Abstract

Against the convergence of multiple crises—including slowing global economic growth and intensifying geopolitical rivalry—the global labour market is undergoing profound structural transformation in 2025. For Chinese enterprises accelerating their global expansion, labour compliance has evolved from a discrete human-resources issue into a core strategic variable that determines the survival and sustainable development of multinational enterprises. Based on the state of cross-border labour compliance among Chinese enterprises in 2025, this Report focuses on the most significant legal developments across regions from 2024 through early 2026 and provides an in-depth analysis of the latest legal evolution in core labour matters, including employment contracts, remuneration and benefits, and occupational safety.

In Asia, ASEAN jurisdictions are moving towards more granular labour protection and reduced labour-market flexibility, as exemplified by Indonesia’s constitutional-review Decision No. 168 and Vietnam’s Decree No. 219. At the same time, the mandatory human rights and environmental due diligence (mHREDD) initiatives led by South Korea and Thailand signal a comprehensive upgrading of Asia’s ESG regulatory framework and impose extraterritorial, supply-chain-penetrating compliance requirements on Chinese cross-border supply chains. In the Middle East, Saudi Arabia and the United Arab Emirates have substantially amended their labour laws to align with economic diversification and Vision 2030, materially raising employee-benefit standards and anti-discrimination thresholds while significantly strengthening judicial sanctions in employment disputes and extending limitation periods for employment claims.

In the European Union, the adoption of “Omnibus I” marks a major shift in the governance of labour compliance in European supply chains, while further implementation of the Pay Transparency Directive has created more urgent requirements for corporate remuneration systems. In the United States, labour-compliance laws and regulations have swung markedly amid a change of administration and an ideological shift, increasing uncertainty in enterprises’ labour-compliance risk exposure. By contrast, the United Kingdom, Australia, Canada and various South American countries have further strengthened labour-rights protection, requiring relevant enterprises to enhance their compliance capabilities and standards.

In Africa, the Democratic Republic of the Congo’s mandatory requirement that mining enterprises allocate a 5% equity interest to local employees typifies the movement of labour rights in resource-rich states into the deeper waters of asset distribution and participation in governance. Wage and strike legislation in Nigeria and Morocco is further increasing the hidden friction costs borne by manufacturing and infrastructure projects.

Drawing on macroeconomic data, international organisations’ assessments of emerging trends, and leading judicial decisions, this Report develops labour-compliance risk profiles by key industry. It aims to provide Chinese multinational enterprises with forward-looking, systematic and actionable strategic guidance on labour compliance, thereby helping them achieve sustainable human-capital governance amid a volatile and rapidly changing global environment.

ⅠGlobal Macroeconomic Labour-Market Trends and the Context of Chinese Enterprises’ Overseas Expansion

1. Global Employment Trends and Structure

According to the International Labour Organization’s (ILO) *World Employment and Social Outlook: Trends 2025^[1],the global labour market is facing an unprecedented test of its resilience. Although the global unemployment rate remained at the relatively low level of 4.9% in 2024, and the global jobs gap narrowed significantly from 16% in 2004 to 9% in 2024, structural imbalances beneath this apparently favourable picture are intensifying.

Labour-market vulnerability is chiefly reflected in three core dimensions. First, youth unemployment is particularly acute. The data show unemployment rates of 12.4% among young men and 12.3% among young women worldwide. In low-income countries, nearly 45 million young people are not in employment, education or training (NEET), while youth unemployment in middle- and high-income countries is as high as 16%. Second, following a brief post-COVID-19 rebound, global labour-productivity growth has returned to its long-term downward trajectory and now stands 0.5 percentage points below its long-term pre-pandemic average. Finally, with informal employment and working poverty becoming normalised, the gains from labour-market recovery have not been effectively translated into progress towards the United Nations Sustainable Development Goals (SDGs).

Against a highly uncertain economic and social outlook, geopolitical tensions, rising climate-change costs and unresolved sovereign-debt risks continue to test the limits of national labour markets. For multinational enterprises relocating industries and deploying production capacity globally, this means that securing a skilled, highly productive and cost-competitive workforce in target host countries is becoming increasingly difficult. Low-income countries are not only making slow progress in creating decent work; their widening gender employment gaps are also further constraining the elasticity of labour supply.

2. The Shift in the Focus of China’s Belt and Road Investment and the Current State of Overseas Labour Deployment

Against the backdrop of a deep adjustment in the global economic cycle and a reshaping of geopolitical and trade patterns, Chinese enterprises’ overseas expansion is characterised by simultaneous growth in scale and optimisation of structure. Authoritative investment reports indicate that China’s investment and construction engagement under the Belt and Road Initiative (BRI)[^2] reached a record high in 2024:^[2]contracted construction-project value amounted to USD 70.7 billion, while non-financial outward direct investment was approximately USD 51 billion. From the launch of the Initiative in 2013 through the end of 2024, cumulative BRI engagement reached USD 1.175 trillion across 150 countries that had signed cooperation agreements.

Material changes in the structure and geographic distribution of investment have directly reshaped the labour-compliance risk exposure of Chinese enterprises operating overseas. In 2024, the Middle East became the largest recipient region for BRI financing and projects, with engagement totalling USD 39 billion and concentrated primarily in oil and gas processing facilities and new-energy projects. Investment in Latin America, by contrast, fell to its lowest level in nearly a decade. At the same time, investment in mining and critical metals reached a new high of nearly USD 22 billion, while technology and manufacturing exceeded USD 30 billion, including batteries, photovoltaics and high-tech manufacturing.

Alongside this large-scale outward flow of capital, the number of Chinese workers deployed overseas remained high. Statistics from China’s Ministry of Commerce show that, in January and February 2024 alone, 60,000 persons were newly dispatched abroad under various labour-service arrangements, an increase of 16,000 year on year. By the end of February 2024, a total of 539,000 such workers were employed overseas.^[3]In practice, however, the number of Chinese workers participating in overseas projects may be substantially higher because of complex chains of cross-border project subcontracting and labour dispatch. Research by certain non-governmental organisations suggests that, on some major infrastructure projects in Southeast Asian countries, a substantial number of individuals perform work while holding business or tourist visas.^[4]According to those sources, where localised management is inadequate, large-scale and labour-intensive overseas projects of this kind can readily give rise in the host country to serious employment disputes arising from cultural conflict, visa non-compliance, wage arrears and occupational injuries. They therefore constitute a frequent, concealed and high-cost source of compliance risk for enterprises operating overseas.

