Will the New Labour Contract Law of the PRC Increase Cost of Doing Business in China?

The Reaction of employers in China for the newly effective Employment Contract Law (劳动合同法)(New Law) has been making headlines recently. It has been reported that Siemens raised the price of certain products based on the justification that the New Law will materially affect its cost; Huawei was criticized by the media for persuading its employees who had served eight years onwards to quit and sign fresh labor contracts if they are lucky enough to be selected by the employer in a competition for positions. At the same time, law professors comment openly that over-protection of interests of employees may have adverse effect on efficiency. This article will pick out some points of the New Law that may affect current or potential employers in China.