Chinese outsourcing regulations tightened

China's recruitment agencies that help labourers work overseas will have to set up a security fund of at least three million yuan (R3.9 million) for possible evacuation and compensation during emergencies or if contracts fail, according to a new regulation, China Daily reports.

A regulation meant to standardise overseas labour outsourcing, published on Monday, requires recruitment agencies to set up a separate bank account with at least three million yuan to evacuate employees during emergencies or to compensate workers when the agencies fail to carry out their obligations.

People's Daily Online writes that the regulation, designed to clean up the business of outsourcing labourers, also requires recruitment companies to have at least six million yuan in registered capital, a threshold much higher than the standard for other companies and one that may prevent half of current businesses from being authorised to operate, analysts said.

"Not only companies go out for business, workers also do, so it is necessary to protect their rights from being infringed upon," said Yin Guangjun, VP of the Cangzhou sub-council of the China Council for Promotion of International Trade.