 II. Key Labour-Compliance Developments and In-Depth Analysis of Major Asian Jurisdictions

Asia, and the Association of Southeast Asian Nations (ASEAN) in particular, is a principal destination for the relocation of Chinese manufacturing, supply-chain restructuring and the expansion of the digital economy. In 2025, the underlying logic of labour-law regimes in the region is undergoing profound change: the former singular priority of attracting investment is giving way to a model that accords equal importance to labour protection, employment localisation and industrial upgrading.

1. Vietnam: Market Entry and the Administration of Foreign Workers under the New Law on Investment

As one of the principal destinations for many multinational enterprises’ “China+1” strategies, Vietnam experienced a dense series of legal updates with structural implications in 2025 and 2026. The new Law on Investment 2025 (Law No. 143/2025/QH15), adopted by Vietnam’s National Assembly in December 2025 and effective from 1 March 2026, fundamentally changed the traditional foreign-investment entry process. It permits a foreign investor to obtain an Enterprise Registration Certificate (ERC) and establish a legal entity before obtaining an Investment Registration Certificate (IRC). This major reform substantially shortens the market-entry period for such preliminary activities as leasing office premises and recruiting key local personnel. Ambiguity nevertheless remains at the implementation level: if an enterprise fails to obtain an IRC within 12 months after the ERC is issued—for example, because project approval is refused—the mechanism for winding up the enterprise and disposing of invested capital remains unclear. Chinese-invested enterprises must therefore include strict conditions precedent and exit-protection clauses in their initial employment contracts and executive appointment agreements in order to mitigate the risk of termination compensation arising from regulatory uncertainty.[^5]^[5]

With respect to the administration of foreign workers, and in order to balance the attraction of highly skilled talent against the protection of local employment, the Vietnamese Government urgently promulgated Decree No. 219/2025/ND-CP on 7 August 2025, with immediate effect. Replacing Decree No. 152/2020/ND-CP and Decree No. 70/2023/ND-CP, the new Decree systematically revised the work-permit regime.^[6]It reflects a regulatory approach that combines facilitation with stricter controls.

Regulatory dimension	Principal points under Decrees152/70Nos. 152/2020	Principal points under Decrees219Key changes2025under Decree No. 219/2025 (new rules)	Compliance implications and response strategies for Chinese enterprises operating overseas
Permit application process	Employers were required to complete three lengthy and separate steps: publication of a recruitment notice to demonstrate that no local worker was qualified; approval of the demand for foreign workers; and the work-permit application.	Recruitment-advertisement requirements have been substantially reduced. Approval of the demand for foreign workers and the work-permit application have been consolidated, except for certain contracts for the provision of services. The semi-annual report on the use of foreign workers has been abolished.	Consolidation of the process significantly shortens the time required to deploy expatriate personnel lawfully. Enterprises must nevertheless ensure that their consolidated submissions are internally rigorous and consistent, so that the application is not rejected in its entirety because the job description does not correspond to the applicant’s qualifications.
Qualification thresholds for experts and technical workers	An expert required a bachelor’s degree and three years of experience; a technical worker required five years of experience.	The expert threshold has been reduced to a bachelor’s degree and two years of experience—or only one year in priority sectors such as technology and finance. The technical-worker threshold has been reduced to three years of experience, or two years of experience plus evidence of one year’s training.	These changes substantially facilitate the large-scale deployment of junior and mid-level technical personnel by Chinese manufacturers establishing factories in Vietnam. Enterprises should coordinate in advance in China to prepare the relevant personnel’s social-insurance contribution records and evidence of internal training qualifications.
Qualifications foranExecutive Director	Requirements were comparatively flexible and could often be satisfied by evidence of an intra-group transfer.	Requirements have been materially tightened: the individual must have at least three years of relevant experience in the proposed position, and that experience must have been acquired “within Vietnam”.	Chinese enterprises face a significant challenge when appointing the person ultimately in charge of a Vietnamese subsidiary. They may need to rely more extensively on exemptions for intra-corporate transferees or recruit internationally experienced personnel with local management experience in Vietnam.
Short-term business travel and renewal of exemptions	Procedures for short-term exemptions were cumbersome and unclear; the number of renewals was limited and the process difficult.	A person spending fewer than 90 days in Vietnam in aggregate per year is fully exempt from the work-permit requirement, irrespective of the number of entries. An exemption certificate may be extended once, for up to two years, if the application is made between 45 and 10 days before expiry.	Compliance risk is substantially reduced for Chinese engineers, installation and commissioning personnel, and after-sales service staff who travel frequently across borders. Corporate HR departments must nevertheless maintain rigorous internal immigration ledgers that accurately track each employee against the 90-day threshold.

Vietnam maintains an extremely stringent approach to unauthorised work. Under the applicable regulations, an enterprise that unlawfully employs a foreign worker without a work permit may not only face a fine of up to VND 75 million (approximately USD 3,000); the employee concerned may also be deported, materially damaging the enterprise’s reputation and its future visa quota.^[7]

2. India: Full Implementation of the Four Labour Codes and the Restructuring of the Compliance Framework

India—the world’s most populous country and a state actively pursuing manufacturing upgrades and supply-chain substitution—undertook the largest labour-law reform since independence in 2025. On 21 November 2025, the Government formally brought the four Labour Codes fully into effect: the *Code on Wages*, the *Industrial Relations Code*, the *Code on Social Security*, and the *Occupational Safety, Health and Working Conditions Code*. This historic measure comprehensively consolidated and repealed 29 previously fragmented and outdated central labour statutes.

