Multinationals support Chinese unions

IBM and Volvo have become the latest Fortune 500 companies to set up trade unions in their Chinese operations.

Fewer than half of Fortune 500 Chinese subsidiaries have permitted the presence of trade unions, compared with more than 73 per cent of all foreign-funded companies in China, said Yang Honglin, head of the grassroots organizations and capacity building department of the All-China Federation of Trade Unions.

At present 483 of the Fortune 500 companies run businesses in China. Altogether 336 have set up headquarters in the country, and about 10,000 foreign businesses have subsidiary Chinese operations.

In June the federation started a three-month national campaign to increase worker representation. Since then Canon, FedEx, Intel, Sony and Toyota have set up unions in their factories.

The federation claimed a breakthrough two years ago when Wal-Mart, the world’s biggest retailer, agreed to admit unions. Now more than 50,000 workers at the company’s 108 chains in China have signed collective contracts through their unions. The contracts introduce annual wage negotiations and state that the minimum wage offered should be higher than the local minimum rate. They also include agreements on working hours, paid holidays, social security and training.

Independent trade unions are currently illegal in China. All existing trade unions are under the umbrella body the All-China Federation of Trade Unions, a government bureaucracy.