China yesterday introduced a new labor law that enhances rights for the nation's workers, including open-ended work contracts and severance pay.
"The government that is making the most concerted effort to protect workers rights is China," said Auret van Heerden, Geneva-based head of Fair Labor Association, which monitors work conditions in 60 countries.
That "goes against the conventional wisdom that China is leading the race to the bottom," van Heerden said.
Higher costs may drive many manufacturers with low margins out of China, damping investment in factories that helped push inflation to a ten-year high. Olympus Corp, the world's No. 4 digital camera maker, and Yue Yuen Industrial (Holdings) Ltd (
"We are likely to see more factory closures next year," said Stanley Lau (
The Labor Contract Law aims to improve job security for workers, making open-ended terms of employment an option for those who have completed two fixed terms.
The legislation limits overtime, sets minimum wages and guarantees one month's pay for each year worked for sacked employees.
The new law "will definitely raise our costs," said Edmund Ding (
Some companies have been terminating contracts and asking employees to resign ahead of the introduction of the law.
Huawei Technologies Co (
Some employees accepted, while others chose not to sign and left, he said, without providing details. The move wasn't aimed at evading legislation, Gan said.
RISING PRICES
Meanwhile, Chinese President Hu Jintao (
"The central government attaches great importance to commodity prices and has made it an important task to stabilize them," China Central Television quoted Hu as saying during a New Year's Eve visit to the northern port city of Tianjin.
"A series of forceful measures have been taken and will continue to be taken to ensure the normal life of the masses," Hu said.
Inflation hit an 11-year high of 6.9 percent in November, according to official statistics.
The spike was propelled by an 18.2-percent rise in food prices. Pork, which forms the core of most Chinese diets, was up by a staggering 56 percent.
He also vowed to curb rising housing prices to help low-income families, and to provide them with better health care benefits, two other top concerns of ordinary Chinese.
"The [Communist] Party and government are very much concerned about the housing problem of the low-income masses," Hu said.
"The central government has made arrangements to speed up the low-rent housing system, improve the affordable housing system and ease the housing difficulties of urban low-income families," he said.
The privatization of housing in China over the last two decades has led to a booming real estate market that has left homes unaffordable to not only low-income earners, but also to many ordinary working families.
Official figures show that property prices in 70 Chinese cities rose 9.5 percent year-on-year in October, up 0.6 percentage points from September, with prices in the eastern metropolis of Shanghai up 7.9 percent.
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