Union federation starts organizing foreign-owned sweatshops

By Milt Neidenberg

A movement of the laboring masses is on the march in a strategic center of the world. This development is taking place in China, 10,000 miles away from Wall Street. But the Fortune 500 players nestled in their comfort zone are worried. And rightly so. Chinese workers and peasants are pouring into the urban centers seeking economic justice. Their demands have reached the highest levels of the ruling Communist Party.

Last year, columnist Howard French wrote that “Zhou Yongkang, the public security minister, told Reuters last month there were 74,000 mass incidents, or demonstrations and riots, that occurred in 2004, an increase from 58,000 the year before, and only 10,000 a decade ago.” (New York Times, Aug. 24, 2005) It is not clear how many of the 160 million workers organized in the All-China Federation of Trade Unions (ACFTU) participated.

Capitalist enterprise zones have superseded township and village enterprises in China and gained enormous leverage, becoming wide open to foreign investment, primarily from U.S. transnational corporations. Since the late 1970s, this development to encourage an open-door policy was labeled “market socialism” by the Communist Party, under the leadership of Deng Xiaoping.

Low-wage workers have clashed violently with Chinese bureaucrats who support capitalist restorationists. The newly rich have fattened at the expense of the people’s welfare and are nourished by 152,000 foreign-funded enterprises.

Social unrest, social change

Now, according to the Oct. 13 New York Times, “China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers’ rights by giving labor unions real power for the first time since it introduced market forces in the 1980s.

“The move, which underscores the government’s growing concern about the widening income gap and threats of social unrest, is setting off a battle with American and foreign corporations that have lobbied against it by hinting that they may build fewer factories here. ...

“The skirmish has pitted the American Chamber of Commerce—which represents corporations including Dell, Ford, General Electric, Microsoft and Nike—against labor activists and the All-China Federation of Trade Unions.”

The ACFTU, the official state union, would be empowered to negotiate workers’ contracts covering wages, working hours, safety and health on the job, and other benefits. The new law would make it more difficult to fire workers. Most important, the laws would be strictly enforced.

The ACFTU was founded in 1927 on May Day. The organization is divided into 31 federations, including provinces, autonomous regions and municipalities, and encompasses 10 national industrial unions. The entire structure is directly under the central government and the Chinese Communist Party (CCP).

ACFTU Chairperson Wang Zhaoguo is a member of the highest bodies of the Communist Party—the Central Committee Politburo and the Standing Committee—and is vice chairperson of the latter.

The ACFTU constitution describes the duties of the Chinese trade union as “to protect the legitimate rights and interests of the workers and staff members. In the course of developing the socialist market economy, the trade unions, in accordance with the regulations of the State’s Labor law and other relevant laws, actively safeguard workers’ political rights, their right to work and their material and cultural interests, participate in coordinating labor relations and regulating social contradictions and make efforts to promote the economic development and a long-term social stability of the country.” (ACFTU Bulletin, Aug. 10, 2005)

It is the implementation of a “socialist market economy” that has allowed the rise of capitalist restorationists and has led to class strife.

At the ACFTU’s 14th and most recent congress, in September 2003, the union targeted Wal-Mart, the biggest retailer in the world. Wal-Mart entered China’s domestic market in 1996 and currently has 62 super-sized retail enterprises there, employing some 32,000 workers. Their suppliers employ many more.

Wal-Mart’s headquarters in China responded just as they do to unions around the globe. They went on the offensive.

At that time, the People’s Daily described the encounter: “Wal-Mart said that according to Chinese law, a trade union could only be installed at the free request of employees, and since there have been no requests yet, there is no necessity to establish a union.”

The ACFTU responded as any union would. “They [the workers] cannot afford to raise the issue with their employer for fear of losing their jobs or other benefits.” Since the 2003 Congress, Wal-Mart’s defiance has collapsed.

With the support of CCP General Secretary Hu Jintao, the Communist Party leader who called for “union building in foreign-invested enterprises,” the ACFTU drive to set up union branches has snowballed. At least 17 branches have been formed. (China Labor Bulletin, Aug. 15)

The party leadership is now taking credit for these long overdue measures, which should have been done the day the first imperialist corporation entered China. These companies had operated with a virtual free rein until working-class resistance forced the authorities to make these concessions.

The struggle comes home

This significant victory against Wal-Mart has resonated back here in the imperial fortress of monopoly capitalism. It is making finance capital think twice about their dream that exporting jobs and services to China assures them cheap labor and huge profits forever after.

An article in the Oct. 13 Wall Street Journal headlined “China to Press More Firms to Unionize” confirms the fears of the Fortune 500. It reports that Guo Wencai, director general at the ACFTU, “said the union’s success with Wal-Mart has boosted morale and increased demands to establish unions in all foreign-funded enterprises in China. ‘These include Fortune 500, Hong Kong and Taiwan companies,’ he said, adding that the ACFTU has begun ‘an irreversible trend.’”

The article continues: “The ACFTU is on track to meet its target of getting 60 percent of foreign companies in China to unionize by the end of this year, officials say. The union has seen an unprecedented 6 percent rise in membership in the first six months of the year to 160.32 million members, with 2.58 million new members working with foreign companies.”

Wall Street is fighting back against the proposed new laws and the growth of the ACFTU. Among other tactics, U.S. capitalism is trying to empower the transnational companies to set up rival company-type “independent” unions. They will try to reach migrant workers, most of them emigres from the poorest provinces, who complain about abuses such as having their pay withheld or being forced to work without a contract.

Will labor leaders here join the China-bashing chorus or will they champion and support the ACFTU successes? Andy Stern, president of the Service Employees International Union (SEIU) and architect of the Change to Win Federation that split from the AFL-CIO, supports the ACFTU. He has met with them four times since 2002.

Stern is quoted in the Oct. 13 Wall Street Journal: “I think what happens to Chinese unions will have a huge impact on what kind of global wages and benefits workers everywhere make. You’re seeing growing unrest among workers, a more aggressive ACFTU and I think a lot of that will be focused on foreign-owned enterprises.”

SEIU and the ACFTU shared strategies and talked about developing national agreements with companies rather than local contracts. “We’d rather have their wages come up, rather than American wages go down,” said Stern.

In contrast, AFL-CIO President John Sweeney has never met with the ACFTU and to date has not welcomed its significant achievements, particularly the impact on U.S. transnational corporations. In a July 21 statement, ignoring the ACFTU Wal-Mart victory, AFL-CIO Secretary-Treasurer Richard Trumka said he had “called on the Bush administration in June to take action under the Trade Act of 1974 to end the brutal suppression of workers’ rights in China and stop the flow of good U.S. jobs overseas.” (www.afl-cio.org) This is a dead end policy.

The growth of the U.S. labor movement lies in building international solidarity. The Chinese experience is one of many. The class struggle here will develop from below, from the exploited, the oppressed nationalities and the immigrants. Ultimately, these forces, organized in unions and the unorganized, will regroup, unite and build an independent classwide movement.

And challenge the Wal-Marts of the world.

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