The Guardian February 21, 2001

New focus on Trade Unions in China

by Erwin Marquit

The All-China Federation of Trade Unions (ACFTU) has relations with trade 
unions of 134 countries. Labour federations in industrial countries 
(especially European ones) are developing working relations with the 
Chinese unions and are helping Chinese unionists develop more class-
struggle trade-unionism ideas in dealing with foreign-owned capitalist 

Under China's previous system of a fully planned economy, the enterprises 
were responsible for providing most social services such as health care, 
childcare, housing, pensions, and vocational training. The principal 
function of the trade unions was to administer these social services.

Wages and working conditions were established by the national planning 
bodies with or without some consultation with the union leadership on the 
national level. Ratification on the enterprise level was not usually 
considered necessary.

With the economic changes to a socialist market economy, it is seen as 
necessary to establish wages and working conditions at the enterprise 

Provisions for social welfare remain with the enterprise but now have taken 
on the character of what we would consider extended fringe benefits, 
regulated in many areas by national or regional labour laws (e.g. 90-day 
paid maternity leave, childcare, pensions, payments to laid-off workers, 
housing, job training or retraining, health care, counselling on personal 
and family problems, etc.)

A rough estimate for industrial production is that the state-owned 
enterprises account for one third of the output, the collective sector 
(including co-operatives, city, town, village, and county-owned 
enterprises) account for another third, joint-venture and foreign-owned 
enterprises account for about one-sixth and the private domestic sector, 
another sixth.

Profits and taxes from the state sector in 1999 accounted for 55 percent of 
the country's total revenue. Although the state-owned enterprises account 
for a third of the output, they still employ about two-thirds of the urban 

The labour laws give workers the right to bargain collectively. They also 
give the workers the right to participate in the management of state-owned, 
co-operative, and town-and village-owned enterprises through enterprise 
workers' congresses.

Almost all of the workers in the state and other public sectors are 
unionised, but only half of the workers in the domestically owned private 
sector belong to unions, while 30 percent of the 10 million workers in 
foreign-owned enterprises belong to unions. Moreover, not all the 
enterprises that are supposed to have workers' congresses actually have 

The wages and working conditions of workers in US-owned enterprises are 
generally better than in the state-owned enterprises.

It is generally recognised, however, that the labour laws are often 
violated in enterprises in China that are owned by individuals or 
corporations from South Korea, Taiwan, Thailand, and other countries with 
weak-trade union traditions. These also include enterprises to which US 
corporations outsource production, legally or illegally.

A major effort of the national government of China is now being directed 
against the widespread corruption that undermines enforcement of China's 
labour laws that are supposed to guarantee payment of wages at or above the 
minimum wage, occupational health and safety, limitations on overtime, etc.

Another factor undermining enforcement of the labour laws and even 
implementation of the collective-bargaining agreements is collusion of 
owners or management with local officials seeking to create favourable 
conditions to attract investment in their region.

In the past year, Chinese political leaders have begun to speak out with 
unusual force on the need to strengthen the role of the unions in 
protecting workers' rights and the functioning of the workers' congresses.

For example, on December 13, Chinese Vice President and Politburo member Hu 
Jintao stated that the trade-union work to safeguard legitimate employee 
rights and interests should be intensified.

"It is necessary to start by solving outstanding problems and to wage a 
justified war on some enterprises that ignore national laws, underpay 
employees without cause, extend working hours at will, or fail to adopt 
measures for safety in production and labour protection, especially those 
abominable practices that put profitability before the safety of workers' 
lives", he said.

According to Li Yonghai, director of the ACFTU Policy Research Office, the 
Federation is waging a campaign to extend unionisation to all enterprises, 
but that particular attention is now being given to the conditions at 
foreign-owned enterprises.

The ACFTU plans to complete by the end of 2002 the unionisation of the 13 
million workers who will then be employed in foreign owned enterprises.

In a discussion I had with him in Beijing last November, he outlined the 
following six priorities: guaranteeing labour rights, proper payment of 
wages, provisions for Social Security (i.e., heath care, housing, pension 
rights, etc), education, access to scientific and technological skills, 
occupational health and safety.

When leading Chinese political and academic figures speak about the causes 
of the collapse of socialism in the USSR and Eastern Europe, they 
invariably mention the alienation of the working classes due to the 
bureaucratisation of government and Communist Party bodies.

The increased attention to the functioning of trade unions, including a 
recent decision to form Communist Party units at foreign-owned enterprises 
is a sign of recognition that steps must be taken to deal with the problem 
of worker alienation in China.

Coupled with this stress is a repeated emphasis that a condition for 
China's mixed market economy to retain its socialist character is that the 
state sector must remain the dominant sector of the Chinese economy. This 
relatively recent renewal of emphasis on class relations in China, if 
implemented in practice, bodes well for China's socialist future.

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