The Communist Party of China has just ended its annual central committee meeting, vowing to rebuild and renew its public health system and other social safety nets. It also emphasized efforts to improve education and raise the living standards for workers while narrowing the income gap between city and countryside.

This is valuable context for considering the far-reaching new labor legislation now being debated in China. New labor laws will greatly enhance the power of unions to negotiate and enforce labor contracts, and significantly increase penalties and fines for companies not complying with Chinese labor law on wages, hours and working conditions.

New laws would also give workers added protections and rights in forming a union and make it harder for workers to be laid off or fired. (Current Chinese labor law says that if even one worker in a workplace asks for a union then it must be recognized by the employer — somewhat stronger than the card check neutrality now being fought for by U.S. labor.)

The transnational corporations in China are howling. The New York Times reports, “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 law in union-friendly countries like France and Germany.” The Times goes on to describe how the U.S. Chamber of Commerce and big companies are “waging an intense lobbying campaign” to try to scuttle the law.

When the Chinese government and the Communist Party of China (CPC) began the process of “opening up” economically and allowing private foreign investment in the 1980s, they realized the process would bring with it problems. How to deal with these problems has been a constant debate in China all along.

As large transnationals opened operations, one key problem was how ill-prepared Chinese unions were to deal with large capitalist corporations. General Motors, Boeing, Wal-Mart, Kodak and many others came to China for cheap labor and a huge new market. In short, to reap extra profits.

Several years ago the All-China Federation of Trade Unions (ACFTU) began discussion about how best to respond and change in the face of these new employers whose main interest was giant profits, not the common good of society and the working class. Most of these foreign owned companies brought with them the usual capitalist hostility to labor unions and a bag of anti-worker tricks and practices to get around labor law.

Wal-Mart was the poster boy for such ruthless anti-union, anti-worker cutthroat policies. Wal-Mart celebrated 10 years in China this past August, 10 years of Wal-Mart making it clear that it did not intend to honor Chinese labor law. It took the ACFTU several years of intense struggle to force Wal-Mart to recognize and bargain with the union. This campaign included working closely with the CPC and local governments to protect Wal-Mart workers from retaliation and firings for union activity. Just this month the ACFTU announced victory, with unions recognized at all 62 Wal-Mart stores in China.

The ACFTU focused on Wal-Mart precisely because of its world wide anti-union reputation. The new labor law and the campaign to organize Wal-Mart are two sides of the union federation’s adjustment and change to better fight for workers.

From the CPC central committee meeting it seems clear that China is beginning to see raising the standards of living for workers as the beginning of a shift from export-driven economic growth to consumer- and domestic-driven growth. In other words, raising the living standards of workers raises the domestic demand for goods and services.

For the ACFTU this means not only strengthening the unions but also, given the profiteering nature of the capitalist transnationals, adopting more class struggle forms of unionism. This strategy will continue and develop. The ACFTU already notes that since the victory at Wal-Mart, new unions have been established at some 300 other foreign companies. Now the federation’s strategy is to target foreign companies it considers to be the most anti-union. At the top of their list is Kodak, Dell and Taiwan’s Foxconn Electronics. They plan to double the number of unions in foreign-owned companies by the end of the year.

This important shift in Chinese unions should also go a long way in opening doors with U.S. labor for building international solidarity against the transnationals.

Scott Marshall ( is chair of the Labor Commission of the Communist Party USA.