China: Latest Development and Characteristics of Chinese Trade Unions

Last Updated: 8 August 2011
Article by Linda Yanling Liang

In recent years, the All-China Federation of Trade Unions ("ACFTU") has been actively promoting the establishment of trade unions in enterprises. Many enterprises have received notices from trade unions at higher levels requiring them to set up their own unions. In addition, since last year, there have been several collective labor disputes and mass labor disturbances taking place around China, posing great challenges to the industrial relations and the human resource management of the enterprises. In view of the above, this article provides a brief summary of the latest development and characteristics of Chinese trade unions, with an aim of assisting enterprises dealing with issues they may face during the process of the establishment of trade unions.

I. Trends on the Developments of Trade Unions

A. ACFTU: Promoting the Establishment of Trade Unions and Union Membership

In July 2010, at the 4th Plenary Session of ACFTU's 15th Executive Committee, ACFTU Chairman Wang Zhaoguo proposed a "two universality" work requirements, i.e. facilitating the universal establishment of trade unions and the universal implementation of collective wage bargaining in all enterprises in accordance with laws. ACFTU's goal is to raise the unionization rate of enterprises above 60% nationwide by the end of 2010, above 80% by the end of 2011, and to achieve the universal establishment of trade unions in all enterprises by the end of 2012. Thus, promoting unionization among all types of enterprises, especially foreign invested enterprises and Hong Kong/Macao/Taiwan invested enterprises, has become a top priority on the work agenda of trade unions at all levels in China.

In order to implement the "two universality" requirements, from September to December of 2010, ACFTU launched the "Broad Survey, Deep Unionization, and Full Coverage" campaign across the country. In Beijing, Shanghai, Shenzhen and other regions, the local trade unions at different levels have set up active plans based on particular local conditions and have carried out a series of intensive unionization campaigns.

During the same period, with regard to unionization in foreign invested enterprises and Hong Kong/Macao/Taiwan invested enterprises, ACFTU has worked on the "Promotion of Unionization Work among the World's Top 500 and Other Multinationals". Moreover, ACFTU has set up a special task force, overseeing directly the unionization effort of some of the world's top 500 companies' Chinese headquarters and their subsidiaries or branch offices. According to press reports, by the end of 2010, the unionization rate among the Chinese headquarters of the world's top 500 companies and other multinationals has reached over 90%.

In addition, ACFTU also plans to release the Measures of Democratic Elections for Base-Level Trade Union Organizations this year to standardize base-level trade unions' electoral system. This clearly shows the great efforts ACFTU has made to intensify unionization in enterprises.

B. Beijing: Promoting the Collection of Trade Union Funds and Trade Union Establishment-preparation Funds through Local Tax Bureaus

Since July 1, 2010, the Beijing Federation of Trade Unions has introduced two pilot programs, the "collection of establishment-preparation funds" and the "collection of trade union funds (establishment-preparation funds) by local tax bureaus", in Xicheng District (i.e. former Xuanwu District), Fengtai District and Changping District.

Firstly, enterprises without their own trade unions shall pay trade union establishment-preparation funds equivalent to 2% of the total wages of all of their employees every month ;

Secondly, the trade union funds as well as the trade union establishment-preparation funds shall be collected by the local tax authorities where the enterprises are located. This approach changes the traditional collection model, for it links the collection of trade union funds to the compulsory collection power of the tax authorities to ensure the payments of trade union funds by the enterprises.

The above two programs will be expanded to more districts in Beijing this July and will cover all districts in Beijing next January.

C. Shanghai: Facilitating Enterprise Unionization by the Workers Congress System

Regulations of the Shanghai Municipality on Workers Congress ("Regulations") has already become effective as of May 1, 2011. According to the Regulations, all enterprises, including Hong Kong, Macao and Taiwan invested enterprises and foreign invested enterprises shall establish and implement the Workers Congress system, and trade unions of enterprises are the operating mechanism of the Workers Congress and undertake its daily work. In addition, Chapter 5 "Rules of Procedure" and Chapter 6 "Operating Mechanism" of the Regulations repeatedly mention the separation and cooperation between the trade union and the Workers Congress. Thus, the Regulations clearly require enterprises to set up trade unions for the democratic management of the enterprises.

D. Shenzhen: Innovating on Trade Unions' Establishment Models and Organizational Forms

In Shenzhen, the unionization rate of the enterprise, especially the big multinationals, is high relative to the national level. Statistics from the Shenzhen Federation of Trade Unions show that, the unionization rate of all enterprises in Shenzhen and that of the world's top 500 companies in Shenzhen have both reached over 90%.

