The NYT reports:

Many multinational corporations had lobbied against provisions in an earlier draft of the labor law. The early draft, circulated widely in business and legal circles, more sharply limited the use of temporary workers and required obtaining approval from the state-controlled union for layoffs.

Companies argued that the rules would substantially increase labor costs and reduce flexibility, and some foreign businesses warned that they would have little choice but to move their operations out of China if the provisions were enacted unchanged.

International labor experts said that several of the most delicate clauses had been watered down. But lawyers representing some big global companies doing business here complained today that the new law still imposes a heavy burden.

“It will be more difficult to run a company here,” said Andreas Lauffs, a lawyer at Baker & McKenzie, which represents many of America's biggest corporations in China.

To read more:

http://www.nytimes.com/2007/06/30/business/worldbusiness/30chlabor.html?ex=1340856000&en=9463bc7c119152e8&ei=5088&partner=rssnyt&emc=rss