IMPACT OF GLOBALIZATION ON TRADE UNION MOVEMENT:

At present, there is a growing trend towards economic globalization. Globalization has promoted
economic growth while at the same time, it has caused social problems such as the unequal
distribution of income. The vast numbers of developing countries as a whole have remained at a
disadvantageous position. As gap between the North and the South widens and disparity between
the rich and the poor grows, developing countries have found it more difficult to achieve sustainable
development.

Globalization has not only produced political and economic implications for various countries but
also brought far-reaching influences on the world trade union movement. All this has captured the
wide attention of trade union organizations at national, regional and international levels. To this end,
I’d like to make some initial comments on globalization from the following two perspectives.

I. Major impacts of globalization on the international trade union movement

(i) In the process of globalization, neo-liberal economic policies taken by many countries
have weakened the foundation of trade unions.

Globalization has intensified economic competition among nations. To increase the

competitiveness of their products in the global market, many countries have adopted the
so-called neo-liberal policy, with one of its key parts being legal restrictions on workers’
rights for the sake of higher economic efficiency. As a consequence, trade unions in
many countries have lost their rights that they had won through many years of struggle,
and their political foundation has increasingly eroded away.

At the same time, neo-liberal policies strongly advocate labour market flexibility, namely,
de-regulating labour market and empowering employers in areas of hiring, firing, wage,
and use of labour. As a result, informal employment and cheap forms of labour, such as
part-time, casual and domestic workers, have become prevalent over the past few years.
Those informal workers have not enjoyed adequate protection for their employment,
wages, social security and occupational health and safety. Changes in employment
patterns have in turn rendered it very difficult for trade unions to organize workers.

The rapid technological revolution, coupled with economic globalization, has accelerated
the pace of structural adjustment. With the further division of international labour, some
developed countries have shifted their labour-intensive enterprises to other countries.
Trade unions in those developed countries have lost some of their traditional industrial
bases. In the meantime, the fast application of new and high technologies in traditional
industries such as steel, manufacturing and construction has caused a drop in labour
demand on a yearly basis. Furthermore, the traditional ways of trade union work have
been challenged in IT and other hi-tech industries. Against such backdrop, union density
has declined in many countries.

(ii) Globalization has expedited the internationalization of trade union work.

Trade unions are a product of socioeconomic conflicts and industrial disputes in the
industrialized society. Trade unions gain their legitimacy through national legislation and
other means, and protect their members’ rights within their jurisdiction. Due to economic
globalization, capital has become global rapidly, which challenges the traditional means
of worker protection by trade unions and internationalizes industrial disputes. In
particular, disputes between workers and their trade unions and multinational companies
have taken place from time to time. In terms of labour-capital conflict, workers of all
countries have the same interests. However, in the context of the irrational international
political and economic order, increasingly prevalent protectionism in many developed
countries has made it a pressing task for the workers and trade unions in developing
countries to better protect their own interests and safeguard their national economic
security.

(iii) Globalization has increased the disparity between the haves and the have nots.

The developed capitalist countries have initially pushed economic globalization, in which
process they have always played a leading role. Although globalization has contributed
to the overall development of the world economy to some degree, developed countries
have turned out to be its biggest beneficiaries, on the grounds that the old international
political and economic order remains basically unchanged and that they hold a strong
position in capital, technology, skills, management, trade, investment and finance. They
harness their strength to scramble for markets in the whole world and spare no efforts to
maximize their interests. For developing countries, globalization is a double-edged
sword, which brings both opportunities and challenges. Due to their relative
backwardness in economic development and technological level, the vast numbers of
developing countries are on the whole at a disadvantageous position and thus meet with
severe challenges. Globalization has intensified conflicts between the North and the
South and resulted in the rich getting richer and the poor poorer. In the meantime,
developed countries have also experienced greater wealth disparities, with their working
people at the middle and lower strata of the society benefiting little from globalization.

II. Opportunities and challenges brought by globalization to the Chinese trade unions

With the in-depth development of reform and opening-up in China, especially since its
entry into the WTO, opportunities and challenges brought by globalization have shown
up gradually. Over the past 20 or more years, we have attached great importance to
formulating and improving laws and regulations and protecting the legitimate rights and
interests of workers while accelerating reform and opening up. As we sped up economic
development, we have paid more attention to coordinated economic and social
development and the constant improvement of the living standards of people. In this
process, the Chinese trade unions have strongly supported the policy of reform and
opening-up and worked hard to better protect the legitimate rights and interests of
workers. Recently, our Party and government have put forward the scientific
development concept, which emphasizes a people-centered, all-around and sustainable
path of development. In general, China has witnessed a sustainable, speedy and sound
economic development, a social stability and unity and a continuous improvement of the
living standards of the people.

