August 25, 2006 in Business

Wal-Mart opens Communist branch

Elaine Kurtenbach Associated Press
 

SHANGHAI, China – Wal-Mart, capitalist retailer for the masses, now has its own Communist Party branch.

Communist Party and Communist Youth League branches and a trade union were set up this month at a Wal-Mart outlet in the northeastern industrial city of Shenyang, a staffer in the store’s communications department said Thursday, confirming Chinese media reports. She gave only her surname, Liu. She would not discuss details.

A bastion of private business, Wal-Mart Stores Inc. has fought efforts to form unions elsewhere in its worldwide operations. But in recent weeks it said it agreed to work with the state-sanctioned labor federation to allow unions in its outlets in China, where it has 30,000 employees.

It is not clear exactly how the party branch would operate or whether it had an office in the Shenyang store.

At Wal-Mart headquarters in Bentonville, Ark., international division spokeswoman Beth Keck said the party branch opening was a routine matter.

“It our understanding that party members and the party have routinely organized branches in enterprises in China and we respect their right to do so,” Keck said.

Keck declined to comment when asked if the party branch opening was related to the recent spread of official Chinese trade unions at Wal-Mart stores there or what the branch in Shenyang would actually be doing.

Repeated phone calls to the public relations department of Wal-Mart’s China headquarters in the southern city of Shenzhen went unanswered Thursday afternoon.

The All-China Federation of Trade Unions, reportedly at the behest of President Hu Jintao, has been campaigning for several years to set up party-controlled unions in Wal-Mart branches as well as other foreign-invested companies.

Wal-Mart Stores Inc., which has 60 stores in 30 Chinese cities, resisted for two years before employees in the southeastern city of Quanzhou successfully voted to set up a union in late July.

Shenyang Wal-Mart has only two party members and 16 Communist Youth League members out of its 389 employees, according to the official Xinhua News Agency.

But the Xinhua report stressed that the branch’s function would be to promote better business.

The party and youth league branches “will encourage members to play an exemplary role in doing a good job and that will be helpful to business development,” it quoted Chen Lie, a Communist Party district leader in Shenyang, as saying.

Chen said the groups would not interfere with management or operations of the retailer.

Since July, employees of at least 16 other Wal-Marts in China also have formed unions, according to the ACFTU, the umbrella group for unions permitted by the communist government. Overall, China aims to unionize employees at 60 percent of its foreign companies by the end of this year.

China does not allow independent labor organizations. Unions usually represent the work force of a single company or outlet, rather than an industry, and they traditionally have been allied with management.

The communist leadership has sought to preserve the party’s influence in the business sector amid sweeping capitalist reforms and a huge influx of foreign capital and management.

Once a thriving industrial hub of China’s planned economy, where factory workers enjoyed elite status and cradle-to-grave benefits, Shenyang has seen massive layoffs in recent years.

© Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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