For Chinese manufacturing enterprises investing in and establishing factories in India, infrastructure contractors and digital-economy platforms, implementation of the Codes has far-reaching compliance implications:

1. Employment contracts. The new Indian Codes prescribe clearer rules on appointment letters, fixed-term employment, social-security coverage and limits on working time. Enterprises can therefore no longer rely on oral arrangements, abbreviated offer letters or uniform cross-border templates in place of local employment contracts. For manufacturing operations, engineering contractors, IT outsourcing businesses and shared-service centres commonly operated by Chinese enterprises, the most likely problem is a lack of clarity in distinguishing employment relationships from service and contracting relationships, which may result in retroactive contribution liabilities, occupational-injury liability or termination disputes.
2. Substantial increase in the cost of fixed-term employees (FTEs). The new rules grant fixed-term employees the same remuneration, leave and social-security entitlements as permanent employees. Most importantly, the continuous-service threshold for a fixed-term employee to qualify for statutory gratuity has been reduced substantially from five years to only one year. This not only disrupts the former practice of frequently rotating short-term workers to reduce benefit costs, but also materially increases long-term labour costs for infrastructure and manufacturing projects.
3. Removal of restrictions on women’s employment and supporting compliance measures. One important trend in India in 2025 was the continued increase in women’s labour-force participation, although women-friendly institutional arrangements remained inadequate in some settings. Official data indicate that the female labour force participation rate (LFPR) increased from 3% in 2017–18 to 41.7% in 2023–24, while the female worker population ratio (WPR) increased from 22% to 40.3%, demonstrating a markedly accelerated entry of women into the labour market.[8]To unlock this labour-force dividend, the new Codes removed many former restrictions on women’s employment, expressly permitting women to work night shifts where they consent and the statutory safety safeguards are in place. Chinese-invested factories must accordingly make substantive upgrades to their security systems and establish mandatory women’s grievance and dispute-resolution committees to mitigate workplace-harassment risk.
4. Social security and platform work.India continued to expand its social-security system in 2025. Official information states that social-security coverage has reached 3%, encompassing approximately 940 million people. This means that compliance obligations relating to pensions, healthcare, occupational injuries, housing and other statutory benefits continue to increase, while higher standards apply to the classification and administration of permanent employees, contract workers, dispatched workers and platform workers.[9]

For Chinese enterprises, platform work, flexible work and outsourced or dispatched labour models are not inherently low-risk. On the contrary, in the Indian context, if an enterprise exercises direction and control over workers, administers their attendance and performance, and arranges their work in a manner approaching employee management, yet continues to classify them as independent contractors, it may face recharacterisation for purposes of social security, dismissal and liability.

India’s labour market in 2025 was characterised by overall improvement coupled with structural divergence. Unemployment fell and the female LFPR increased substantially, while social-security coverage also rose. These developments show that labour compliance is shifting from the administration of employment alone to the administration of social security and benefits for a broader range of groups. Chinese-invested enterprises must dynamically monitor the implementation of the Codes and establish a classification-based compliance framework.

3. Indonesia: Constitutional-Review Decision No.168and Minimum-Wage Adjustments

Indonesia is not only Southeast Asia’s largest economy; it is also a major destination for Chinese investment in mineral processing, new-energy batteries—including the Indonesia Morowali Industrial Park (IMIP)—infrastructure and the digital economy. From late 2024 through 2025, Indonesian labour law experienced its most significant regulatory reversal and pressure for institutional restructuring since the enactment of the Omnibus Law on Job Creation.

Since the Omnibus Law was implemented in 2020, Indonesia’s labour market has undergone a highly “flexibilising” reform. The uncontrolled expansion of outsourcing and widespread misuse of fixed-term contracts (perjanjian kerja waktu tertentu, PKWT) triggered strong protests by trade unions nationwide. On 31 October 2024, Indonesia’s Constitutional Court issued the institutionally pivotal Decision No. 168/PUU-XXI/2023 (Decision No. 168).[10]The Decision partially upheld the constitutional-review petition brought by a coalition of trade unions. It directed the legislature, within two years, to separate the substantive provisions of the Manpower Law (Law No. 13 of 2003) from the Job Creation Law and to enact a new Manpower Law in order to resolve legal conflict and injustice. Decision No. 168 has had a profound and systemic impact on Chinese-invested enterprises operating in Indonesia. Its core rationale is to rebalance capital efficiency against workers’ right to subsistence, as reflected in the following five key dimensions[11]：

1. A mandatory temporal limit on fixed-term contracts (PKWT). The Decision expressly clarified that, whether based on a specified period or completion of specified work, a fixed-term employment agreement may not have an aggregate term exceeding five years, inclusive of every form of extension. This closes the compliance loophole through which enterprises formerly avoided statutory severance pay for long-term employees by repeatedly entering into new short-term contracts.
2. Reinstatement of sectoral minimum wages.The Decision not only restored sectoral minimum-wage standards abolished by the Omnibus Law, but also required the state to substantively incorporate the decent-living-needs index (kebutuhan hidup layak, KHL) into the minimum-wage formula. It removed the central Government’s unilateral decision-making power and mandated substantive participation by regional wage councils in policymaking. This reinstatement means that certain highly profitable, capital-intensive industries—such as mineral processing and advanced manufacturing—may be compelled to bear base-wage costs significantly above the regional average.
3. Comprehensive judicialisation of termination procedures.If an employee rejects a notice of termination, the employer and employee must conduct bipartite negotiations. If those negotiations fail, the employer may not, in principle, effect termination by unilateral notice; dismissal may be implemented only after the Industrial Relations Court has issued a legally binding determination. This requirement materially increases the time and adverse-outcome risk associated with unilateral termination, creating substantial judicial obstacles to performance-based elimination mechanisms.
4. Renewed restrictions on outsourcing.The Decision requires the relevant ministries to redefine strictly the specific categories of work and sectors in which outsourcing is permitted. It seeks to end the previously near-unlimited outsourcing of core positions and requires enterprises to convert long-term core positions into permanent employment.
5. Priority for local workers in the use of foreign labour.In response to public concern over the introduction of unskilled foreign workers, the Decision reiterates that an employer introducing foreign labour must demonstrate that the individuals possess the requisite capabilities and must accord absolute priority to the employment of Indonesian workers.

