Will New Labor Contract Law Up Manpower Costs in China?

Filed in archive Law on May 12, 2007

The draft of The Labor Contract Law of the People's Republic of China was originally passed as a first reading a year and a half ago now and the Asian Wall Street Journal reported recently that the law is now scheduled to see a vote on final passage in June. The law had been delayed while Beijing sought comments from the public and then sorted through more than 190,000 responses.

Chinese officials published a revised version of the law in December that included significant changes to the original document. The new law is set to strengthen worker rights; but the final draft of the law looks like it will be weaker on the role of trade unions than the original draft. Many outside observers are concerned that the law's stricter regulation of worker contracts could raise labor costs and make foreign companies reconsider working and investing in china.