In this context, the Shenzhen Federation of Trade Unions is now considering innovations in the organizational forms of trade unions. For instance, for some large enterprises, it plans to adopt the concept of trade union federation, i.e. to form a united trade union by combining the trade union of the parent company with those of its affiliates and adopting a full-time trade union president, in contrast with the present model of establishing trade unions in the parent company and its affiliates respectively. The purpose for this is to facilitate the unified management by trade unions at higher levels and increase coordination among the trade unions in the same enterprise group. Moreover, this is helpful to the collective bargaining mechanisms to be carried out in the near future. Though this arrangement is still in the early stages, it deserves special attention since it represents a possible future development trend of trade unions of large enterprises in Shenzhen.

II. The Characteristics of Chinese Trade Unions

Enterprises face a variety of questions in the context of ACFTU's promoting the establishment of enterprise level trade unions, For example, companies may ask, "Is unionization necessary?" "What types of unions should be established?" "How does an enterprise establish a trade union?" etc. The answer to these questions requires both an accurate understanding of Chinese macro policies for the present and a full appreciation of the characteristics of Chinese trade unions. Compared with trade unions in Western countries, Chinese trade unions have the following peculiarities:

A. The Nature of Chinese Trade Unions: Mass Organizations under the Leadership of the Party

The Chinese Trade Union Constitution explicitly stipulates that Chinese trade unions accept the leadership of the Communist Party of China ("CPC") and are important social pillars of the state power. This is the most important difference between trade unions in China and those in Europe and the U.S. Serving as the president of ACFTU, Mr. Wang Zhaoguo is also a member of the Poliburo of the CPC Central Committee and the Vice Chairman of the Standing Committee of the National People's Congress. Likewise, the Vice President and the First Secretary of the Secretariat of the ACFTU, Mr. Wang Yupu, is also the alternate member of the Seventeenth CPC Central Committee. In addition, the staff of all levels of trade unions in China receives the same treatment and benefits as the personnel of the state organs.

In typical parliamentary democratic countries in the West, trade unions are politically independent of any political parties. But sometimes, for the rights and interests of the workers that they represent, trade unions also need to solicit certain parties to speak for them in the parliament, so as to contend with those representing capital. Therefore, trade unions and political parties in Western countries are both cooperative and competitive with each other.

B. The Structure of Chinese Trade Unions: A Unified Organizational System Headed by ACFTU

Chinese trade unions are structurally unified under the leadership of ACFTU. To be more specific, firstly, ACFTU is established at the national level as the highest leading body of all levels of local trade unions and industrial unions, and all trade unions in China are subordinate to ACFTU. Secondly, higher level trade union organizations lead the lower level ones, and the establishment of various levels of trade unions must be reported to the trade union at the next higher level for approval. Moreover, enterprise trade unions are established taking the enterprise as a unit, and they are the base level trade union organizations.

By contrast, in the West, trade unions are divided primarily by the nature of the industry, and there are various kinds and different forms of trade unions. Therefore, the diverse characteristics of trade unions in these countries are very obvious. For example, usually a number of trade unions for different industries coexist in the same enterprise, thus making it possible for employees to join one or more trade unions of different nature according to his/her own needs. As different trade unions always represent different interests, the pluralistic structure could possibly affect the respective power of these trade unions. But in power struggles between labor and capital, trade unions are often unified as one. Hence, the antagonism between labor and capital is relatively more obvious.

C. The Coverage of Chinese Trade Unions: Universality

Statistics from ACFTU show that, as of August 2010, there are 1,800 base level trade unions and 200 million union members throughout China, with more than 50% of all enterprises having a trade union. It is said that both the unionization rate of enterprises and that of employees are expected to reach 90% and above by the end of 2012.

In Western countries, thanks to their developed legal systems, the protection of a union member's rights is not much different from that of a nonunion worker's rights. As a result, the union membership rate in these countries is not high, usually about 20% to 30%.

D. The Function of Chinese Trade Unions: Assisting the Enterprise in Exercising its Business Management Rights

Article 38 of the PRC Trade Union Law clearly prescribes that the trade union shall support the enterprise in exercising its power of operation and management in accordance with law. It is thus clear that what is particularly unique about the Chinese trade union is that it not only represents and protects the workers' legitimate rights and interests, but also needs to respect and support the enterprise's executive power and production needs. Furthermore, the Chinese trade union has no right to organize the workers to strike.

In conclusion, Chinese trade unions are not completely antagonistic to the enterprises; instead, the trade union and the management shall treat each other with mutual respect and support. On the one hand, an enterprise trade union may fight for more economic interests for workers through negotiation; and on the other hand, it can also provide the employer with a stable work force in order to avoid shutdowns, strikes and other mass emergencies affecting the normal production and operation activities of the enterprise.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions