China's labour arbitrage is changing dramatically

China is modernizing its Labour market

At the beginning of 2008, China passed a new law protecting the workers.
Companies have to pay benefits for individual subcontractors who are working for the same contractor year after year and pay severance if they want to get rid of them.
Hence the cost advantage of subcontracting to an army of low paid workers is over. Over is the flexibility.

This law is pushing big chinese companies to optimize their practices. It will trigger a wave of outsourcing of tasks to professional outsourcers.
It is a plus for low paid chinese workers…and it is triggering a profound modernization of the chinese economy with the emergence of a modern offer of professional services.