A new labour contract law will push up business costs in China next year and could force firms that are already struggling with rising expenses to shift production inland or out of China altogether.
The law will increase labour costs markedly and reduce the flexibility that has made China the world’s factory, businessmen and analysts say. [Full text]
China Law Blog also comments on the article, and on the law:
As China’s wages rise, the purchasing power of its citizens will no doubt rise as well and companies seeking to sell into China will benefit. China is serious about its desire to move from manufacturing rubber duckies to a more sophisticated economy. This new labor law is simply a part of that inexorable transformation and companies that use well drafted written contracts with their employees and put an employee manual into place should have little to fear. [Full text]