How to define the "10 consecutive years" remains a controversial issue. According to Long, the ACFTU is actively working with the NPC, the Ministry of Labor and Social Security and Ministry of Justice to supplement the new law with regulations and interpret the new law so that it will be implemented more effectively.

On one side of the dispute is Professor Chang Kai of Renmin University of China in Beijing, representing the "pro-labor" camp, and on the other side is Professor Dong Baohua of Shanghai-based East China University of Politics and Law, representing the "pro-capital" camp. The new law has taken more ideas from the "pro-labor" side, and thus some people argue that it protects employees at the cost of employers.

Zhang Jianguo, CEO of ChinaHR.com, a well-known job board, believes that the new law has put huge social responsibility on the shoulders of companies like Huawei, and Huawei "had to adjust its policy in order to survive the new law." Some insiders admit that Huawei's strategy is "a proactive once-and-for-all solution to the future challenges in human resources management posed by the new law."

Yet, more people believe that employment relations in China have favored employers for a long time, and it will be difficult for the new law to correct the imbalance in the labor market in a short time. A survey administered by China Youth Daily, an influential national paper, showed that 87.4 percent of the respondents believed the new law has not given employees too much protection, while 69.4 percent of the respondents thought the law has not given employees sufficient protection.

A tough issue

Du Yang, a labor specialist in the Chinese Academy of Social Sciences, believes that the new law will not only change relations between employers and employees, but may also change relations between employees, and relations between the employed and the unemployed. In particular, the new law will increase labor costs so employers will try their best to minimize their labor force, making the tight labor market even tighter.

Some foreign organizations, such as EU Chamber of Commerce, said that the new law could have significant impacts on foreign enterprises in China, because it would "reduce the flexibility of hiring and firing, and increase labor costs. High labor costs might force some foreign companies to reconsider whether they will increase their investment or continue to operate in China."

Some Chinese experts, such as Ma Jianjun, senior labor lawyer in Shanghai Junhe Law Office, have voiced similar worries. "Low labor cost is the competitive advantage of China, and is what attracts foreign companies to invest in China, especially in the manufacturing industry. If labor costs are high, why should foreign investors come to China?" he asked.

But to Liu Jichen, Director of the ACFTU's Legal Affairs Department, China's overall labor cost will still be low compared with developed countries, even after the new law takes effect. To some extent, a pro-labor employment contract law can motivate workers and enhance work efficiency, creating a more favorable investment condition. Vice versa, inappropriate protection to workers' rights will hurt employment relations and the investment environment, which is a nightmare for investors.

In fact, finding a balancing point between employers and employees is a complicated issue worldwide. For instance, in the United States, the labor market is not highly regulated, the unemployment rate is low, and the economy is robust and highly competitive. In Europe, where the labor market is highly regulated, workers enjoy a high degree of protection and social welfare, yet this reduces the competitiveness of European economies in a globalized world market. Recent economic slowdowns in Spain and France might have something to do with their generous protection of workers.

"China is so complicated that it is not easy to find a balancing point between employers and employees, which requires legislators in China to constantly reevaluate the situation", said Du.

Labor unions in China, however, plan to do their part to find a balancing point. On December 5, 2007, ACFTU held a press conference, revealing its plans to address violations or evasions of the new law. It called on unions across the nation to educate workers so that they can protect their own rights, report violations of the law, advise workers on employment contracts and urge government departments to clarify some clauses in the law. The ACFTU will monitor the clarification and implementation of the new law and make specific suggestions when necessary.