However, we are fully aware of the fact that, as a developing country, China is generally
at a low level of economic and social development. Our international competitiveness is
still poor. Especially since its accession to the WTO, our country has accelerated the
pace of industrial restructuring, which has in turn exerted tremendous economic pressure
on some enterprises, particularly those state-owned enterprises undergoing structural
transformation. Today, we are faced with the following challenges:

(i) With the deepening of reform and opening-up, China has continued to face enormous
employment pressures. The Chinese trade unions have heavy tasks in promoting
employment and protecting workers.

China has a large population and faces a big challenge of employment. Since China
entered into the WTO, some enterprises and industries have further intensified their
structural adjustment. Redundancies have added to structural unemployment. In
particular, some traditional industries and some old industrial bases have plunged into a
difficult situation due to market competition and thus have little potential for employment
generation. In 2003, the urban registered unemployment was eight million, or 4.3%. It is
estimated that this year total unemployment will reach around 14 million, with newly
added labor in urban areas rising to 10 million. It is not hard to see that employment and
reemployment pressure facing the country is still great. At the same time, with the
opening-up of the Chinese agricultural market to the outside world, agriculture has also
undergone large-scale structural adjustment. A large number of rural migrants have
flocked into urban areas, which has further exacerbated our employment problem.

In recent years, great changes have taken place in the structure of the working force.
There is a great gap between the knowledge and skill level of workers, including those
farmer-turned-workers, and the need of modern production. Therefore, we are under
heavy pressure in terms of training provision.

As the tertiary industry expands rapidly, the number of workers in informal sectors has
risen steadily. It is becoming more imperative to protect the legitimate rights and interests
of workers in those sectors.

Because of the heavy tasks of employment and reemployment as well as the change of
employment forms, we are faced with the more arduous tasks of protecting and securing
workers’ right to work and assisting the government in accelerating the establishment of
a social safety net.

(ii) Foreign-funded enterprises pose new challenges to the Chinese trade unions.

An increasing number of foreign-invested enterprises have not only generated a new

source of economic growth, but also produced new effects on industrial relations in
China. According to the State Statistics Bureau of China, by the end of 2003, 8.197
million workers had been employed in overseas-invested enterprises. Thus, it is one of
our top priorities to organize those workers into our unions and protect their legitimate
rights and interests.

Foreign-funded enterprises differ greatly from those domestic ones in terms of

employment pattern, management style and distribution mode. However, it is the latter
rather than the former that the Chinese trade unions are familiar with. To improve their
popularity and competitiveness on the international market, some multinational
companies are now launching campaigns for the so-called corporate social responsibility,
including codes of conduct like SA8000. They are trying to incorporate international
social and labour standards into their internationalized production and operation system.
Right now, we are studying these new developments.

(iii) With the expansion of China’s economy, Chinese enterprises are gradually entering
into the international market, and labour relations in the Chinese-funded enterprises
overseas are one of new concerns of the Chinese trade unions.

So far, China has made remarkable progress in overseas investment, covering many
regions and sectors. By the end of 2003, our country had invested 33.2 billion US Dollars
 in establishing 7470 non-financial enterprises in more than 160 countries and regions. At
the same time, the areas of Chinese overseas investment have extended from trading,
shipping and catering to processing, manufacturing, mining, engineering, farming,
research and development and others that are encouraged by the Chinese government.
Up to now, the number of Chinese companies, engaged in overseas investments and
operations, has totaled 300,000. Through the implementation of the “outgoing” strategy,
on one hand, China has developed closer political and economic relations and
cooperation with other countries. On the other hand, it has contributed to the economic
and social development of some other countries, particularly the vast number of
developing countries, promoted worker employment, taxation growth and economic
development, and achieved supplementary and common development together with
these countries.

We are devoting great attention to the formation of harmonious industrial relations in the
Chinese overseas enterprises. According to our knowledge, industrial relations in those
enterprises are generally sound, but some problems still exist. We are ready to help
those Chinese enterprises and their host countries to achieve win-win results through
exchanges and cooperation among our trade unions.

Friends,

Economic globalization is an irreversible process of the world economic development.

The Chinese trade unions believe that it is a wise choice to study the impacts of
economic globalization on the working people and trade unions, strive to exploit its
possible benefits and avoid its adverse impacts, and effectively represent and protect the
rights and interests of workers.

The process of economic globalization is also one of the worldwide spread of market
economy. Market economy helps to optimize the use of resources and increase the
profits of enterprises. However, market by its very nature does not protect the weaker. In
the process of economic globalization and structural adjustment, trade unions should
concern for and better protect the legitimate rights and interests of the vulnerable groups,
and promote economic and social development in a coordinated and sustainable way.
In conclusion, the Chinese trade unions calls for the international trade union movement
to accord more attention to, and provide better protection for, the rights and interests of
developing countries and their working people, and make every effort to eliminate and
check the unbalanced development of globalization and the widening gap between the
North and the South. Let’s join hands and grasp the opportunities of globalization and
meet its challenges.

TYPES AND STRUCTURE OF TRADE UNION: