Also, it prohibits a union membership requirement for hiring, and promotes wage increases based on productivity rather than seniority. At the same time, the approved legislation reduces wage compensation after labor disputes. Greater ease in hiring and dismissal is expected to increase formal employment, which is typically more productive than informal work.
In a broader perspective, the Chinese economy has been growing at a fast speed since the beginning of reform and opening up, but its competitiveness has unfortunately not recorded the same impressive improvement.