A new labor law went into effect on January 1 this year. Law firm Harris and Moure's Steve Dickinson has done extensive blogging about the new law. In this episode, Mr. Dickinson gives us the low-down on the law and its effects on business.

Listen to our discussion on the Labor Law

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Executive summary

The law was a government response to increasing public concern that employers were mistreating employees, especially in failure to pay proper wages. The Shanxi slavery scandal was a example of the sorry state of employee rights in China that brought the issue to the forefront of the public's mind.

The law has several components, but the main effects are the requirement that employees have formal term contracts, and that employees can only be terminated with cause. This is the polar opposite of termination at will in the United States.

After two term contracts, the employee must be given an open-ended contract. Combined with termination only with cause, it is comparable to the tenure system in American universities. Critics are calling it a return to the iron rice bowl, when companies were responsible for employees their whole lives.

There has been a tremendous amount of publicity about the law, resulting in widespread general awareness, though the public's understanding is not always accurate. The media coverage seems to be driven by the inherent attractiveness of a story that affects everyone, rather than a government propaganda initiative.

Companies need to beware, as ambitious lawyers are actively looking to make money and a career testing the new law.

China wants to design its own iPods instead of just putting them together.

In this episode your Danwei correspondents talk about China's goal of "indigenous innovation".

China is following two paths of innovation: State-driven innovation, such as the space program and military modernization, and private sector innovation, such as semiconductors and pharmaceuticals.

Maya Alexandri talks with Robert Ness about the implications of these two types of innovation to China's economic and foreign policy goals, as well as the institutions needed to support these kinds of innovation.

Listen to our discussion on "Indigenous Innovation" in China.

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Following on the theme initiated at Danwei's First Plenary Session, this podcast interview looks at marketing communications in China and how one Beijing-based boutique design firm fits into the agency landscape.

Mauro Marescialli is an occasional contributor to Danwei, and managing director of Standards Group. He talks about the growth of niche communications and marketing companies in China, and how they compete with the big agencies.

Listen to the interview.

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The National Development and Reform Commission of the Chinese government releases an annual "Catalog for the Guidance of Foreign Invested Enterprises".

Steve Dickinson is a Shanghai-based attorney at the law firm Harris & Moure and coauthor of China Law Blog. He has blogged extensively on the catalog (sometimes called the Foreign Direct Investment or FDI catalog) and has advised numerous clients on its content.

In this episode, Steve explains several key points foreign investors need to know, including restrictions on foreign investments in real estate, media and market research.

Listen to our interview with Steve Dickinson on China's FDI catalog

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IPR issues in China are often discussed in terms of politics, focusing on why China's IPR laws are not enforced. Less often does the discussion steer to what companies should actually do in practice while operating in such an IPR environment.

Maya Alexandri, who writes for Danwei on IPR issues and teaches IPR as a visiting professor at Tsinghua University, talks briefly about IPR-related policies at foreign companies coming into China. She then shares lessons from her experience litigating Educational Testing Service's case against China's well known test prep company, New Oriental.

Listen to Maya Alexandri on IPR in China

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In this episode we explore China's version of "technonationalism", a term used to refer to technological development as a government policy. David argues that although China has so far only focused on becoming independent of foreign technology, several opportunities to be a world leader in certain areas of technological innovation are staring it right in the face.

Listen to our interview with David Wolf on technology policy in China.

Listen to Meijob's Barak Paztal.

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From Responsible China:

Caroline Campbell first fell in love with nature while growing up on a pig farm in rural England. Since then, she has traveled the world, telling stories about the importance of the environment, climate change and sustainability. Originally trained as a zoologist at the University of Edinburgh, Campbell became fascinated by the power of media. As a self-taught journalist and producer, she began her career by working for the BBC, for which she still produces radio features. Her first film for the BBC, “Global Dimming,” won the prestigious Wildscreen Planet Earth award and was requested to be viewed privately by the British Parliament “to expose a misunderstood aspect of the climate change debate,” she says. Campbell also worked as associate producer with the Sea Studios Foundation, in cooperation with National Geographic, on the production of “Strange Days on Planet Earth,” hosted by Edward Norton.

Listen to this Interview with Caroline Campbell

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Last time your correspondent's Mac was parked at the service center, I had to spend a week at a local internet cafe. When one reads about 网瘾 (Net addiction) in the Chinese press, you often feel the problem is being exaggerated. But when an early bird like me gets to the cafe at 5:30 and sees grown men glued to the screens, smoking frenetically, and cursing into their headsets, he realizes that these guys didn't just get here.

