BRICS Globalization and Labor Protections in Advanced and Emerging Economies, funded by the Swiss National Science Foundation. He is the co-author of the most comprehensive dataset on labor provisions in preferential trade agreements (LABPTA dataset).