Washington International Law Journal


Cheap labor. Minimal regulations. Bribable officials. Foreign corporations attracted to China because of its low cost of business have avoided the unionization desired by the Chinese Communist Party (“CCP”) despite China’s history of weak trade union laws and inconsistent enforcement of union mandates. However, recent concerns of social unrest have forced the CCP to consider reforming the political tools used to control Chinese society. The CCP wants to create social stability, avoid independent unionization, and prevent the westernization of China. Foreign Investment Enterprises (“FIEs”) present new challenges for labor market regulation in China with their large number of non-unionized workers revolting at poor working conditions, as well as FIEs’ importation of western values. The Trade Union Law amendment of 2001 affords the All-China Federation of Trade Unions (“ACFTU”) more avenues of enforcement through which to force FIEs to unionize and obliges the ACFTU to become a greater presence in private enterprises—especially FIEs. Moreover, the proposed (draft) Labor Contract Law provides the ACFTU with greater oversight power through which to monitor the actions of FIEs and Chinese workers. The new regulatory environment providing greater legal authority to the ACFTU does not need to cause foreign enterprises to withdraw from China out of fear of increased unionization or further legislation. The ACFTU and CCP value harmonious relationships over striking workers and value foreign business. Moreover, unionization will help consolidate workers under the socialist regime of the CCP, creating a more stable society and working environment in China, which ultimately will benefit FIEs. China’s battle with FIEs to increase unionization is being waged by the CCP in order to enable the CCP to control the Chinese workforce and minimize outside influence, not in order to impose stricter conditions on foreign investment and take control over foreign business from enterprise management.

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