(China Daily)
Updated: 2008-01-02 07:45

As the government is making efforts to protect the interests of workers it should avoid going to the other extreme - adding to the burden of enterprises, says an article in Beijing News. The following is an excerpt:

The protection of labor rights has obviously been strengthened with the implementation of the new Labor Contract Law. It is also reported that China will draft regulation on employees' wages.

The improvement in labor protection also means a rise in production costs. Recently, some enterprises have started to sack employees. Their worries stem from misinterpretation of the new law, and pressure from rising labor costs.

We should avoid going from one extreme to another: in the past, we over-protected the interests of enterprises; we should stress their responsibilities, but not neglect government's support for them.

Is it possible to balance the interests of enterprises and employees as they both are facing the pressure of inflation? Only an outside force, that is the government, can help raise the profits of enterprises and increase wages of employees.

First, the government should accelerate reform of the residential system so that workers can move freely to maximize their value.

Second, the government must break the monopoly of some enterprises so that the small and medium-sized ones can have more opportunities to grow. The government should prevent State-owned enterprises from squeezing out the smaller ones.

(China Daily 01/02/2008 page8)