Wal-Mart's Union Part II

The third in a series of dispatches from China

So let me finish my story on Wal-Mart.

The issue in China is not whether there are going to be unions in state or foreign owned companies; Wal-Mart's unionization is a signal to all multinationals that the government is no longer going to tolerate any Foreign Owned Enterprise (FOE) to ignore the law allowing workers' union recognition.

Instead, the question is this: Does the one official Chinese union work in the employers' interest, or their own? Can the All-China Federation of Trade Unions (ACFTU) -- formerly a "transmission belt" between the workers and the government when everything was State-owned -- really change their lives?

Interestingly, the concern is not only raised by many in the ACFTU and other global unionists. Listen to what the Chinese Government had to say in an editorial on Wal-Mart in its official English language paper, China Daily:

"While continuing to tap foreign investment, it is necessary to ensure that workers in these companies enjoy equal protection as those in domestic enterprises."

The formation of trade unions is only the first step to bring into place a needed mechanism. To make it work and substantially raise labour standards will require more efforts from all sides.

It is a matter of fact that a number of enterprises, with or without trade unions, in this country used to make profits at the expense of fair wages and working conditions. Such infringement on workers' legitimate rights and interests should not be tolerated.

Though China has an abundant labour force, companies in the country should not always base their competitiveness on low salaries for workers. Be they domestic or foreign firms, they are all encouraged to raise their profitability through innovation. Meanwhile, trade unions should play a more active role in workers' interests.

For China's union leaders, it is no time to celebrate. To build the country's trade unions into an effective pro-worker force as powerful as their numbers suggest is a task more demanding than setting up more of them."

When I met with a major American business consultant yesterday, he highlighted China's growing indifference to the investment desires of multinational executives who think China should be fawning over them. He described how major CEOs fly there and expect to be treated like royalty as they are in other developing nations, only to learn they are just another player in the boom-boom Chinese economy.

China's Central Communist Party is instead focused on political stability and development having a more broad-based effect; reaching into rural and Western areas to gradually raise wages. By 2040, this consultant predicted, China's economy will be the largest in the world.

I am not sure it will take that long.

For me, the Russia-U.S. relationship was the key superpower competition. For my son, it will be China-U.S.

The pressures being placed on him by China are only beginning to be understood.