Wal-Mart Stores Inc. said Thursday it has agreed to cooperate with China's labor group in creating unions at its 60 Chinese outlets.

The announcement follows the creation of unions at five of the company's Chinese stores and is a victory for the All-China Federation of Trade Unions. The ACFTU had accused Wal-Mart of obstructing efforts to organize its 28,000 Chinese employees.

"Our mutual aim is to establish grassroots unions within each Wal-Mart store throughout China," said a statement issued by Wal-Mart.

Workers perform the warm-up dance during the opening ceremony of the newly opened Wal-Mart store in Shanghai in this July 28, 2005 file photo. Wal-Mart Stores Inc. said Thursday, August 10, 2006 it has agreed to cooperate with China's labor group in creating unions at its 60 Chinese outlets. [AP]

Wal-Mart is preparing to hold talks with the ACFTU on how to carry out union organizing, said Dong Yuguo, a spokesman at the company's China headquarters in the southern city of Shenzhen.

"We will talk about how the Wal-Mart stores in China will organize unions," Dong said. "We will talk about how to work with the ACFTU in a more effective and cooperative way."

Dong didn't give any details of when additional union votes might take place, saying such work "will develop step-by-step."

Wal-Mart has few unions elsewhere in its worldwide operations.

The company's statement quoted Joe Hatfield, president and CEO of Wal-Mart Asia, as saying it hopes its relationship with the ACFTU is "prosperous for our associates and for the growth of our business."

In a possible effort to mollify Chinese officials, Hatfield invoked the phrase used by the government to describe its current campaign to ease tensions over China's growing gap between rich and poor.

"We believe this is conducive to China's effort to build a harmonious society," Hatfield said.

Wal-Mart, based in Bentonville, Arkansas, opened its first store in China in 1996.

The new Wal-Mart unions are relatively small, with about 25 to 30 members each. Unions in China represent the work force of individual companies or stores, rather than a whole industry.

The first union was formed July 29 at a Wal-Mart in the southeastern city of Quanzhou. Since then, workers have formed three unions in Shenzhen and one in the eastern city of Nanjing.

The ACFTU says expanding its presence in private companies is one of its key goals, and it has expressed hope that its success with Wal-Mart will boost efforts to organize workers elsewhere.

About 26 percent of China's 150,000 foreign-financed companies have official labor unions, according to the ACFTU. The group says it hopes to raise that to 60 percent this year.