Twofish's Blog

August 9, 2006

Walmart and trade unions

Filed under: china, finance, Uncategorized — twofish @ 11:02 pm

http://www.bloomberg.com/apps/news?pid=20601080&sid=avP1E9.Hn.2U&refer=asia

I think this is going to be more interesting than one would suppose.  It is true that trade unions in China tend to be toothless, but that is because the trade union ultimately answers to the Communist Party and the management ultimately answers to the Communist Party so there is reason for unions and management to be nice to each other.

However, if it is the case that one of the members of the arrangement doesn’t answer to the Communist Party (like Walmart management), there isn’t any particular reason for the trade union to be nice to management.  This is especially when the trade union can play the nationalism card in any dispute with Walmart.

This could lead to some very interesting coalitions.  Labor unions have traditionally been against China trade because of the loss of jobs, but I can imagine a situation in which US labor unions start working with Chinese labor unions to organize against Western employers.  The Chinese government doesn’t care since the labor unions aren’t organizing against anything that the Party wants to keep control of, and in fact this will increase the cards that the Party can play against Western companies.  Western labor unions like this because then it becomes really hard for a company to argue that it is OK for Chinese to organize labor unions but not for people in the West to do so.

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