US retail giant Wal-Mart has said it will allow its employees in China to form a trade union.

"Should associates request formation of a union, Wal-Mart China would respect their wishes and honour its obligations under China's Trade Union Law," the company was quoted by Reuters as saying.

Wal-Mart, whose employment practices have been criticised in the past, had come under increasing pressure from China to allow the formation of a trade union. Independent trade unions are illegal in China - instead unions are controlled by the country's trade federation, Reuters reported.

"Currently there are no unions in Wal-Mart China because associates have not requested that one be formed," the retailer said in a statement.