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    China Business
     Aug 24, 2006
China's unions emboldened by Wal-Mart success
By Candy Zeng

SHENZHEN - Coming off its success in establishing unions in outlets of militantly non-union Wal-Mart, China's official All China Federation of Trade Unions (ACFTU) has been emboldened to push for unionization in other foreign-invested enterprises across the country.

At least 16 of Wal-Mart's 60 outlets across China have already been organized, while the chain retailer promises to help all

others to establish local unions. And the US-based retail super-giant is planning to open 20 more mega-stores in China.

According to officials with the ACFTU, only about 26% of the
150,000-odd foreign-funded enterprises across the country have so far established trade unions, with a total membership of 4.3 million. The federation has now set an ambitious goal of boosting the ratio to 50% by the end of this year.

The ice was broken with the establishment of the first trade union in Wal-Mart's Jinjiang outlet in Quanzhou in the southeastern province of Fujian on July 29. The inauguration ceremony took place at 7:30am with none of the management attending. In contrast, the inauguration of a trade union in a state-owned enterprise would normally be a solemn affair, attended by company executives and even senior local party and government officials.

"Our success was no accident. We began sending union publications and newsletters to its staff since the Wal-Mart outlet was established in November 2005, after holding fruitless talks with its management," said Chen Xiongnan, vice director with the general office of the Quanzhou Federation of Trade Unions.

After repeated rebuffs, Chen and his fellow union officials approached the outlet's employees directly, sometimes in the middle of the night. "It was as if we are working underground," said Chen. So by July 21, some 30 Wal-Mart employees had handed in applications for unionization to the local authority. But only 25 managed to attend a midnight meeting on July 28 to elect a seven-member union committee, the minimum requirement for such an election under China's labor laws.

Wal-Mart is famously anti-union. Not one of its US stores has a union. It has been known to close stores rather than accept unions. So the Jinjiang unionists approached their mission with some trepidation. At first they were concerned that they would be reprimanded by the company. In addition, they were not sure how to finance the union's activities. Although China's labor law stipulates that an employer must set aside 2% of its total payroll to finance union activities, lack of contributions has been a major obstacle at many non-unionized private firms.

But soon Wal-Mart's Shenzhen and Nanjing outlets became unionized, with the inauguration of their trade unions also taking place at night, after business hours. To sort out the financial problem, the official Nanjing Federation of Trade Unions agreed to subsidize the union with 20,000 yuan (US$2,500), according to the China Youth Daily.

Soon after the debut of Wal-Mart's Jinjiang union, China's official media openly questioned whether the company would punish its unionist employees. Possibly under the pressure of such public sentiment, Wal-Mart held high-level talks with China's union authority on August 9 and agreed that it would help establish trade unions at all of its outlets across China.

"I hope to establish good relations with the ACFTU and its regional branches that would be conducive for our employees and business development," said Joe Hatfield, president of Wal-Mart Asia, adding - and quoting the latest Communist Party line - "it is in line with Chinese government's efforts to build a harmonious society."

Trade unions in China, it should be noted, are not the same as those in the West. They are all controlled by the Communist Party. "Trade unions are not simply about workers' economic interests, they also have to do with political, cultural and democratic rights," said Guo Wencai, an ACFTU official in charge of formation of grassroots unions.

Indeed, China's trade unions are known for their tameness and obedience to the party. The activities they organize for the workers are usually no more than social events or entertainment. They are often criticized as being more like showcases of corporate culture than organs to protect labor rights.

Be that as it may, the government has been encouraging unions to bring more foreign companies into the fold. President Hu Jintao himself has urged the ACFTU to strengthen its union network among multinational companies. He wrote a directive to the group in March to "do a better job of building [Communist] Party organizations and trade unions in foreign-invested enterprises".

The ACFTU now has more than 1.17 million grassroots trade unions across the country. An ACFTU official disclosed that in the first six months of this year, about 9 million workers had joined unions, and more than 80,000 new trade unions been set up.

The Chinese government intends to counter increasing labor disputes with the help of trade unions, according to analysts. For example, labor disputes often occur in the booming Pearl River Delta due to low pay and poor working conditions. As a result, the region has suffered a labor shortage in recent years.

However, it is still in doubt whether Chinese trade unions could serve that purpose. According to the survey by the China's Youth Daily, 71.6% of the respondents believed China's unions had not fully carried out their tasks as set forth by labor officials such as Guo.

An online survey by a popular Chinese Internet portal showed that more than 82% of respondents believed the unions failed to safeguard labor rights, while only 1.5% thought the opposite.

Candy Zeng is a freelance write based in Shenzhen.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

Wal-Mart unionized in China (Aug 1, '06)

Foreign retailers accelerate China plans (Mar 2, '06)


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