In terms of the direct impact on remuneration systems, President Prabowo announced an average nationwide minimum-wage increase of 6.5% for 2025. The increase did not, however, satisfy trade unions. Major trade-union confederations, including the Confederation of Indonesian Trade Unions (KSPI), contended that the adjustment index prescribed by the new Government regulation—ranging from 0.5 to 0.9—did not accurately reflect inflationary pressure. This led to continuing large-scale protests and strikes in Jakarta, West Java, Aceh and elsewhere from late 2025 into early 2026, with unions demanding real wage increases of 8%–10%.^[12]

2025Overview of minimum-wageUMPadjustments in selected Indonesian provinces	2024rate (IDR/ Rp)）	2025rate (IDR/ Rp)）	Industry profile and risk note for Chinese enterprises operating overseas
DKI Jakarta	5,067,381	5,396,760	Location of regional headquarters for multinational enterprises; the benchmark for white-collar salaries has risen across the board.
West Java	2,057,495	2,191,232	A major centre of traditional labour-intensive manufacturing, including textiles, footwear and apparel, and electronics assembly; an area of frequent strikes in which enterprise profit margins are constrained.
Central Sulawesi	3,000,000+	3,179,565	A major centre for nickel mining and stainless-steel processing, including the IMIP site; labour costs will rise materially in conjunction with the reinstatement of sectoral minimum wages.
East Kalimantan	3,360,858	3,579,313	An area of new-capital construction and resource extraction, facing shortages of skilled construction and technical workers.

In the digital-platform economy, research reports indicate that Indonesia still lacks a legal framework recognising platform work—such as ride-hailing and food-delivery courier services—as a form of employment.^[13]Platform companies avoid employer obligations relating to minimum wages, social security and dismissal protection by defining workers as “partners” (*mitra*). In 2025, the workers’ actual earnings and living standards continued to deteriorate in the absence of statutory protection. As the Government’s willingness to regulate increases, this legal blind spot faces a very high risk of policy intervention. Chinese technology enterprises participating in overseas digital-platform markets must plan in advance for the transformation of their labour models.

4. The Trend towards MandatoryESGESG and Supply-Chain Human Rights Due DiligencemHREDD(mHREDD) in Asia

Asian enterprises have long played the role of passive recipients within environmental, social and governance (ESG) and global human-rights compliance systems. Influenced, however, by the ripple effects of the European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), the United States’ Uyghur Forced Labor Prevention Act (UFLPA), and the German Supply Chain Due Diligence Act, Asian countries are accelerating the development of localised human rights due diligence (HRDD) frameworks.^[14]In 2025, East and Southeast Asian countries led by South Korea and Thailand were advancing mandatory human rights and environmental due diligence (mHREDD) legislation, marking the transmission of compliance pressure within the region.

In South Korea, Bill No. 2210837—the proposed Act on Human Rights and Environmental Protection for Sustainable Business Management—was resubmitted to the National Assembly in 2025 and attracted considerable attention. If enacted, the Bill will apply to medium-sized and large enterprises with more than 500 employees or sales exceeding KRW 200 billion (approximately USD 144 million) in the preceding financial year. It will cover both domestic enterprises headquartered in South Korea and foreign enterprises with an establishment in South Korea.^[15]The Bill is stringent in its supply-chain-penetrating compliance requirements. An enterprise must not only establish an annual due-diligence implementation plan overseen by a dedicated board committee, create a grievance mechanism to identify and mitigate adverse human-rights and environmental impacts, and publish a public due-diligence report; the Bill would also establish a dedicated Human Rights and Environment Business Committee empowered to issue corrective orders. Enterprises in breach could face not only substantial fines and exclusion from public-procurement tenders, but also criminal imprisonment and civil liability in damages.

Thailand is likewise accelerating the drafting of mandatory due-diligence legislation covering human rights and the environment throughout supply chains. Public consultation on the Bill was completed in 2025, and it was submitted to the Ministry of Justice for consideration. It is intended to ensure that enterprises operating in Thailand proactively identify, prevent and address human-rights risks in their operations and supply chains. The draft requires enterprises within its scope to submit a detailed due-diligence report to the regulatory commission within 180 days after the end of the financial year, disclose that report to the public, and retain the relevant records for at least ten years.^[16]

The South Korean and Thai legislation has a strongly extraterritorial character and a considerable capacity to penetrate supply chains. Large numbers of Chinese manufacturers are first- or second-tier suppliers to dominant South Korean enterprises such as Samsung, Hyundai and SK, or processing enterprises using Thailand as a base for entrepôt trade. Even if they do not maintain a substantive headquarters in those countries, they will be drawn indirectly into the lead enterprise’s human-rights due-diligence chain. In light also of the global interdiction of goods suspected of having been produced with forced labour through Withhold Release Orders (WROs) issued by United States Customs and Border Protection (CBP),^[17]Chinese enterprises operating overseas must abandon the outdated view that ESG is merely corporate public-relations language. They must conduct substantive and comprehensive supply-chain reviews covering working time, non-discrimination, occupational safety and living wages. Supplier codes of conduct, remediation periods, contractual termination rights, grievance mechanisms and remedial procedures should also be incorporated into procurement contracts and long-term supply agreements.

 III. Key Labour-Compliance Developments and In-Depth Analysis of Major Middle Eastern Jurisdictions

Driven by a macroeconomic strategy of moving away from dependence on a single oil-based economy and towards the digital economy, high-end tourism and high-tech manufacturing, the Middle East—particularly the member states of the Gulf Cooperation Council (GCC)—is undergoing a profound and irreversible restructuring of its labour market. The core policy objective is to create a high-benefit, non-discriminatory working environment that meets the highest international standards, while rigorously advancing workforce nationalisation programmes such as Saudisation and Emiratisation, in order to attract leading global talent and enhance the region’s international standing.

1. Saudi Arabia: The2025Amendments to the Labor Law and Human-Resources Challenges for Infrastructure Projects

To support the hundreds of billions of dollars in mega-infrastructure construction and special-economic-zone development under Vision 2030—including NEOM, Qiddiya and the Red Sea Project—the Saudi Arabian Government formally approved major amendments to the Labor Law of 2005 and its Implementing Regulations on 6 August 2024. The amended law entered into force on 25 February 2025, 180 days after publication.^[18]This systematic 71-page reform is intended to bring Saudi rules into line with international standards and to make the Saudi labour market more attractive and better regulated globally.

