One of the core assumptions of recent American foreign policy is that China's post-1978 policy of "reform and openness" will lead to political liberalization. This book challenges that assumption and the general relationship between economic liberalization and democratization. Moreover, it analyzes the effect of foreign direct investment (FDI) liberalization on Chinese labor politics. Market reforms and increased integration with the global economy have brought about unprecedented economic growth and social change in China during the last quarter of a century. Contagious Capitalism contends that FDI liberalization played three roles in the process of China's reforms. First, it placed competitive pressure on the state sector to produce more efficiently, thus necessitating new labor practices. Second, it allowed difficult and politically sensitive labor reforms to be extended to other parts of the economy. Third, it caused a reformulation of one of the key ideological debates...

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