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14/10/2006 | CHINA - Using Unions To Access Company Records

Stratfor Staff

The All-China Federation of Trade Unions on Oct. 12 once again said it is aggressively targeting foreign companies for unionization. Although unionization in China is generally nonthreatening to businesses, the government plans to use unions not only to improve workers' conditions, but also to gain information on foreign companies' operations.

 

The All-China Federation of Trade Unions on Oct. 12 once again said it is aggressively targeting foreign companies for unionization.

As Stratfor has noted before, China's recent drive to unionize 60 percent of foreign firms is a means to better control the masses and to promote Chinese President Hu Jintao's "Harmonious Society" and "New Socialist Countryside" initiatives -- but it is also a way to re-centralize the economy and better control foreign investment. Thus, the government plans to use unions to improve worker's conditions while also gaining information on foreign companies' operations.

The government does not want to push foreign companies too hard, jeopardizing the foreign investment Beijing relies on to help drive the economy, since a slowing economy would result in an employment crisis. At the same time, Hu is intent on addressing China's wealth gap. Not addressing this gap could spark a crisis of another sort as Chinese grow increasingly dissatisfied with the growing disparities between booming coast and stagnating inland provinces.

In a typical Chinese fashion, though, the government is moving slowly to avoid upsetting the fragile balance between economic growth and dispersing wealth inland that keeps the Chinese Communist Party (CCP) running. This pace follows Deng Xiaoping's classic "crossing the river while groping for stones" policy, which advises taking small steps and assessing one's balance before moving forward.

At present, Beijing is experimenting with appointing union leaders in some domestic companies. These leaders are on the government payroll, and cannot be fired by their respective companies. Such an experiment probably will not be carried out on foreign companies for a few years yet.

The implications are stark, however. A union allowed to dictate labor policies to an extent is one thing. Union representatives appointed by the government not only with the power to direct labor policies, but also with complete access to company records, is quite another. Guo Wencai, who directs the grassroots organizing department of ACFTU, said Oct. 12 that ACFTU plans to target Fortune 500 companies, specifically naming Dell Inc. and Eastman Kodak Co. Sources with one foreign company said they are almost certain their financials already have been turned over to a domestic competitor by officials. Under the new system, they might also have to share their business strategies with official union representatives.

The CCP will continue the precarious growth/wealth-dispersal balancing act for a few years, likely until after the 2008 Olympics. If by then it still faces growing internal discord, the Party will take the next step and subject foreign companies to these more draconian policies.

In the meantime, Beijing will continue to push to move foreign and domestic investment inland. It will also seek to spur domestic competition and the growth of domestic industries that can compete with foreigners in order to lessen the damage from any retreat of foreign companies from China. Predictably, those companies complying with the new policies and developing good relations with the new government will be least likely to feel Beijing's heat.

Stratfor (Estados Unidos)

 


Otras Notas Relacionadas... ( Records 11 to 20 of 1633 )
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