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China threatening foreign companies over trade unions

China's state-run labor union is threatening legal action against foreign enterprises such as Wal-Mart, Dell, Kodak, Samsung and McDonalds for refusing to set up trade unions in their Chinese businesses, state press said yesterday.

"We will continue to press these firms to the end, until they comply with the law," Guo Wencai, head of trade union organizations with the All China Federation of Trade Unions (ACFTU), was quoted by Xinhua news agency as saying.

"Foreign companies should understand the communications role that trade unions play between a company's leadership and its employees," he said.

According to China's trade union law, all employees have the right to join the ACFTU, the country's sole trade union run by the Chinese Communist Party. However, they are outlawed from forming independent unions or organizing collective bargaining activities outside the ACFTU.

The government's tight control over trade unions has led to widespread accusations that the ACFTU favors business and plays a greater role in attracting foreign investment into China at the expense of worker rights.

"To make the case worse, some local governments traded away the requirement of setting up trade unions to encourage foreign investment," said Wang Ying, an official with the ACFTU.

The practice has been condemned by Cheng Siwei, vice chairman of the National People's Congress, who strongly condemned local governments' use of the trade union law to boost economic development and foreign investment, the report said.

"Efforts to set up ACFTU unions in foreign enterprises have been going on for some time but the issue is very complicated," Li Qiang, director of the New York-based China Labor Watch, said.

ACFTU has a poor record in improving labor rights as its influence has waned as state-owned enterprises have been shut down and millions of workers laid off during 25 years of economic reform and opening up, he said.
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