Chinese parents are caught behind a rock and a hard place; either forbid their to play Internet games, which means indirectly restricting their access to valuable educational tools and impeding their information age education (or even worse encouraging them to sneak of to seedy internet cafes), or risk their child getting addicted to battling scantily clad elven vixens or fragging terrorists with assault rifles.

Bill Bishop has the solution. 宝宝蹦蹦 is a "green game"--no sex, violence or anything not fit for a nine year old. Players control cute animal avatars that move around the virtual world playing games that help them memorize English vocabulary, Tang poetry, and Olympic trivia. As founder of CBS Market Watch, Bill's online media track record is a strength for Red Mushroom. However, the virtual world faces many challenges, most importantly getting buy-in from both children AND parents.

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Watch this video for a preview of Baobaobengbeng.

In the West, economists talk about CPI and other economic indicators. In China, when inflation rears its ugly face, the pundits talk about the price of pork and eggs--the first things sacrificed when budgets get tight.

Shaun Rein, managing director of China Market Research Group (CMR), shares his insights on recent inflation in China and its effect on the consumer.

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Your correspondent had a business textbook in university that illustrated, with neat little box diagrams, the cultural differences in economic behavior between East and West, specifically that Americans buy everything on credit while Asians stow all their money in low interest bank accounts like pack rats.

Analysts still harp about Asian resistance to consumer credit, often using Confucian clichés such as in a 2006 article in Marketplace by Bloomberg:

China's frugal mentality dates back 25 centuries to the philosopher Confucius, who said: "He who will not economize will have to agonize."

Danwei guest contributer Shaun Rein makes this point with credit cards, arguing that Chinese, especially Chinese youth, have a growing demand for consumer credit as their salaries rise along with their choices in where to spend.

Obstacles still persist, however. Most of China's banks ignore consumer credit as they focus on lending money to state-owned institutions who then pour the money into an overheated stock market. China also lacks the West's mechanisms for credit checks, which means stiflingly low credit limits.

Nonetheless, the future is bright for consumer credit in China.

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As Chinahr.com's annoying superman job seeker commercial circulates on Focus Media screens and subway station walls, we are reminded of the proliferation of job sites that has occurred in the last year or so. Is it a bubble? There is certainly no shortage of job seekers, nor companies looking for talent. But from a job seeker's perspective, whenever one has to decide which of a countless number of job sites to use, it certainly seems like the market is saturated.

Maneck Mohan is the founder of Recruit.net, a jobs site targeting Australia and Asia. He gives insight into the business side of the jobs board and jobs search space, within the contexts of China and greater Asia.

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Orit Gadiesh, chairwoman at Bain and Company, published an article in Forbes.com arguing that multinational brewing companies should to produce light beer versions of their international products at low cost, with quality just good enough to compete with domestic companies to capture the growing middle class market. Many analysts echo this argument.

In this episode Shaun Rein tells you why you should listen to him.

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Asian mobile and Internet culture can be strange and confusing. You may have been mystified when you saw the Japanese lead in TV series Babel use sign language with mobile video, or if read about how throngs of young girls in Korea obsess over star video gamers. The fact that there are more mobile phone users in China than the US has people can be mind boggling.

In this interview, Benjamin Joffe demystifies Asian markets. Joffe's consultancy is focused on showing clients how business models adapted from diverse markets can be localized and applied elsewhere, even in different cultural and economic conditions.

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Benjamin Joffe is also founder of Mobile Monday Beijing, which has its next event coming up on October 22nd, 2007.

In this special edition Danwei FM episode, guest contributer Erica Schlaikjer interviews Conrad Clark, director of Soul Carriage, which debuted September 25th.

Soul Carriage, a literal translation of the Chinese word for hearse, or lingche tells the story of a migrant worker from a construction company in Shanghai who must return the body of his dead friend back to his family in the countryside of Zhejiang province. However, the "main character" of the film, according to Clark, is the physical environment of China, which is undergoing massive urbanization and transformation while struggling to achieve sustainability, serving as a metaphor for the psychological dilemma of millions of Chinese people, especially migrant workers, who are searching for either spiritual or material fulfillment.

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Watch the trailer for Soul Carriage

Editor's note: audio link has been corrected