China Proposes Compulsory Unionization for Foreign-Funded Companies

Strategic Insights -

China's top trade union official, Wang Zhaoguo, has proposed an amendment to the Trade Union Law, making it compulsory for foreign-funded companies to unionize. This move aims to counter obstinate refusals by foreign companies, including the world's leading retailer Wal-Mart, to recognize trade unions for employees in China. Wang, president of the All-China Federation of Trade Unions (ACFTU), argued that many foreign companies have taken advantage of the current law, which only specifies that employees may apply for setting up labor unions at their will, but fails to obligate companies to assist in their establishment.

Key Takeaways:

  • China's top trade union official, Wang Zhaoguo, has proposed an amendment to the Trade Union Law, making it compulsory for foreign-funded companies to unionize.
  • The move aims to counter obstinate refusals by foreign companies, including Wal-Mart, to recognize trade unions for employees in China.
  • The current law only specifies that employees may apply for setting up labor unions at their will, but fails to obligate companies to assist in their establishment.
  • Wal-Mart has refused to recognize a trade union for its employees in China, despite repeated efforts from ACFTU to negotiate with the company.
  • ACFTU has set up 1.17 million branches across China with 150 million members, but only about 7.7 million trade unions are established in companies.
  • Wal-Mart plans to open at least 18 stores in China this year, accelerating its expansion in the country.

Statistics:

  • China has more than 100,000 overseas companies, plus those from Taiwan, Hong Kong, and Macao, but only about 30% have established labor unions.
  • ACFTU has 1.17 million branches across China with 150 million members.
  • About 7.7 million trade unions are established in companies.
  • Wal-Mart plans to open at least 18 stores in China this year.

Sources:

  • Asia Pulse, July 6
  • Los Angeles Times (Wal-Mart's store openings in China)
  • Chinese law on Trade Unions
  • ACFTU's statistics and reports