Seventy-three percent of foreign companies operating on China's mainland have established trade unions, Xinhua news agency reported today.

Unlike a few years ago when foreign companies didn't allow employees to set up unions, 110,000 now have granted permission, Zhang Mingqi, deputy president of the All-China Federation of Trade Unions, told a press conference held on the sidelines of the ongoing parliament session today.

Zhang Mingqi, deputy president of the All-China Federation of Trade Unions

Zhang said 52.2 million workers in the country's private sectors have joined unions after multinationals such as Wal-Mart and Kodak agreed to form unions.

Wal-Mart across China, Kodak in Xiamen, Dell in Xiamen, Samsung in Tianjin, Seagate Technology in Wuxi, McDonalds and KFC once banned trade unions.

Wal-Mart previously banned trade unions at its outlets worldwide, but later compromised and set up its first one in Quanzhou City, Fujian Province, on July 29, 2006 after its employees appealed to local federations of trade unions and the national trade union lambasted its practice.

China now boasts about 1.51 million grassroots unions, comprising 193 million members, said Zhang.

Moreover, 61.97 million migrant workers have also joined a union, accounting for 51 percent of the country's 100 million people working outside their home province, the report said.

China's new Labor Contract Law, which came into effect on January 1, entitles staff with more than 10 years of service at a company to sign contracts without a time limit that would protect them from dismissal without cause.

However, this law created fear among employers as it might increase their costs in cutting staff and reducing work force flexibility.

Some companies, including Huawei, China's most famous Internet equipment producer, fired a massive number of employees before the law took effect.

But according to an investigation by the All-China Federation of Trade Unions, employers will only see a slight increase in costs when following the law, Zhang said in an earlier report.

Zhang also urged employers to comply with the law and not to seek growth at the expense of workers, the report said.

(Shanghai Daily March 14, 2008)