Foreign Policy in Focus

A major debate is underway in China on a proposed law that would significantly increase the power and protection of Chinese workers. Major U.S. and European corporations—acting through the American Chamber of Commerce in Shanghai, the U.S.-China Business Council, and the European Union Chamber of Commerce in China— are trying to gut the Chinese legislation.

China's proposed legislation will not eliminate its labor problems. The law will not provide Chinese workers with the right to strike or the right to independent trade unions with leaders of their own choosing. But foreign corporations are attacking the legislation not because it provides workers too little protection but because it provides them too much.

Foreign corporations fear that the law protecting Chinese workers may eliminate their cheap labor costs. Foreign corporations have another, less obvious, motive for opposing protections for Chinese workers. The ability to hire cheap labor in China has put downward pressure on wages and workers' conditions around the globe. China plays a key role in setting global wage norms.

The U.S. government should:

• instruct the U.S. ambassador in China and the U.S. Trade Representative to deliver letters to Chinese government officials in support of worker rights and protection provisions in the Draft Labor Contract Law;
• repudiate the efforts of any U.S.-based corporations and their representatives doing business in China to weaken such provisions;
• and urge pertinent U.S.-based corporations and their representatives doing business in China to reverse their opposition to the bill.

For the full version, go to Labor Rights in China.