V-12 Question: According to foreign press, Wal-Mart, the largest retailer in the world, recently changed its previous position against setting up labor unions in its outlets in China. Does Wal-Mart do this because of pressure from labor unions and the media in China? What is the legal base for setting up labor unions in Wal-Mart?

A: The first labor union in Wal-Mart outlets in China was set up in August 2006 in Jinjiang, Fujian Province. Three months later, the headquarters of Wal-Mart labor unions in China was set up. By then, grass root labor unions have been established in all Wal-Mart outlets in China. This is the desire of employees in Wal-Mart stores in China, as well as the wish of various social communities.

The unique characteristics of labor unions in China are the key reason that Wal-Mart gave up its resistance to labor unions. The difference between labor unions in China and in other countries is that, Chinese labor unions seek to promote the healthy growth of the enterprises as well as social harmony while protecting the interests of employees, whereas in the United States, labor unions and the firms tend to be confrontational. As the goals of labor unions in China are in line with the principles of Wal-Mart, Wal-Mart is not "hostile" to labor unions in China, a departure from Wal-Mart's stance in the United States.

Why China wants to set up labor unions in foreign ventured companies? About half a million foreign-invested enterprises have moved into China since 1978. As the number of foreign-invested companies grows, there are more and more disputes about wages, over-time pay, work safety and labor contracts. Without the protection of the labor union, the legal interests of workers cannot be guaranteed, and conflicts between employers and employees are more likely to break out.

The mission of labor unions in foreign firms in China is to "protect legitimate interests of the employees, and promote healthy growth of the enterprises." This is a unique feature of labor unions in China. Protecting the rights of employees is the universal responsibility of all labor unions in the world, and that is what makes a labor union a union. The other mission of Chinese labor unions is to unite workers to promote healthy development of enterprises as well as social stability.

After labor unions were set up in all Wal-Mart stores in China, Wal-Mart outlets are on normal track. Consumers prefer to shop in stores that protect the interests of their employees, because stores protecting the rights of their employees will almost certainly protect the interests of their consumers as well.

There is legal basis for setting up labor unions in foreign firms. China has the Trade Union Law and the Law on Foreign-Funded Enterprises. These laws stipulate that employers of foreign firms in China must set up labor unions to coordinate labor union events and to protect the legal interests of employees. Foreign firms should provide necessary support to the activities of labor unions.

Labor unions in Wal-Mart's China stores will serve as an example for organizing unions in other foreign firms in China. All China Federation of Trade Union will take this chance to encourage foreign firms in China, especially the world's top 500 firms to set up labor unions. It is estimated that by the end of 2007, 80 percent of foreign firms in China will have labor unions. Labor unions will play a bigger role in the growth of foreign firms in China.

(China.org.cn)