updated 8/18/2006 11:42:49 AM ET 2006-08-18T15:42:49

An order by President Hu Jintao prompted China's state-sanctioned labor group to launch a campaign that led to the creation of Wal-Mart's first Chinese union, according to a newspaper report.

Such personal involvement by Hu in dealing with foreign companies is rare, and could help to explain the All-China Federation of Trade Unions' surprise success in forming a Wal-Mart union in July after the American retailer resisted organizing efforts for two years.

In a written order to the ACFTU in March, Hu said, "Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises," the Beijing News reported, citing the group's records.

The ACFTU responded by setting up an office targeting a Wal-Mart in the southeastern city of Quanzhou, where employees voted July 29 to form the company's first Chinese union, according to the newspaper's report Tuesday.

Since then, employees at 16 other Wal-Marts in China also have formed unions, according to the ACFTU, the umbrella group for unions permitted by the communist government.

If accurate, the report could presage sharply increased efforts to organize unions at foreign companies. The ACFTU says only 26 percent of China's 150,000 foreign companies have unions.

An ACFTU spokesman, Li Jianhua, would not say Wednesday whether an order by Hu led to a special effort targeting Wal-Mart Stores Inc., which employs 30,000 people at its 60 stores in China.

"In recent years, the ACFTU has consistently put a large share of workers in trade union organizations. This is important work. The time has come to achieve Wal-Mart unions," Li said.

Unions in China usually represent the workforce of a single company or outlet, rather than a whole industry.

The ACFTU has described the creation of the Wal-Mart unions as a boost to its campaign to reach a target of unionizing employees at 60 percent of China's foreign companies this year.

Wal-Mart, based in Bentonville, Arkansas, has resisted efforts to form unions elsewhere in its worldwide operations. But it said this month it would cooperate with the ACFTU to organize its Chinese employees.

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 This material may not be published, broadcast, rewritten or redistributed.


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