Trade Unions and Multinational Companies in China

By Chris Xiaoyun Lin of Akin Gump Strauss Hauer & Feld

In early July, the All China Federation of Trade Unions (ACFTU) announced a 90-day campaign to introduce unions into Fortune 500 companies operating in China. The objective of the campaign was to raise the rate of unionisation among those companies from 60% to 80%. The initial targets of this campaign were 2,460 multinationals, including 10,000 of their subsidiaries and branches. By late July, the ACFTU announced that some of their targets had already formed trade unions while others were about to do so. Suddenly, the prospect of unionising most, if not all, multinational companies in China has become very real.

    But seen from a broader perspective, there is nothing sudden about this development. The rapid economic growth of the past 30 years has brought much prosperity to China, but has come at the price of a widening gap between the rich and the poor and the social tensions accompanying this gap. The current Chinese leadership seeks to reduce such social conflicts through the building of what President Hu Jintao calls a “Harmonious Society.” It views trade unions as a key link in its drive to achieve this objective, as labor conflicts often lay at the heart of social tensions today.¹