It is inconceivable to me that Beijing is not aware of what is happening. The authorities must know. So why? Why did they insist on pushing the new labor law as late as March 2008, when the negative effects were becoming apparent to all and sundry? Except for some lawyers and a tiny fraction of the work force, everybody would lose. The governor of Guangdong succinctly stated that any government policy must consider its effects on workers, employers, and the state, and in his view the new labor law would hurt all three groups. He was apparently not welcome in the March Beijing meeting.
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