The European Union Chamber of Commerce in China says it applauds the new Labor Contract Law adopted on June 29, 2007 by the Standing Committee of China's National People's Congress.

Joerg Wuttke, president of the European Union Chamber of Commerce in China said, "I can only praise the process. Among others we were invited to comment on the drafts. I was amazed to see that about 190,000 organizations and individuals responded to the State Council Legislative Office. We submitted a detailed report on what we considered as best international practice. Our HR Working Group consisting of company managers and lawyers put together a very comprehensive paper that the State Council Legislative office considered valuable.”

The Chamber says that many of the articles presented in this new law stem from labor laws in Europe and the law will assist companies in improving working conditions. The development of clear guidelines and provisions will ensure that this legislation is effectively implemented across the board.

The Chamber says it is not concerned about the effect of the law on European investment in China because it says several studies worldwide have proved that labor cost is not the primary factor influencing corporate investment strategy. Instead, according to those studies, market size and growth potential turn out to be the chief reasons for investment influx.