The low human rights advantage and the failure of globalization: the challenge of China Inc.

Purpose We develop a framework of the low human rights advantage – labor repression, state discretionary expropriation and total control – that reduces factor costs and enables coordinated resource mobilization. These mechanisms generate economic advantage only when combined with access to global markets, which provide demand, capital and technology. By leveraging this low human rights advantage, the Chinese state has transformed China into a giant corporation that combines the agility of a firm with the resources of a nation, thereby reshaping global competition. Economic integration without corresponding political integration is a major contributor to the failure of the current wave of globalization. Design/methodology/approach The study employs a conceptual and comparative political-economy approach. It integrates international business theory, institutional analysis, and historical analogy to develop two linked frameworks: the low human rights advantage and the China Inc. Model. Drawing on prior empirical research and historical comparison – particularly the antebellum USA and South Africa under apartheid – the paper theorizes how economic integration across incompatible political systems generates systemic instability. The analysis is theory-building rather than empirical testing. Findings The paper finds that low human rights operate as an institutional subsidy when embedded in global markets, lowering costs of labor, land and capital, and mobilizing national resources. China's global competitiveness is shown to depend on the systematic suppression of rights. Given the low human rights conditions, the party-state has transformed China into a giant corporation with firm agility and state capacity, functioning simultaneously as both a regulator and a market actor, thereby enabling nation-level strategic mobilization and coordination. Globalization without political integration, therefore, produces asymmetric competition, industrial hollowing, dependency and rising geopolitical risk. Research limitations/implications While providing a proposition that can be empirically tested, this study does not do econometric testing of the proposed mechanisms. Future empirical research could use cross-national indicators and firm-level data, and extend the analysis to other low human rights regimes. Practical implications For policymakers, the findings suggest that economic openness without political conditionality is unsustainable. Trade, investment and supply-chain policies should account for institutional asymmetry and coercive advantages embedded in authoritarian systems. For firms, the analysis highlights heightened risks associated with dependence on low-rights regimes, including political exposure, regulatory uncertainty and supply-chain vulnerability. Strategic decisions should incorporate institutional risk alongside cost considerations. Social implications The paper reframes human rights as a structural economic variable rather than solely a moral concern. It shows how the suppression of rights abroad can undermine employment, social stability and democratic norms in high-rights societies, while reinforcing authoritarian control domestically. Globalization without political integration shifts adjustment costs onto citizens in democracies and weakens the normative foundations of the liberal international order. Originality/value This paper offers a novel framework linking human rights, political and economic organizational forms and global competition. By conceptualizing low human rights as a source of comparative advantage and modeling China as a Nation-as-Firm, it advances international business and emerging-market scholarship beyond distributional or geopolitical explanations. The study provides a new lens for understanding deglobalization and the institutional limits of market integration in a politically fragmented world.