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China's top trade union official and lawmaker Wang Zhaoguo proposed Wednesday an amendment to the Trade Union Law, making it compulsory for foreign-funded companies to unionize.

The move is aimed at countering obstinate refusals by foreign companies, including the world's leading retailer Wal-Mart, to recognize trade unions for employees in China.

Wang, president of the All-China Federation of Trade Unions (ACFTU) and vice-chairman of the Standing Committee of the National People's Congress, said he would "initiate amendments to the Trade Union Law stipulating that companies are obligated to safeguard the establishment of trade unions."

The existing law says that employees may apply for setting up labor unions at their will but fails to specify the duty of companies in assisting such an installation.

Many foreign companies, including the Wal-Mart, has been taking advantage of this stipulation to obstruct the setting up of a union, an ACFTU official said.

Wang admitted that it has been a tough task to unionize in foreign companies, mainly located in economically boomed coastal regions in the East.

"We started to push Wal-Mart to set up union branches two years ago, yet there is not a single one built so far," Wang said, "we will continue to work on this."

As early as 2003, ACFTU has made repeated efforts talking to the retail giant about setting up trade unions, which all turned in vain, as Wal-Mart responded that according to Chinese law, a trade union could only be installed at the free request of employees, and since there have been no requests yet, there is no necessity to establish a union.

The retailer also said it had constituted a series of regulations under Chinese laws, especially those that relate to trade unions, offering effective channels to resolve complains from employees.

However, ACFTU officials said though many employees of foreign-funded companies wish to join a trade union, they cannot afford to raise the issue for fear of losing jobs or other benefits.

Chinese law stated that a trade union is usually required to be installed at every company of a certain scale, which is different from that of the United States, which allows workers to establish their own trade unions, without organizational affiliations to their employers.

Up to date, China has more than 100,000 overseas companies, plus those from Taiwan, Hongkong and Macao, but no more than three tenths have built labor unions.

"Without trade union's protection to employees, many foreign companies only grant the least standard of salary to workers to save costs," Wang Zhaoguo said.

"In a long run, these companies will also hurt domestic producers by squeezing the purchase price at a very low level to afford the cheap prices of their goods, thus cause vicious competition within the industry," the top unionist said.

ACFTU now have 1.17 million branches across China with 150 million members. About 7.7 million trade unions are set up in companies.

Wal-Mart is accelerating its store openings in China - it plans to open at least 18 this year, according to a Los Angeles Times report, it had bought goods worth US$18 billion from Chinese manufacturers last year.

(Xinhua News Agency July 6, 2006)