For Chinese enterprises operating in Saudi Arabia—particularly engineering, procurement and construction (EPC) contractors and energy and technology enterprises—the new rules have the following direct and far-reaching compliance implications:^[19]

1. Standardisation of contract terms and stricter termination mechanisms.For foreign workers, the 2025 amendments expressly provide that an employment contract with no specified term is deemed by operation of law to be a one-year fixed-term contract, automatically renewable for an equivalent term upon expiry. This amendment reduces the former ambiguity arising from the practice of determining the contractual term by reference to the work-permit period. With respect to termination, the new law differentiates notice periods for indefinite-term contracts: an employer terminating the contract must continue to provide at least 60 days’ written notice, while the notice period for employee-initiated termination is reduced to 30 days. This asymmetrical design gives employees a high degree of mobility while increasing frictional costs for an employer seeking dismissal. Notably, the new law expressly identifies an enterprise’s bankruptcy as a statutory ground for lawful termination for the first time, filling a previous legislative gap. In addition, the period in which an employee may object to disciplinary action has been extended from 15 to 30 days. If the employer fails to respond within 15 days, the employee may apply directly to the Labour Court within the following 30 days.
2. Material extension of probation.Among the provisions comparatively favourable to employer administration, the new law increases the maximum probationary period from 90 to 180 days and permits an employer lawfully to stipulate the full period in the initial employment contract. More specifically, statutory public holidays such as National Day and Founding Day, as well as sick leave, are no longer counted towards the probationary period. This provides a more adequate assessment window for Chinese enterprises recruiting large numbers of cross-border technical personnel and facing integration risk.
3. Substantial enhancement of leave and benefit standards.Saudi Arabia is seeking to reshape its employment environment and its appeal to international talent by modernising its Labour Law. The new law increases paid maternity leave from 10 to 12 weeks. A female employee must take six consecutive weeks after childbirth and may allocate the remaining six weeks at her discretion, beginning no earlier than four weeks before the expected date of delivery. A male employee is entitled to three days’ paid paternity leave within seven days after the birth of a child. A new entitlement of three days’ paid bereavement leave applies upon the death of a sibling. In relation to remuneration and benefits, an employer may, with the employee’s consent, grant paid time off in lieu of overtime pay. Employers are also required to provide compliant housing and transportation allowances, or equivalent cash or in-kind benefits.
4. Strengthened non-discrimination, outsourcing regulation and nationalisation-related training obligations.The new law introduces comprehensive non-discrimination provisions that categorically prohibit any form of differential treatment or preference based on race, colour, sex, age, disability or marital status, both in recruitment and in the performance of day-to-day duties. This not only reflects international human-rights instruments, but may also lead to a substantial increase in future workplace litigation. The law also introduces the concepts of outsourcing and manpower activity for the first time, regulating the provision of workers to third parties through licensed entities in order to combat unlawful labour dispatch. Employers are further required to adopt written training and qualification-upgrading policies to empower the local Saudi workforce in furtherance of Saudisation. Failure to meet the applicable standards may result in severe penalties from the Ministry of Human Resources and Social Development (MHRSD).

At the operational level, Chinese contractors participating in mega-projects such as NEOM and the Red Sea Project face the challenge of extremely high labour intensity. From the project’s inception, enterprises must integrate immigration planning, academic-qualification authentication, accommodation and logistics management into their tender cost models.

2. United Arab Emirates: Extension of the Limitation Period and Optimisation of Dispute-Resolution Mechanisms

As the Middle East’s most open commercial and financial hub, the United Arab Emirates made critical amendments to its Labour Law—Federal Decree-Law No. 33 of 2021 Regarding the Regulation of Employment Relationships—in the second half of 2024 through Federal Decree-Law No. 9 of 2024, effective from 31 August 2024. The institutional spillover effects of these new rules became fully apparent in 2025, materially increasing enterprises’ aggregate compliance costs in dispute management, the resolution of historical liabilities and reviews of employment authorisations.^[20]

In dispute resolution, the material extension of the limitation period represents the most significant concealed-liability hazard. Under Article 54 of the amended Decree-Law, the limitation period in which an employer or employee may bring an employment claim following termination of the employment relationship has been extended from one year to two years. The period is generally calculated from the date on which the employment relationship terminates, although certain pre-existing rights must be assessed under the transitional rules. This change not only disrupts enterprises’ existing models for bad-debt provisioning and estimation of contingent liabilities, but is also expected to generate a wave of employment litigation in 2026. In particular, employees whose end-of-service gratuity—a form of statutory terminal benefit particular to the Middle East—or cash payment in lieu of untaken annual leave was not fully settled during earlier restructurings or rounds of redundancies may rely on the new rules to revive historical claims previously regarded internally as having passed beyond the period of risk.^[21]

In response to the anticipated increase in claims, the UAE Ministry of Human Resources and Emiratisation (MOHRE) has been granted quasi-judicial powers. Where the value of a claim does not exceed AED 50,000 (approximately USD 13,600), MOHRE may issue a final and binding determination directly, while a party dissatisfied with the determination may challenge it before the court of competent jurisdiction within the statutory period.^[22]For claims exceeding that threshold, MOHRE retains a mediation function and refers the matter to the court if mediation fails. Of particular concern, MOHRE may require an employer to continue paying an employee involved in the dispute for up to two months during the dispute-resolution process, preventing a foreign employee from facing destitution because wages have ceased. Penalties for employment violations—including unlawful employment, employment of persons without valid work permits and the fabrication of Emiratisation compliance—have also been increased substantially.^[23]

3. The Impact of Geopolitical Conflict on the Middle East’s Foreign-Labour Supply Chain

The continuing escalation of geopolitical conflicts during 2024 and 2025 must not be overlooked. These conflicts continue to affect labour mobility, project performance and the safety environment for employment across the Middle East and neighbouring regions.

In GCC states, a large foreign workforce from South Asia, Southeast Asia and other regions forms an essential labour base for the construction, services, security, cleaning, manufacturing and infrastructure sectors. The Red Sea shipping crisis and attacks by the Houthi movement in Yemen have sharply increased global shipping and insurance costs. Together with conflict-driven imported inflation, these developments have seriously eroded the real purchasing power of low-paid foreign workers and the value of remittances sent to their home countries. For Chinese general contractors in the Middle East, this means not only greater recruitment difficulty and substantially increased labour-import costs, but also potential risks arising from worker anxiety, strikes and even large-scale unrest. Israel, for example, has enacted specific legislation mandating protection against dismissal for employees forced to be absent from work because they were evacuated during the war.^[24]Labour-management challenges arising from wartime security threats and events of force majeure require enterprises operating overseas to abandon peacetime management assumptions and establish resilient workforce systems that encompass geopolitical risk assessments, comprehensive emergency-evacuation plans and danger-pay policies for armed conflict.

