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Unions in China still feeble, but gaining foothold

Most Fortune 500 companies operating there have agreed to let workers organize, but can expect little pushback from the state-controlled groups.

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The way in which the ACFTU normally sets up unions in enterprises, from the top down, gives management an influential say in who should sit on the union committee. Only the manager and his deputy are banned by law from committee membership, but union chairmen are very often middle managers beholden to their bosses.

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Such unions "are no threat to any company," says Jonathan Unger, head of the Contemporary China Centre at the Australian National University in Canberra.

Traditionally, the role of unions in all companies, locally or foreign owned, has been limited to welfare, organizing employee outings, and explaining government policies to members.

There are signs, though, that this might be changing. In the southern province of Guangdong, often in the vanguard of economic and social change, "more progressive unions are now saying that a key role of trade unions is to represent workers and not necessarily to be nice to management," says Geoff Crothall, a researcher with the Hong Kong-based China Labour Bulletin.

"The potential is there" for more representative and more demanding unions, he believes.

"It is great that the union has got in the door of some foreign companies," agrees Ms. Thomas. "But the next step has to be to conclude collective agreements and to defend members' interests. We are starting to see some of that."

It is not an easy transition for Chinese unions to make. Three weeks ago the most combative and best known Wal-Mart union leader, Gao Haitao, resigned his post in frustration at the way the famously antiunion company was refusing to engage in collective bargaining at the store where he worked.

Though the ACFTU supported his stance, the leadership has not so far offered him much backing, says Mr. Crothall. "They have to be much tougher ... get off the fence and say they represent workers' interests," he argues.

That prospect worries some foreign firms, not least because although much of China's labor legislation is often ignored, it is nonetheless on the books and it is increasingly supportive of workers' rights.

"Even window dressing can take on real meaning sometimes," says Prof. Unger. "Who knows what China will be like in a decade? Things could change."

"Nobody knows for sure where this is going to go," says Mr. Leininger. "How much more collective bargaining will there be? How much more independence from the government? The fear is that once you let a mild and harmless union in, what is going to happen next year or the year after?"

Most likely, believes Mr. Liu, Akin Gump's labor law expert, the unions "will act as a social force, pushing society towards more employee rights. It will be entirely different from a few years ago."

But that will happen, he predicts, "always within the constraints of the political system, and the government's priorities have always been stability, stability, and stability."