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Wal-Mart Faces Scrutiny Over Suppliers’ Chinese Labor Violations

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Wal-Mart Faces Scrutiny Over Suppliers’ Chinese Labor Violations

Wal-Mart Stores (WMT) is the target of a new, unflattering report about the Chinese labor practices of some of its suppliers.

New York-based China Labor Watch (CLW), has released a report on its investigation of Wal-Mart Stores, Inc. [[WMT]] Chinese supply chain’s labor practices.

The report notes that due to consumer scrutiny, Wal-Mart established corporate responsibility standards for its Chinese supply chain that are enforced through factory audits. However, CLW reports that factories exploit and cheat on their commitments.

CLW investigations from April to June 2009 of Walmart suppliers Huasheng Packaging Factory and Hantai Shoe Factory found alleged violations including:

  • Some workers make only $0.51/hour, 60% of the minimum wage.
  • Poor working conditions: workers inhale large amounts of paper particles and other debris.
  • Twelve workers live together in cramped dorms.
  • Workers not paid overtime wages.
  • During busy season, workday is 11 hours or 77 hours per week, and overtime is mandatory.

Clearly these violations raise ethics concerns among many, but even callously setting aside such concerns (or arguing, as some do, that even if these allegations are true, the workers are still better-off than they otherwise would be) Wal-Mart should be concerned about continued attention to its labor practices given its history of mixed public relations management.

The company has made great strides recently overcoming villinization by union groups. It would be a serious business mistake to ignore the treatment of workers overseas and allow it to become a new cause that competitors, such as Target Corporation [[TGT]] – with its more friendly corporate facade, could exploit.

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Man Bites Dog? Patent Suit Filed by Chinese Company Against U.S. Companies

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Man Bites Dog? Patent Suit Filed by Chinese Company Against U.S. Companies

In a symbolic moment for China’s economy, a Chinese manufacturer has filed a patent infringement suit against major U.S. retailers including Best Buy (BBY), Wal-Mart (WMT), Target (TGT) and Staples (SPLS).

Changzhou Asian Endergonic Electronic Technology Co. filed a lawsuit against numerous U.S. retailers, including Best Buy Co. [[BBY]], Wal-Mart Stores Inc. [[WMT]], Target Corp. [[TGT]], and Staples Inc. [[SPLS]] alleging infringement on its patented design on dashboard mounts for GPS units.

Changzhou claims that the retailers are selling products made by a competitor that violate its intellectual property rights. The company is also suing the Chinese manufacturer of the product that the U.S. retailers are stocking.

The case, the firt of its kind where a Chinese company has filed a suit in U.S. court over a patent developed in China, may mark a whatershed moment for China’s place on the international economic stage. Long recongized and the world’s most important up-and-coming player, China has still been seen only as a limited force in business: offering incredibly cheap manufacturing and a burgeoning consumer class to sell to but little else.

This suit may turn attention to the innovation happening in China while also spurring more of it.

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