 IV. Key Labour-Compliance Developments and In-Depth Analysis of Major African Jurisdictions

Africa is not only a core source of critical strategic minerals for China—including cobalt, copper and lithium—but also a key region for infrastructure construction under the Belt and Road Initiative. In 2025, labour-compliance issues on the African continent moved well beyond traditional wage-arrears disputes and working-time administration. They entered the core governance domains of confronting the legacy of colonial economies, mandating local employee share ownership under resource nationalism, and taking stringent action against the abuse of unlawful labour.

1. Democratic Republic of the Congo: The5%Employee-Shareholding Requirement under the Mining Code and Human-Rights Protection in Mineral Supply Chains

The Democratic Republic of the Congo (DRC) accounts for approximately 70% of global cobalt production and is one of the world’s most important sources of cobalt, making it indispensable to global electric-vehicle and energy-transition supply chains. Chinese-invested mining enterprises with substantial operations in the country, such as Zijin Mining and CMOC, as well as other multinational mining enterprises, are nevertheless facing unprecedented pressure in relation to legal compliance, ownership restructuring and human-rights scrutiny of their supply chains.

The principal source of this pressure is the DRC Government’s reactivation and mandatory enforcement of resource-nationalism legislation. Under Article 71 bis of the DRC Mining Code, as amended in 2018, and Article 144 bis of the Mining Regulations, every mining company in the country must allocate at least 10% of its share capital to Congolese nationals. Of this amount, 5% must be allocated to Congolese individuals capable of acquiring the shares, while a further 5% must be allocated mandatorily to all employees of the company, either free of charge or through a collective-ownership structure. Compliance is an absolute condition precedent to obtaining or maintaining a mining operating permit. Although these requirements have existed for years, they long remained dormant because of limited employee awareness, the absence of financing mechanisms and a lack of policy incentives, and were even deliberately disregarded by some enterprises.

In January 2026, however, DRC Minister of Mines Louis Watum Kabamba issued an ultimatum requiring every mining company to complete the transfer of the 5% employee shareholding by 31 July 2026. As evidence of compliance, an enterprise must submit to the Ministry of Mines updated articles of association, a register of shareholders and a shareholders’ agreement that comply with the standards of the Organisation for the Harmonisation of Business Law in Africa (OHADA), failing which it will face severe sanctions. The challenges that this mandatory employee-shareholding arrangement poses for Chinese mining enterprises extend beyond traditional labour benefits and community-relations management and directly implicate corporate governance and capital restructuring. The arrangement is not a conventional year-end bonus or a preferential union benefit; it effects an underlying restructuring of dividend rights and board voting rights. Enterprises must bear not only the direct financial cost of equity dilution, but also the complex legal and operational burden of distributing the shares equitably and transparently among thousands of local mine workers through lawful trust mechanisms or collective shareholding platforms. They must at the same time guard against secondary corruption risks arising from appropriation of workers’ interests by locally powerful individuals using nominee structures.

International scrutiny of remuneration and human-rights standards in the DRC’s mining regions is becoming increasingly stringent. In 2025, labour- and human-rights-monitoring organisations including Rights and Accountability in Development (RAID) and the Centre d’Aide Juridico-Judiciaire (CAJJ) published the fourth *Kolwezi Living Wage Report*. Applying a minimum expenditure basket methodology, the Report increased the monthly living-wage benchmark required to provide a basic but decent standard of living for a household comprising two adults and four children in the Kolwezi region to USD 520.^[25]

At the same time, a Ministerial Order concerning foreign workers, which entered into force on an urgent basis on 5 August 2025, expressly provides that, for enterprises engaged in private employment services—that is, employment agencies and labour dispatch—the proportion of foreign workers introduced may not exceed 15% of the total workforce.^[26]This brings to an end the operating model under which Chinese enterprises have long relied on the export of lower-skilled labour from China in order to avoid language barriers and local-training costs.

2. Nigeria and Morocco: The Inflationary Impact of Minimum Wages and Legislation on Strikes

Nigeria, one of Africa’s most important economies and its most populous country, experienced severe structural inflation—reaching 34.8% at the end of 2024—and substantial depreciation of the naira (NGN). In July 2024, President Bola Tinubu signed the National Minimum Wage (Amendment) Act,^[27]establishing a new national minimum wage of NGN 70,000 per month. This rate is the foundational benchmark for remuneration compliance during the new three-year review cycle.

The sharp increase in the minimum wage—although its effect when measured in US dollars may be partly offset by currency depreciation—has produced severe knock-on effects for Chinese enterprises engaged in light manufacturing, building-materials assembly and commercial distribution in Nigeria.^[28]First, it creates a highly disruptive pay-compression effect and a crisis of internal equity. When the wages of entry-level workers are mandatorily increased to NGN 70,000, junior skilled workers or administrative personnel whose starting salary was NGN 75,000 immediately experience a sense of relative deprivation, resulting in declining morale and increased attrition. Second, it creates pressure from the cost of retroactive compliance. Because the Act took retrospective effect from 1 May 2024 but was not signed until July, compliant employers must accurately calculate and pay the shortfall for the intervening period. Finally, it causes a corresponding inflationary effect on statutory deductions. As the applicable base increases, the bases for calculating personal income tax under pay-as-you-earn (PAYE), pension contributions under the Contributory Pension Scheme (CPS), contributions to the National Housing Fund (NHF), and employee compensation contributions to the Nigeria Social Insurance Trust Fund (NSITF) may all require corresponding adjustment. Chinese small and medium-sized enterprises that continue to rely on manual Excel calculations, uniform head-office templates or non-localised payroll systems must promptly upgrade the digital calculation of payroll, personal income tax, social security, benefits and retroactive shortfalls. Otherwise, inconsistencies in data definitions, missing historical records or withholding errors may readily trigger fines and payment-arrears liabilities during labour inspections, tax audits or collective employee claims. As a policy offset and buffer, the newly enacted Nigeria Tax Act 2025 redefines enterprise size. It classifies an enterprise with annual turnover below NGN 100 million and fixed assets not exceeding NGN 250 million as a small enterprise and fully exempts it from companies income tax (CIT), with the aim of providing breathing space for manufacturing and encouraging compliant employment.

