When South Korean manager Cho Jai-il first learned China's trade union was something equivalent to the workers' organization in his country, he had thoughts of strikes, conflict and irrationality.

Three years later, however, the department official at Beijing Hyundai Motor Company has completely changed his mind.

Trade unions in China are not as radical as those in South Korea, he maintains, and yet they represent workers' rights forcefully enough that the workers don't need to worry.

The company's general manager, Noh Jae-man, goes even further. He described his factory as a pair of wheels: One is the management committee, consisting of several South Korean and Chinese managers, and the other is the Hyundai trade union committee.

He said his business runs normally only when the two sets of wheels roll ahead at the same speed.

But not all pictures of labour-management relations in China are so rosy.

The country's Trade Union Law stipulates that unions are allowed to send officials to enterprises to establish trade union branches. Enterprises have no right to interfere in this process, but many companies  particularly foreign-funded ones  have refused to set up trade unions.

According to the first nationwide survey on the economy, 18,000 of the 78,000 foreign companies in China  or 23 per cent  were unionized at the end of 2004.

And among a separate group (companies funded by Hong Kong, Macao and Taiwan) the percentage is even lower, roughly 20 per cent.

Labour observers say some companies are worried that setting up trade unions might increase costs and get the company involved in politics that it would prefer to avoid.

And some local governments are also reluctant to support trade unions for fear that organizing the workers will scare away foreign investors.

Against that background, a tough battle between enterprises and trade unions is on the horizon. The All-China Federation of Trade Unions (ACFTU), China's top trade union organization, has proposed that at least 60 per cent of foreign-financed companies in the country be unionized by the end of this year and 80 per cent by the end of 2007.

Sun Chunlan, a vice-chairwoman of the ACFTU, said setting up unions in foreign-invested firms is necessary because private economy had expanded in China and the number of employees working for foreign-funded companies had soared.

She said most employees at these companies were either white-collar or migrant workers. Some of them were exposed to prolonged working hours, tough work conditions and meagre pay as well as incomplete social security.

"We should be fully aware that many foreign-funded companies in the country don't have trade unions," she said at a recent meeting with provincial-level union leaders in Beijing.

She underscored the trade unions' role in stabilizing and adjusting the imbalanced industrial relations between management and employees meanwhile urging local union branches to enhance their efficiency and put up efforts to safeguard workers' rights.

Good example

At Beijing Hyundai, the relationship between the management and unions appears to be compatible even though labour-management relations in South Korea are among the most contentious in the world. According to Cho, the Hyundai union served as an intermediary body that helped foreign investors become familiar with the local union environment and Chinese workers.

"The union at Beijing Hyundai helped remove the barrier between employers and employees since the company was launched in 2002 and improved morale during difficult periods such as the SARS outbreak in 2003," Cho said through an interpreter.

He also said that Wal-Mart, a US retailing giant that has been opposing unions in the United States and around the world, would have problems surviving in China if it does not handle relations with unions properly  just as it has fared badly in South Korea.

Li Zhili, chairman of Beijing Hyundai's trade union, said that while unions in China and abroad have the same goals in protecting the rights and interest of employees, Chinese unions advocate common development for both workers and companies.

"With the economic development, Chinese trade unions' role has changed, and they must do more to protect workers' interests and rights," he said.

But he was quick to point out that another job of the union is to promote the company's development in a healthy manner as well as educating, organizing workers and improving their labour skills.

Li noted that a too-powerful union in South Korea had prompted the automaker to move part of its business to China.

By contrast, the Beijing union at Hyundai is more co-operative, but it does not sacrifice workers' rights, he said, answering allegations that unions in China are sometimes like a charade, a feckless bureaucracy that has only the pretence of representing the proletariat.

"We co-operate with the company, yes, but the essence is still conflict," Zhang Zhixiong, vice-chairman of Beijing Hyundai's union, said of the delicate relations with management.

He said that throughout the world, extreme measures taken by unions such as strikes are phasing out, giving way to more peaceful, civilized measures.

"It's as if the management and unions are playing chess, and the more skilled party will win," said Zhang, who cited an example regarding a possible rise in salaries when word of the management board's discussions had leaked out.

"We acquired the bill for a salary rise and made the union's opinions heard even while the management board was still discussing it," Zhang said. "Later when the union was consulted in line with the procedure, we gave it a green light. As a result, the pay rose to our satisfaction, and we avoided a disagreement with company management."

In the past three years, the union at Hyundai helped workers gain a number of benefits initially refused by the company, including allowances for heating and for parents who responded to a national family planning policy.

Currently, the union is planning to sign a collective agreement on behalf of its 4,000 members with the company and then sort out complaints filed by some about their salaries.

Chinese unions

In China, trade unions have been an integral part of the socialist system in an economy based on State ownership of the means of production and centralized control of wages, prices, employment and production.

They served as a means of integrating workers into the socialist system by performing State functions inside and outside the workplace, and played virtually no part in the regulation of the employment relationship.

But as the country is in transition to a socialist market economy in which private businesses are embraced, trade unions have had to adapt to new conditions, in which company owners have the upper hand on a surplus of workforce.

Feng Tongqing, vice-president of the Beijing-based Chinese Institute of Industrial Relations, said the ACFTU "has made efforts over the years to adjust its structure to highlight its role of protecting the workers." For instance, the federation has proposed to take migrant workers under its protection and set up a department to study collective bargaining.

Also, the traditional role inherited from the planned economy period led trade unions to become involved in politics and made the workers' voice heard in political conferences, Feng said.

He also said that even though Chinese trade unions still have to improve given the increasing number of workers in a private economy, it is inappropriate to analyse trade unions' development toward one or another existing model of trade unionism.

This is because they have to construct their own trade union practices based on inherited structures and within a framework, he said.

The purpose of a trade union is not to intensify labour disputes, but to stabilize and smooth the relationship.

In China, labourers and business owners are considered equally important, Zhang said.
"So, unions are not allowed to take extreme steps against management or ignore workers' rights protected by law."

He described Chinese unions as in a "half-squatting position" that could not totally stand up to represent workers or sit down to ignore them. "The bottom line is," he said, "they have to fulfil workers' rights and interests regulated by law."

But most foreign investors have scant knowledge of Chinese trade unions, so local union leaders have met enormous resistance from executives during their penetration into ventures.

William Valentino, general manager of Corporate Communications with pharmaceutical company Bayer, told China Daily: "It's pretty common that foreign companies have little knowledge about Chinese trade unions."

He said most of his own impressions of Chinese unions came from US newspapers and reports from some international labour organizations.

But during his limited contacts with Chinese unions - in a programme that involved the company and several State-level departments fighting against HIV/AIDS and spreading relevant knowledge among workers - the union has played a very positive role, Valentino said.

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