CHINA / Foreign Media on China
China drafts law to boost unions and end abuse
(The New York Times)
Updated: 2006-10-16 14:02
http://www.nytimes.com/2006/10/13/business/worldbusiness/13sweat.html?_r=1&
amp;bl&ex=1161144000&en=77e64baf1961a2a3&ei=5087%0A&oref=sl
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SHANGHAI - 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 1980's.
Liu Cheng, a professor who is advising the government, says the new law
will hold companies accountable.
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 other foreign corporations that have lobbied against it
by hinting that they may build fewer factories here.
The proposed rules are being considered after the Chinese Communist Party
endorsed a new doctrine that will put greater emphasis on tackling the
severe side effects of the country��s remarkable growth.
Whether the foreign corporations will follow through on their warnings is
unclear because of the many advantages of being in China - even with
restrictions and higher costs that may stem from the new law. It could go
into effect as early as next May.
It would apply to all companies in China, but its emphasis is on
foreign-owned companies and the suppliers to those companies.
The conflict with the foreign corporations is significant partly because
it comes at a time when labor, energy and land costs are rising in this
country, all indications that doing business in China is likely to get
much more expensive in the coming years.
But it is not clear how effectively such a new labor law would be carried
out through this vast land because local officials have tended to ignore
directives from the central government or seek ways around them.
China's economy has become one of the most robust in the world since the
emphasis on free markets in the 80's encouraged millions of young workers
to labor for low wages at companies that made cheap exports. As a result,
foreign investment has poured into China.
Some of the world's big companies have expressed concern that the new
rules would revive some aspects of socialism and borrow too heavily from
labor laws in union-friendly countries like France and Germany.
The Chinese government proposal, for example, would make it more
difficult to lay off workers, a condition that some companies contend
would be so onerous that they might slow their investments in China.
"This is really two steps backward after three steps forward," said
Kenneth Tung, Asia-Pacific director of legal affairs at the Goodyear Tire
and Rubber Company in Hong Kong and a legal adviser to the American
Chamber of Commerce here.
The proposed law is being debated after Wal-Mart Stores, the world��s
biggest retailer, was forced to accept unions in its Chinese outlets.
State-controlled unions here have not wielded much power in the past, but
after years of reports of worker abuse, the government seems determined
to give its union new powers to negotiate worker contracts, safety
protection and workplace ground rules.
Hoping to head off some of the rules, representatives of some American
companies are waging an intense lobbying campaign to persuade the Chinese
government to revise or abandon the proposed law.
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 Communist Party��s official union organization.
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