China's Trade Union Federation Threatens Foreign Companies over Unionization

China's official Communist Party-controlled trade union, the All China Federation of Trade Unions (AFCTU), is threatening to sue foreign companies such as Wal-Mart, Dell, and Kodak if they don't set up union branches in their China operations. This move is part of the union's effort to penetrate the most dynamic sector of the economy, shore up its declining membership, and boost its lowly political status. According to Anita Chan, a research fellow specializing in Chinese labor issues, the AFCTU feels challenged and is losing membership, and has to do more to survive.

Key Takeaways:

• The All China Federation of Trade Unions (AFCTU) is threatening to sue foreign companies, including Wal-Mart, Dell, and Kodak, if they don't set up union branches in their China operations.
• The unionization drive is an attempt to penetrate the most dynamic sector of the economy, shore up its declining membership, and boost its lowly political status.
• Unlike past unionization campaigns, this one appears to come with teeth and could oblige foreign-invested companies to give the Communist Party a say in the running of their companies' China businesses.
• The trade union federation, the only legal labor organizer in China, plans to collaborate with local governments and company employees to compile a "black list" of foreign-invested companies that have yet to set up union branches.
• Foreign-invested companies that refuse union requests to set up branches "could be sued," according to Yang Honglin, deputy director of the Grass Roots Organ Building Department.
• The push to unionize workers at foreign companies has little to do with workers' rights, but rather to expand the influence of the trade federation and the Communist Party in the fast-growing private sector.
• The campaign is part of the union's effort to show increasing sophistication in going after target companies like Wal-Mart, whose no-unions policy has provoked criticism.

Statistics:

• The All China Federation of Trade Unions has 123 million members.
• Only 2,000 of Shanghai's 5,000 foreign-invested companies have union branches.
• Foreign companies are not required to have union branches in China, but the law requires them to "make rectification" if they refuse to allow unions.

Sources:

• "China's trade union threatens to sue foreign companies over unionisation", ODJ Select via COMTEX.
• Anita Chan, research fellow at the Australian National University.
• Yang Honglin, deputy director of the Grass Roots Organ Building Department.
• Bill Taylor, who studies Chinese unions at the City University of Hong Kong.
• Eastman Kodak Co., Wal-mart Stores Inc., and Dell Inc.