JennyChan.PhDThesis.2014.FINAL

Giant manufacturers, rather than small workshops, are better able to “respond to
shortening product cycles and increasing product complexity,” thus becoming
powerful players in just-in-time production networks. 160 They serve multiple clients
to climb the global value chains. They have been upgrading and growing in size and
scale. Richard Appelbaum finds that East Asian contractors, ranging from footwear
and garments to electronics, have been integrating vertically in their supply
chains. 161 Joonkoo Lee and Gary Gereffi explain the co-evolution process that
capital accumulation of smartphone leaders (such as Apple and Samsung) have
advanced alongside innovation within their large assemblers. 162 Electronics
manufacturers provide value-added services, component processing, and final
assembly in “one-stop shopping” to technology firms and retailers. Not only
production tasks, but also inventory management and logistics, are being
concentrated in strategic factories, resulting in ever stronger mutually dependent
relations between buyers and suppliers.
And yet global buyers, facing strong competition, seek to lower costs, strengthen
control over suppliers, and speed up to release newer products. Large buyers and
retailers continue to dominate the business relationship and impose their will on their
contractors. “The determination of retailers [such as Walmart] to cut costs to the bare
bone leaves little room for contractors [based in China] to maintain labor
standards.” 163 Similarly, Edward Webster, Rob Lambert, and Andries Bezuidenhout
highlight the power asymmetry between buyers and contractors, in which big firms
like LG take advantage of their dominant market position to “actually demand cuts
in costs” from suppliers. 164 The buyer-driven pattern is characteristic of numerous
160 Guido Starosta, 2010, “The Outsourcing of Manufacturing and the Rise of Giant Global
Contractors: A Marxian Approach to Some Recent Transformations of Global Value Chains,” ew
Political Economy 15(4), p. 546.
161 Richard P. Appelbaum, 2009, “Big Suppliers in Greater China: A Growing Counterweight to the
Power of Giant Retailers,” China and the Transformation of Global Capitalism, edited by Ho-fung
Hung, Baltimore: The Johns Hopkins University Press, pp. 65-85.
162 Joonkoo Lee and Gary Gereffi, 2013, “The Co-Evolution of Concentration in Mobile Phone Value
Chains and its Impact on Social Upgrading in Developing Countries,” Capturing the Gains: Economic
and Social Upgrading in Global Production Networks, Working Paper 25.
http://www.capturingthegains.org/pdf/ctg-wp-2013-25.pdf
163 Edna Bonacich and Gary G. Hamilton, 2011, “Global Logistics, Global Labor,” The Market
Makers: How Retailers are Reshaping the Global Economy, edited by Gary G. Hamilton, Misha
Petrovic and Benjamin Senauer, Oxford: Oxford University Press, p. 225; see also, Richard
Appelbaum and Nelson Lichtenstein, 2006, “A New World of Retail Supremacy: Supply Chains and
Workers’ Chains in the Age of Wal-Mart,” International Labor and Working-Class History 70 (Fall),
pp. 106-25; Nelson Lichtenstein, 2009, The Retail Revolution: How Wal-Mart Created a Brave ew
World of Business, New York: Henry Holt and Company; Anita Chan, ed., 2011, Walmart in China,
Ithaca, New York: Cornell University Press.
164 Edward Webster, Rob Lambert and Andries Bezuidenhout, 2008, Grounding Globalization:
Labour in the Age of Insecurity, Malden, MA: Blackwell Publishing, p. 58.
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