Anti-union Wal-Mart kowtows to the Chinese Communist Party

Special to World
Wednesday, December 1, 2004

Wal-Mart has caved in to the Chinese Communist Party and is permitting a union in its China operations. This is despite Wal-Mart's staunch anti-union position in the U.S. and the rest of the world.

The world's largest retailer, Wal-Mart operates 43 stores in China out of a total of more than 5,000 across the globe. But the company has rapid expansion plans, and intends on opening another 10 stores in China next year.

China's state-controlled All-China Federation of Trade Unions [ACFTU] had threatened to sue Wal-Mart and other non-Chinese companies if they did not set up union branches. Wal-Mart now says that it will respect "the wishes of employees."

An ACFTU official told the official Xinhua news agency: "Wal-Mart China has shown a positive change of its long-standing non-union attitude."

The Arkansas-based behemoth didn't have much choice. Chinese Communist leadership, faced with growing industrial disputes especially in the Pearl River Delta complex, which leads the export drive, is on a tear to unionize foreign enterprises. The ACFTU is a sophisticated version of what American trade unionists used to call company unions. Not only are they closely affiliated with the Communist Party, but also often their leadership is local government/Party officials. Modeled after those in the old Soviet bloc, they are instruments of control rather than a bargaining device against management.

The new campaign is more aggressive than anything preceding it. And there is some concern in foreign circles that the new unions would provide the Communist Party, or even local government, management decision input and a new instrument for widespread corruption.

U.S. companies, including computer maker Dell, Eastman Kodak Co. and Wal-Mart had kept their heads down. But Wal-Mart earlier on had said it would not permit unionization in China. Figures released by semi-government sources last year said that 2,000 of Shanghai's 5,000 foreign-owned companies many of them Taiwanese had already succumbed.

As so often happens with China's commercial code, it is not clear whether foreign companies are required to have unions. But ACFTU top leadership which reaches into the upper Party echelons insists that the law amended in 2001 requires all companies to be unionized. The law is vague about penalties, stating only that they will be required to "make rectification."

Bill Taylor, a student of Chinese unions at the City University of Hong Kong, says the campaign appears likely to increase unionization in the Chinese private sector as well as among foreign companies. Until now they have had no Communist Party organization as exists in state-owned enterprises. Chinese media occasionally have reported independent union agitation, which authorities had broken after strikes and violence.

Beijing has begun a campaign to unionize temporary workers that form a large part of the workforce in such metropolitan centers as Shanghai, and who increasingly are seen as a potential source of instability.

Most migrants come from China's overpopulated rural areas, dismissed workers from the large, bankrupt state industries, which Beijing is trying to trim, and retired workers. There are estimates that 100 million rural migrants have recently moved into urban areas. Many live in relatively primitive conditions.

Copyright 2004 East West Services, Inc.

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