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October 13, 2006
China Drafts New Labor Rule Proposal
The New York Times tells how American companies are reacting to the proposed new labor rules in China.
The move, which underscores the government’s growing concern about the widening income gap and threats of social unrest, is setting off a battle with American and other foreign corporations that have lobbied against it by hinting that they may build fewer factories here.[snip]
Some of the world’s big companies have expressed concern that the new rules would revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany.
The Chinese government proposal, for example, would make it more difficult to lay off workers, a condition that some companies contend would be so onerous that they might slow their investments in China.
“This is really two steps backward after three steps forward,” said Kenneth Tung, Asia-Pacific director of legal affairs at the Goodyear Tire and Rubber Company in Hong Kong and a legal adviser to the American Chamber of Commerce here.
[snip]
Hoping to head off some of the rules, representatives of some American companies are waging an intense lobbying campaign to persuade the Chinese government to revise or abandon the proposed law.
The skirmish has pitted the American Chamber of Commerce — which represents corporations including Dell, Ford, General Electric, Microsoft and Nike — against labor activists and the All-China Federation of Trade Unions, the Communist Party’s official union organization.
I do worry about restrictions on firing employees for poor performance. Because it limits productivity growth, over the long haul, the Chinese economy could be hurt. But this is an issue for China to deal with and not a great crisis for American companies; certainly not enough to threaten the Chinese government. How about letting the "invisible hand" take care of the problem rather than use a prediction of how it might turn out as a threat. In other parts of the proposed regulations, American Companies doing business in China are defending practices there that would be condemned here it the US.
If approved as drafted the proposed legislation could be a great help for Chinese and potentially American workers. It would sure be nice if someone in our government thought "the widening income gap" here was a problem.
Posted by DuaneSmith at October 13, 2006 09:34 AM | Read more on Current Events |
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