Willie Sutton In China

When asked by a reporter why he robbed banks, convicted bank robber Willie Sutton famously replied, "because that’s where the money is." While Sutton later denied making the remark, it was such a fabulously duh response to a dumb question that the medical profession later adopted "Sutton's Law" to describe the principle of "going straight to the most likely diagnosis."

So, what has this got to do with China? Well, in a recent Financial Times article, we learn that the All China Federation of Trade Unions (ACFTU), fresh from its disastrous showing at the Honda strike (where its minions were videotaped beating up striking ACFTU members), has turned its attention to foreign-owned investment banks.

According to the article, "China's state-controlled union has targeted some of the world's largest investment banks in a recruitment drive that will see the multinationals have to pay a 2 percent payroll tax to fund labour activities.

"Union officials in Beijing's financial district summoned representatives of multinational investment banks to a meeting last month, at which they were encouraged to establish union chapters. The banks included Goldman Sachs, JP Morgan, Morgan Stanley and UBS."

Bank executives report being told directly by officials from the government-controlled ACFTU to organize a union. The response from the banks? Said one banker: "...we just got a 2 percent tax."

But was a 2 percent draw on bank profits the sole motivation behind the government's... uh...I mean, ACFTU's action? Of course not. (Although a tax on investment banks has a certain appeal.)

According to the Financial Times, the ACFTU skipped any consultation with actual bank employees, in order to give banks "a chance to control in-house activities by selecting the [ACFTU] chapters' members and leaders." Or, as one government ACFTU official put it: "In Europe or America, having a union is like having a [rival] manager in the company...Here a union is to help the company be more productive."

I guess serving corporate interests is "where the money is" for the ACFTU, with Honda being a case in point. If I were a Chinese bank worker, I'd be worried.