The Ministry of Commerce and the State Administration of Industry and Commerce yesterday published an administrative regulation governing organizations that export labor. The regulation, which will go into effect in 30 days, sets more stringent conditions for companies dealing in the business of providing workers abroad.

The regulation requires such businesses to have a minimum registered capital of 5 million yuan (US$604,000). Its debt/asset ratio should not be greater than 50 percent and the company must have fixed office space of at least 300 square meters.

The company must also obtain ISO9000 certification, authentication for management and employ at least five professionals, including those responsible for training and legal affairs.

The old regulation focused more on registered capital and trade volume.

Companies that are already operating have one year to comply with the new requirements.

The Ministry of Commerce will administer warnings and assess monetary penalties for companies that violate the regulation. Serious infractions may lead to the criminal courts.

The ministry will also regularly publish a list of companies that violate the regulation.

Li Wei, of the University of International Business and Economics, said the stricter regulations should improve safety and management in the labor export industry, particularly in light of the recent security concerns about workers abroad. In the past two months, 14 Chinese workers have been killed and 13 injured in terrorist attacks.

There are now about 1,400 Chinese firms licensed to contract and export labor abroad.

After two decades of development, China’s labor export industry has expanded to more than 180 countries and China has become one of the world’s top 10 countries for overseas contracts.

The China International Contractors' Association indicates that there are more than 500,000 laborers working abroad. They are employed in industries ranging from construction and transport to domestic help, medical services, mining and textiles.

In China, there are two main legal avenues for exporting labor. The first is project based, a hangover from aid projects in the 1970s, when state-owned companies would send workers to other developing countries. The second channel is via companies specializing in sending people abroad for work, usually in construction but also in areas such as manufacturing and agriculture.

The chief destinations are East and Southeast Asia, North Africa, North America, the Persian Gulf and Europe, Li said.

(China Daily August 3, 2004)