In North Africa, Morocco is seeking to enhance its attractiveness as a nearshore manufacturing base for the European Union and as a destination for high-value-added industries through a series of modernising amendments to its labour legislation. Organic Law No. 97-15 governing the exercise of the right to strike, which attracted substantial public attention, entered into force in September 2025 after lengthy tripartite negotiations. Its core objective is to balance the constitutionally protected right to strike against the need to maintain economic order. On the one hand, the Law expands the scope of the right to strike, bringing the growing informal-economy workforce—including domestic workers, independent contractors and non-salaried professionals—within the protection of lawful strike action for the first time. On the other hand, it subjects the exercise of the right to strike by trade unions to a strict cooling-off period and procedural restrictions. In a private-sector dispute, the mandatory negotiation period is compressed to no more than seven days; lawful strike action may be taken only after that period has expired. The Law also strictly prohibits an employer from engaging external replacement workers to undermine lawful industrial action and imposes severe financial penalties on employers that breach the prohibition.^[29]

 V. Labour Compliance Dynamics and In-Depth Analysis in Key European Jurisdictions

1.European Union: ‘Omnibus IOmnibus I’ and the Pay Transparency Directive

In December 2025, the European Union Commission and the European Parliament passed the ‘Omnibus I’ solution, simplifying the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). It significantly eased corporate burdens and signaled a slowdown in EU supply chain regulatory enforcement.

The most notable shift is that ‘Omnibus I’ substantially narrowed the scope of application for both CSRD and CS3D. CSRD application thresholds were adjusted to: EU companies with over 1,000 employees and net annual turnover exceeding EUR 450 million, and non-EU companies whose parent entity generates net annual turnover in the EU exceeding EUR 450 million, with EU subsidiary or branch turnover exceeding EUR 200 million. CS3D thresholds were adjusted to: EU companies with over 5,000 employees and net turnover exceeding EUR 1.5 billion, or non-EU companies generating over EUR 1.5 billion in turnover within the EU.

Regarding the identification and assessment of adverse impacts, enterprises may focus on areas within their chain of activities where actual or potential adverse impacts are most likely to occur. To ensure corporate flexibility, if an enterprise identifies adverse impacts of equal likelihood or severity across multiple areas, it may prioritise assessing impacts involving direct business partners. Furthermore, enterprises should operate based on reasonably available information, mitigating cascading information request burdens on small business partners. ‘Omnibus I’ also eliminated the unified EU civil liability regime, as well as requirements for member states to ensure mandatory priority application of liability rules when applicable law is non-member state law. In summary, ‘Omnibus I’ greatly simplified corporate supply chain compliance obligations under CSRD and CS3D, reflecting significant regulatory concessions to industry.

On the other hand, 2025 served as a critical window for member states to transpose the EU Pay Transparency Directive (Directive (EU) 2023/970) into domestic law and for corporate readiness, with member states like Belgium, the Czech Republic, Germany, and Poland making notable legislative progress. Enterprises operating in the EU must focus on three core compliance pillars: 1) recruitment transparency. Employers must provide pay ranges in job postings or prior to initial interviews and are prohibited from asking applicants about past compensation history; 2) employee right to information. Employees may request data on average pay levels, broken down by gender, for workers performing equal work or work of equal value, and employers cannot enforce ‘pay secrecy’ clauses; 3) gender pay gap reporting. Companies meeting headcount thresholds must report gender pay gaps. If a gap exceeds 5% without objective, gender-neutral justifications, employers must conduct a joint pay assessment with worker representatives. For Chinese enterprises going global, the core challenge lies not in one-time disclosures, but in continuously demonstrating that job classifications, performance evaluations, bonus allocations, promotion opportunities, and allowance standards are built on defensible, gender-neutral foundations.

2.United Kingdom: Enactment of theEmployment RightsAct

The key development in UK labour law in 2025 was the Employment Rights Act promulgated on 18 December 2025. The Act systematically fortifies the UK’s existing employment law framework, markedly increasing regulatory intervention and labour rights protection. Phased implementation across 2026 and 2027 will impose heightened requirements on employment compliance, workforce arrangements, and human resources management.

First, the Act tackles structural imbalances in employment relationships where employers unilaterally enjoy flexibility while workers bear uncertainty. Specific measures include: restricting exploitative zero-hours contracts by introducing rights to guaranteed hours, reasonable shift notice, and compensation for cancelled shifts, alongside extending equivalent rights to agency workers; ending abusive ‘fire and rehire’ and ‘fire and replace’ practices, rendering dismissals for failing to agree to core contract variations automatically unfair unless the business faces severe financial distress with no alternative; reducing the qualifying period for unfair dismissal claims from two years to six months; and strengthening collective redundancy rights.

Second, the Act introduces measures to ensure fair remuneration: strengthening Statutory Sick Pay by removing lower earnings limits and waiting periods; establishing a School Support Staff Negotiating Body to guarantee sector-specific voice and statutory minimum terms across England; creating a Fair Pay Agreement framework in social care; enhancing tipping laws by requiring employer consultation on tip distribution policies to boost transparency and accountability; reintroducing the Two-Tier Code for public sector outsourcing to ensure transferred staff receive comparable terms; and establishing a mandatory Seafarers' Charter to protect maritime working conditions on regular UK routes.

Third, the Act supports family-friendly rights, expanding protections for childcare, caregiving, bereavement, and flexible working: making paternity leave and unpaid parental leave day-one rights; removing restrictions on the sequencing of paternity leave and shared parental leave; introducing new unpaid bereavement leave rights (including for pregnancy loss before 24 weeks); providing enhanced dismissal protections for pregnant employees, mothers on maternity leave, and returnees for six months post-return; and strengthening day-one flexible working request rights by requiring employers to follow clear, reasonable refusal procedures with explicit justifications.

