China Heads for Europe

Firms flock to the Chinese mainland because production are so tremendously low. The astonishing growth of the world's most populous country has lifted tens of millions of people out of poverty. The Chinese government, for some reason, thinks this is a bad thing.

China is adopting new and restrictive labor laws--no doubt bowing to the communist mentality that still lingers there. The laws, among other things, requires "that employers must submit proposed workplace rules or changes concerning pay, work allotment, hours, insurance, safety and holidays to the workers' congress for discussion." In other words, companies all over the country will be forced to swap flexibility for stability. Costs could (and probably will) also rise. Naturally, some businessmen are getting concerned.

No one seriously expected that China would throw off all its communist roots. Like the US and the countries of Europe, China would transform into a mixed economy. But if there was any question if China would be more like the US, as a freer market, or Europe, as a more restrictive one, this latest development suggests it's leaning towards the Continent.