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DE RUEHBJ #4304/01 3390907
ZNR UUUUU ZZH
P 050907Z DEC 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 2746
RUEHC/DEPT OF LABOR WASHDC PRIORITY
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHSH/AMCONSUL SHENYANG 7249
RUEHGH/AMCONSUL SHANGHAI 6564
RUEHCN/AMCONSUL CHENGDU 7596
RUEHGZ/AMCONSUL GUANGZHOU 1958
RUEHIN/AIT TAIPEI 6129
RUEHHK/AMCONSUL HONG KONG 8552
RUEHGV/USMISSION GENEVA 1480

UNCLAS SECTION 01 OF 02 BEIJING 024304 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT PASS USTR FOR KARESH, A. ROSENBERG, MCCARTIN 
DEPT PASS NSC FOR R. HUNTER 
LABOR FOR ILAB 
TREAS FOR OASIA/ISA-CUSHMAN 
USDOC FOR 4420/ITA/MAC/MCQUEEN 
GENEVA FOR CHAMBERLIN 
 
E.O. 12958: N/A 
TAGS: ELAB EINV PGOV CH
SUBJECT:  CRITICISM OF AMERICAN BUSINESS FOR 
SUBMITTING COMMENTS ON DRAFT LABOR CONTRACT LAW 
 
REF: BEIJING 9677 
 
¶1.  (SBU)  Mission has recently become aware of 
criticism leveled at American businesses in China from 
western media and Congressional sources, particularly 
aimed at members of the American Chamber of Commerce 
in China (Amcham), for responding in March 2006 to an 
invitation for public comment on China's draft Labor 
Contract Law.  This criticism has been put forward or 
reported in the following publications and letters: 
 
-- Global Labor Strategies report, "Behind the Great 
Wall: U.S. Corporations Opposing New Rights for 
Chinese Workers" 
 
-- The New York Times, "China Drafts Law to Empower 
Unions and End Labor Abuse," October 13, 2006 
 
-- Letter from Congressman Rangel to Amcham Shanghai 
and US-China Business Council, dated October 24, 2006, 
(copy made available to us by AmCham) 
 
-- Letter from Congress of the United States to 
President Bush dated October 31, 2006, (available on 
the Internet).  In response, the US-China Business 
Council (USCBC) wrote to President Bush on November 7, 
2006, to present its side of the story (copy provided 
to Embassy Beijing). 
 
¶3.  (SBU)  In light of ongoing publicity and 
discussion of this issue, post notes that in May 2006, 
we provided an analysis (reftel) of the draft Labor 
Contract Law, noting the concerns raised by various 
businesses about specific provisions.  We offer the 
following additional information for Washington 
agencies' consideration concerning the role of United 
States companies in the debate over the draft: 
 
The National People?s Congress (NPC) published the 
draft Labor Contract Law in March 2006, and openly 
solicited public comment.  This was an unusual (but 
not unprecedented) step for the NPC.  (Comment. 
Embassy agrees with the numerous contacts who have 
interpreted the NPC's solicitation of comments as 
implying that the Chinese Government understands the 
potential implications such a law can have on the 
investment climate, suggesting a desire to get things 
right.  The Chinese Government is clearly sensitive 
about projecting China?s image as an open economy and 
a good place to do business.  End Comment.) 
 
-- Amcham provided the NPC with written comments on 
April 17, 2006, commending it for attempting to 
address problems China is encountering in 
implementation of the existing labor laws, while also 
pointing out what Amcham members perceived to be 
potential problems in the draft law.  Amcham provided 
respectful, well-reasoned arguments to support their 
position.  The USCBC also provided comments. 
 
--  Although the comments and positions taken by these 
organizations have drawn criticism, post is unaware of 
any lobbying effort against the Labor Contract Law, or 
any attempt to prevent the draft law from moving 
forward, by Amcham or any other party.  The USCBC's 
letter to President Bush specifically stated that 
"beyond submitting comments on the draft law, USCBC 
has not engaged or 'lobbied' the PRC Government on 
this issue." 
 
¶3.  (SBU)  Amcham and the USCBC have received no 
response to their comments from the NPC.  Whether or 
not the NPC takes the comments of United States 
business into account will be apparent when the next 
 
BEIJING 00024304  002 OF 002 
 
 
draft of the Labor Contract Law is made public. 
 
¶4.  (SBU)  Post can provide copies of the articles and 
letters referenced in this message.  Please send 
requests to Laboff Bruce Levine at LevineBJ@state.gov. 
 
RANDT