| Within the changing era of China's economic boom and international rise, the conditions of doing business in China are changing continuously. Born out of the need to react to the widening gap between poor and rich and with the dream in mind to build a harmonious society, China is implementing more and more policies to control its rapid change. An important block of this building is the new Labor Contract Law, which tries to cope with an increasing number of labor disputes and an uneven distribution of rights between employer and employee. In this way, China being the main target of Foreign Direct Investments during the recent decades influences numerous Foreign Invested Enterprises, which partly feel threatened within their business in China.The new Labor Contract Law replaces the Labor Law introduced 14 years before, whose main target was to not threaten foreign investment, through too tough regulations, at any cost. The new act involves strengthened regulations on mandatory written labor contracts, more complicated layoffs, reduced possibilities of temporary employment, a strengthened position of labor unions, and clearly defined economic compensations. This way the Chinese administration introduces its favor for non-fixed or long-term labor contracts, which on one hand will stabilize the Chinese society but on the other hand might threaten investments, a rapidly growing economy, and ensured growth of wealth.Within this new system of regulations, the possibility of companies to lay off personnel is an important freedom of managers in order to cope with changing situations and future challenges. Therefore, this paper aims to focus on the change of possibilities to layoff personnel for Foreign Invested Enterprises and their management implication for doing business in China. Will this future development threaten China's rise to the top of the economy, or is it a necessary step in order to become a part of the world economy?... |
