Jonathan Dong, a spokesman for Wal-Mart Stores Inc. in China, confirmed the company had agreed to open its Chinese stores to the state-run union.

"We're working together now to achieve that goal," said Dong, adding that the two sides were still negotiating details.

Dong said Wal-Mart's 60 stores in China would be open to forming unions, but it was up to employees to decide whether to set up unions in their stores.

Earlier this week, the All China Federation of Trade Unions had warned the world's largest retailer not to act against union members or workers who wanted to join the union.

"The law says it's a voluntary action of the associates," he said, referring to Wal-Mart employees. "Wal-Mart will give union officials the opportunity to explain the benefits of joining."

Asked why Wal-Mart had agreed to allow unions in China while it resists them in other countries, Dong said: "The union in China is fundamentally different from unions in the West. ...The union has made it clear that its goal is to work with employers, not promote confrontation."

Dong said the two sides were still discussing whether the 2 percent of wages that China's union is authorized to take would apply to all employees of a store or just union members.

Dong said Wal-Mart now has 32,000 employees in China, with 60 stores in 30 cities. He said the company would open between 18 and 20 more by the end of 2006.

So far, six stores had formed unions, he said.

Foreign companies are worried that they will be at a disadvantage if a union with new legal rights is imposed on them.