Labor Brokers and Obfuscatory Relational Work in China’s Manufacturing Sector

Guowei Liang, Johns Hopkins Univeristy

This paper examines the strategies used by labor intermediaries in China to navigate regulatory constraints and facilitate informal labor practices in the manufacturing sector. Drawing on Rossman’s theory of exchange structures—bundling, brokerage, and gift exchange—the analysis highlights how labor brokers reconcile formal rules with capital’s need for flexibility, often at the expense of worker protections. Bundling practices blur the line between compliance and exploitation by combining legally compliant labor contracts with informal wage manipulation schemes, such as the “price difference” model, which minimizes companies’ obligations for social insurance and other benefits. Brokerage structures further shift accountability, as multi-tier subcontracting distances employers from legal responsibilities, enabling them to avoid direct liabilities related to temporary and dispatched workers. Gift exchange enhances these dynamics, as intermediaries use bribery and relational work with schools to secure pipelines of low-cost student labor, whose precarious status undermines wage standards and labor protections.

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 Presented in Session 1. Economics