Wal-Mart's latest agreement with the Chinese government is proof that if you're going to do business in China, you've got to play by the rules.
The U.S. retailer, the world's largest, said Friday it had reached collective bargaining agreements with China's official union, the All-China Federation of Trade Unions (ACFTU), in several cities. Wal-Mart (nyse: WMT - news - people ) operates more than 100 of its namesake stores throughout China and employs 48,589 people.
Dave Orlins, president of the National Committee of U.S. China Relations, said the agreement is crucial to Wal-Mart's business. "To expand in China, one needs government support," he says. "This is what you should be doing in China."
And Wal-Mart knows as much.
"We support these efforts because of the valuable, mutually beneficial partnership the government-run union offers and because of their commitment to assisting businesses in our growth and development in China," said Kevin Gardner, a Wal-Mart spokesman.
The famously anti-union Wal-Mart has been something of a poster child for the Chinese government's drive to get all foreign-owned enterprises to recognize the ACFTU. The collective bargaining agreements come two years after the retailer yielded to sustained pressure to allow the union, the only one officially sanctioned in China, to organize at its local outlets.
Collective bargaining is a requirement of the Labor Contract Law that came into effect at the start of this year.Full article at Forbes.com
