11-07-06, 12:24 am

In recent years, the All-China Federation of Trade Unions (ACFTU), the largest labor organization in the world, has launched a time-consuming, seesaw battle with Wal-Mart, the largest multinational retailer in the world. The prolonged struggle between unionization and counter-unionization, waged by the ACFTU and the management of Wal-Mart (China), lasted for four years, and finally ended with a result that created a great sensation in China and throughout the world. Suddenly and unexpectedly, the ACFTU had now succeeded in setting up grassroots unions at all of Wal-Mart's 60 branch stores in China within a period of two months. How did the ACFTU manage to establish unions at Wal-Mart? What are the implications of this achievement? What follows is a brief analysis.

Multinational giant Wal-Mart has been criticized for its anti-union stance for years. Since its entry into Chinese market in 1996, in 10 years Wal-Mart has opened 60 stores in 30 cities nationwide with more than 30,000 local employees, headquarted in Shenzhen, Guangdong Province. This year it stepped up to open new stores in China, at a rate of more than 20 stores per year.

The ACFTU has always asked Wal-Mart to permit the formation of unions in its China stores. As an alternative to Wal-Mart’s traditional policy of intense resistance to unions, the ACFTU has repeatedly stated its goal of creating a harmonious, win-win labor relationship at Wal-Mart that will both promote the development of the enterprise and defend the rights and interests of Wal-Mart workers.

In 2006, the ACFTU made a series of unprecedented moves to form trade unions at Wal-Mart and achieved important progress. This process can be divided into four stages:

The first stage involved coordinating the organizing initiative and striving to gain employee support. From February to May, ACFTU leaders visited Wal-Mart’s Shenzhen headquarters a number of times, laying out the position of the ACFTU and proposing that trade unions be formed at all Wal-Mart stores in China, in accordance with China's Trade Union Law. This drive had a significant impact at Wal-Mart headquarters.

The second stage involved doing the hard work necessary to obtain a breakthrough. Local trade union officials assembled at areas near the Wal-Mart stores in order to carry out an education campaign. When staff got off work, organizers provided them with union literature to read and mobilized them to join the union. They also pledged to provide powerful protection to those who joined the union at Wal-Mart. Such procedures yielded tangible results. The staff began to know the trade union, which strengthened their consciousness and their will to unite, and also reduced their fear of retaliation.

Ke Yunlong, a 29-year-old employee in the meatpacking department of Wal-Mart's Jinjiang store in Quanzhou City, Fujian Province, together with his colleagues, went to the local trade union to inquire about the organizing process, and applied to form a grassroots union. On July 29, the workers sprang a surprise and declared the founding of a union branch at the Jinjiang store. This was a real historical breakthrough for the trade union movement in China.

The third stage involved an effort at 'cooperation' on the part of Wal-Mart after an initial period of contentious opposition. After Jinjiang, another five union branches were immediately established. Within a week, however, the company offered the union an olive branch, marking a 180-degree turnaround from its initial anti-union stance. Wal-Mart tried to co-opt the ACFTU in order, as it claimed, to 'work together to achieve harmony.' Top Wal-Mart regional executives invited themselves to the local trade union office. Following that, other executives visited the ACFTU to discuss the matter of trade union formation. Wal-Mart proposed setting up the trade unions itself. The ACFTU agreed to negotiate with Wal-Mart, but reiterated its insistence on a trade union with Chinese characteristics, and emphasized that the Wal-Mart trade union needed to be formed by the employees themselves with the support of the federation, instead of under the control of Wal-Mart management. Simultaneously, the ACFTU and its local trade unions stepped up their efforts to establish real trade unions at Wal-Mart stores.

The fourth stage involved achieving mutual recognition and overall advancement. On August 16, ACFTU officials were invited to Shenzhen to negotiate with Wal-Mart's top executives in China. The two sides carried on a constructive discussion. Wal-Mart executives also met with ACFTU officials in Guangzhou and signed a five-point memorandum, according to which preparatory committees would be set up to form new trade union branches at the Superstores. Each preparatory committee was to be composed of management, district union officials, and employees. Representatives from management were to be limited to no more than 20 percent of committee members, and a multi-candidate election for the union committee was to be held. ACFTU organizers were now allowed to conduct training sessions with Wal-Mart employees regarding Chinese labor law and to recruit new members.

Both the trade union negotiators and Wal-Mart workers were greatly inspired. Hereafter, the situation changed rapidly. The moment the memorandum was signed, union branches quickly sprung up at Wal-Mart stores across the country with irresistible force, at the speed of nearly one union branch a day. On September 30, 32-year-old Ling Zilong was elected chairman of the trade union at the Wal-Mart Shantou Nanguo store with a high percentage of the vote. Grassroots unions were now formed legally and voluntarily at all 60 Wal-Mart Superstores in China, in strict accordance with China's trade union laws and the Chinese Trade Union Constitution. All of them held democratic elections.

Thus, within only two months, the ACFTU succeeded in setting up trade unions at every Wal-Mart store in China, a feat which was highly applauded by the Chinese news media. Why were the Chinese trade unions able to achieve this breakthrough at Wal-Mart and what is the significance of the event?

First, it is an important achievement for the ACFTU to have set up trade unions at a foreign-funded enterprise. Over the past two decades, China's policy of reform and opening up to the outside world, to speed up industrialization and urbanization, has fueled a boom in both the private and foreign-funded economy. Meanwhile the ranks of workers, mainly migrant workers and workers in non-public-funded enterprises and unregulated sectors, have kept on growing. Therefore, it has become more and more urgent for the ACFTU to set up grassroots unions and organize these workers. To meet the challenge, the ACFTU has greatly expanded its grassroots organizing efforts, with special emphasis on migrant workers and workers in unregulated sectors, i.e., the private and foreign-funded enterprises.

Given the fact that these workers are always on the move and geographically dispersed, trade unions at all levels have made a series of innovations in their organizing methods, exploring ways to organize workers wherever they might be working, whether in an office, at a construction site, in the community or hiring site, in a bid to recruit the vast majority of them into trade unions on a regional or industrial basis. Meanwhile, the ACFTU has been building a three-tier network consisting of township trade unions at the top, enterprise unions at the base, and unions in the various types of economic development zones in between.

In organizing trade unions at these foreign-funded enterprises, the ACFTU has witnessed strong resistance from some multinational corporations. At present, there are about 150,000 foreign-funded enterprises in China, out of which nearly 40,000 have grassroots unions established, but that only accounts for 25.9 percent of the total. The Wal-Mart breakthrough will certainly further the entire work of union organizing nationwide. The ACFTU sees this as a major turning point. It will carefully review its experiences in this drive and take advantage of the favorable situation to expand its organizing efforts, in order to create a high tide of union organizing.

Secondly, its success in organizing Wal-Mart is a reflection of the new focus of the ACFTU aimed at safeguarding labor rights. Trade unions are the product of social-economic contradictions, chiefly of contradictions in labor relations. In the tide of globalization and market-oriented reform, trade unions in China have seen drastic and profound changes in economic and labor relations, along with a serious encroachment on workers' rights and interests. This has added to pressure on trade unions to provide workers with better protections. In 1994, the ACFTU advanced the idea of giving further prominence to the safeguarding function of trade unions. According to this idea, Chinese trade unions have made it their fundamental duty to safeguard the legitimate rights and interests of Chinese workers. In December 2004, the ACFTU laid down as a basic principle the need to 'organize workers and fight for labor rights.'

In recent years, Chinese trade unions have been exploring ways to build a sound protection mechanism, and are doing their utmost to defend workers' rights. For instance, trade unions take an active part in the formulation of laws and policies regarding the interests of workers. They put forward suggestions and opinions through various channels, represent workers in collective bargaining in order to sign contracts with employers, organize workers to participate in the democratic management of their enterprises through forums such as the Workers Congress, and provide legal aid services for workers, among many other activities.

The campaign to establish trade unions at Wal-Mart is a reflection of the ACFTU’s efforts to bolster its safeguarding function. Once trade union branches are established, they need to carefully listen to the desires and demands of workers, help the staff to sign a labor contract, and negotiate with management over wages, working hours, social security, safety, and occupational health on behalf of union members. They also need to educate workers on their labor protections and build a channel of communication and consultation between the workers and management, so as to better serve the needs of workers.

Third, the achievement at Wal-Mart is also due to the superior position enjoyed by Chinese trade unions. Since conditions for the labor movement vary country by country, trade unions in various parts of the world have developed their own characteristic features. In China, the working class is the leading class of the state. The Communist Party of China (CPC) is the party of the working class; and under the leadership of the CPC, trade unions are the voluntary mass organizations of the working class, serving as the bridge by which the CPC keeps in contact with the masses of workers. Thus, the ACFTU is an important pillar of state power as the representative and defender of workers' interests. The ACFTU is established as a unified national organization (not including Hong Kong, Macao and Taiwan) under the provisions of Chinese law. The CPC and the government have always attached importance to trade union work and given full support to trade unions in carrying out their work independently and creatively in accordance with the Trade Union Law and the Constitution of the Chinese Trade Unions.

The Chinese trade unions unswervingly take the road of development with Chinese characteristics. Such a political system is able to adapt to political and social changes in China's, and has the benefit of encouraging trade unions to defend the rights of workers. In the union drive at Wal-Mart, the ACFTU brought the advantages of its role in Chinese society into full play.

How did the Chinese unions 'crack the world's toughest problem'? The foundation was the initiative taken by the workers themselves to establish a union at Wal-Mart. Added to that, the Communist Party’s strong leadership, and the joint impetus it provided along with the ACFTU to guarantee the enforcement of Chinese law, were important external conditions. At all levels, Party committees and the CPC’s firm leadership and support played a decisive role. The People's Congress implemented an oversight process to assure compliance with the Trade Union Law. The success in setting up trade unions at Wal-Mart indicates that all enterprises operating in China must observe the Trade Union Law, and that no one has the 'privilege' of defying the law. Organizing trade unions is both the political right of workers and also a legal responsibility that the enterprises must fulfill. In a word, the breakthrough at Wal-Mart amply demonstrated the power of the Chinese trade unions, coupled with the political advantages they possess under the leadership of the Communist Party. In addition, at present out of the 60 chairpersons of Wal-Mart branch unions, 15 are Communist Party members. Trade union formation has also promoted the building of the Party and its youth organizations.

Fourth, the establishment of the union at Wal-Mart points to the success in practice of the 'harmonious approach' put forward by the ACFTU. There is a lot of argument about whether the function of trade unions is to be harmonious or one of conflict. Chinese trade unions consistently hold to the harmonious idea of protecting workers rights, while at the same time promoting the development of the enterprises. In this way, they aim to build a new socialist labor-management relationship on the basis of harmony and mutual benefit, where workers and managers make common efforts to achieve a win-win situation, instead of engaging in resistance and confrontation. By means of this approach, the rights and interests of workers be safeguarded in a fundamental way, and unions can win the support they need from society in order to develop smoothly. The success of this idea in practice has proved that trade unions in foreign-funded enterprises have become an important platform for harmonious cooperation, playing a positive role in promoting economic development, while safeguarding workers' basic rights and interests. Wal-Mart stores in China have continued in stable operation since the trade unions were formed. The changed attitude of Wal-Mart to the trade unions is vivid proof of the power of the harmonious approach, while our 'trade union work with Chinese characteristics' in the foreign-owned enterprises has gained widespread public approval.

Finally, the Wal-Mart union drive was a crucial part of an attempt by the Chinese unions to transform their mode of action. The determining factors in the birth of the Wal-Mart union were the employees' aspirations and the necessity for legal compliance on the part of Wal-Mart. The guidance and assistance provided by the ACFTU leadership helped foster a positive outcome. Before the formation of the union, many Wal-Mart employees contacted the ACFTU and local trade unions for instructions and help in setting up grassroots trade unions. When confronted with resistance, the local unions turned to grassroots organizing methods, working from the bottom up. The unionists went among the workers, carefully propagated the Law and the Constitution of Trade Unions, and agitated to form a union. The upper-level trade unions provided prompt assistance in this initiative, along with the necessary instruction about the entire process of unionization. Because of this, the Chinese trade unions could achieve a breakthrough.

The success of the Wal-Mart organizing experience is very important to consider in terms of the fundamental change that has occurred in the approach of the ACFTU. This is quite different from the previous method of asking management for permission. It not only will influence other foreign and private investors to allow unions to be established, but it also gives trade unionists a new way to organize workers in the circumstances of a market economy, i.e., by focusing their efforts on advancing, educating, and reinforcing the aspirations of employees, and actively mobilizing them to join the union.

Following this new logic, adjustments will be needed in union work, from the methods used in organizing to the organizational structure of unions themselves. The success in setting up trade unions at Wal-Mart is a new beginning, the significance of which should be fully appreciated, but one that should neither be exaggerated nor misread. Trade unions in China still have a long way to go along the 'road of development with Chinese characteristics.'



--Yang Wanxiong lives in Beijing, China and is solely responsible for the material in this article. Send your comments to