Fourth, the Act promotes workplace equality, fairness, and employee well-being: requiring employers to take 'all reasonable steps' to prevent sexual harassment; prohibiting third-party harassment of employees; empowering regulations to define 'reasonable steps'; strengthening whistleblower protections for reporting sexual harassment; mandating large employers to create gender pay gap and menopause action plans; and voiding non-disclosure agreement (NDA) clauses attempting to prevent workers from disclosing harassment or discrimination.

Fifth, the Act modernises trade union legislation, granting unions expanded freedom to organize, represent, and negotiate: repealing the Strikes (Minimum Service Levels) Act 2023; repealing key sections of the Trade Union Act 2016; extending ballot mandates to 12 months and reducing industrial action notice to 10 days; establishing access frameworks for unions to enter workplaces with Central Arbitration Committee (CAC) enforcement powers; simplifying union recognition procedures; introducing new rights for union reps; mandating employers to inform workers of union membership rights; expanding blacklisting protections; and streamlining industrial action notices.

Finally, regarding enforcement, the Act creates the Fair Work Agency (FWA), responsible for enforcing agency worker rules, national minimum wages, gangmaster licensing, and tackling severe labour exploitation. Endowed with civil penalty powers, information-sharing channels, and authority to bring tribunal claims on behalf of workers, the FWA operates under a tripartite advisory board uniting business, union, and independent experts.

VI. Labour Compliance Dynamics and In-Depth Analysis in Key American and Australian Jurisdictions

1. United States: Drastic Changes and Divergence

In 2025, Donald Trump commenced his second presidential term, with conservative priorities significantly reshaping the US ESG landscape. Concurrently, widening partisan divides and societal ideological polarisation led to heightened regulatory divergence across state lines. Consequently, 'drastic changes and divergence' defined US labour compliance in 2025.

At the federal level, the US Department of Labor and federal agencies pivoted focus from broad worker protections toward easing corporate ‘regulatory burdens’. Anti-DEI executive measures (such as Executive Orders 14151 and 14173) dismantled federal DEI offices and eliminated affirmative action requirements for federal contractors.

Conversely, Democratic-led states reinforced labour compliance and worker rights protections. Minnesota and Illinois enacted pay transparency legislation. Illinois and Vermont passed worker free-speech statutes, prohibiting employers from forcing employees to attend meetings regarding religious, political, or union matters.

Furthermore, artificial intelligence’s impact on employment prompted exploratory regulatory measures. Numerous states enacted ‘bias audit’ mandates for Automated Employment Decision Tools (AEDTs) to prevent adverse impacts on protected groups. However, federal-state friction persists. In late 2025, the Trump administration issued an executive order titled ‘Eliminating State Law Obstruction of National AI Policy’ to establish a unified federal AI policy framework overriding piecemeal state laws, an initiative that remains highly controversial.

In summary, while federal deregulation has eased certain compliance burdens, state-level legal fragmentation renders compliance administration increasingly complex. For Chinese enterprises operating in or exporting to the US, the core challenge lies in constructing layered compliance architectures capable of navigating federal anti-DEI policies alongside state-level pay transparency, union communication limits, and AI recruitment audit mandates.

2.Canada: Amendments to the Canada Labour Code and the Canada Industrial Relations Board Regulations

In June 2025, Canada passed Bill C-58, amending the Canada Labour Code and the Canada Industrial Relations Board Regulations concerning strikes in federally regulated sectors, introducing two key dimensions:

First, it strictly prohibits the use of replacement workers during strikes or lockouts to undermine collective action. Employers cannot utilise self-employed workers, volunteers, students, members of the public, or contractors to perform work of bargaining unit employees, regardless of when contractors were hired. If a bargaining unit engages in a full strike or lockout, employers cannot permit bargaining unit employees to continue working.

In exceptional circumstances—such as preventing threats to public life, health, or safety, or preventing serious destruction, damage, or environmental harm to employer property—employers may utilise replacement workers. However, employers must first offer essential work opportunities to bargaining unit members before deploying replacements. Violating replacement worker prohibitions constitutes an unfair labour practice.

Trade unions or employees may file complaints with the Canada Industrial Relations Board (CIRB), which investigates and issues cease-and-desist orders. Violations constitute offences subject to fines of up to CAD 100,000 per day upon conviction.

Second, the Act refined maintenance of activities processes: employers and unions must reach agreement on essential service maintenance within 15 days of notice to bargain and submit agreements to the CIRB and the Minister of Employment and Social Development. If parties fail to agree within 15 days, they must apply to the CIRB for a determination. The CIRB must resolve matters within 82 days, with expedited powers. Ministerial referral rights regarding public health and safety risks are preserved. Maintenance agreements must be finalised prior to issuing 72-hour strike or lockout notices.

Overall, Canada's 2025 union law revisions strongly favour union freedoms and collective bargaining rights. For Chinese firms operating in federally regulated sectors—such as aviation, rail, ports, telecommunications, banking, and interprovincial transport—compliance focus must extend beyond individual contracts to collective bargaining strategies, strike contingency planning, essential service agreements, contractor boundaries, management deployment rules, and CIRB proceedings.

3.South America

In Argentina, on 6 March 2026, the government promulgated Law No. 27.802 on Labour Modernisation (Ley de Modernización Laboral) in the Official Gazette. The law amends the Employment Contract Law, establishing a new severance system via the Labour Assistance Fund (FAL), into which employers contribute monthly wage percentages. The law seeks to balance worker protections with business operational flexibility in modern labour relations.

In Brazil, through Regulatory Standard No. 1 (NR-1) issued by the Ministry of Labour and Employment, authorities introduced psychosocial risk monitoring as a regulatory priority, requiring employers to integrate mental health and stress management into Occupational Risk Management (PGR) plans. For Chinese firms operating in manufacturing, call centres, logistics, e-commerce, or shared service centres in Brazil, mental health transitions from an optional benefit into an enforceable occupational health and safety requirement with collective litigation exposure.

In Chile, execution of the '40-Hour Law' (Law No. 21.561) continues phased reductions of the workweek toward a 40-hour target by 2028, alongside heightened requirements for electronic timekeeping, shift management, and working hour transparency. Compliance challenges centre on redesigning shift rotations, overtime approvals, remote attendance tracking, and payroll calculations.

South American labour developments in 2025 present distinct national characteristics. Chinese enterprises going global must move beyond viewing South American compliance solely through traditional wage and severance lenses, establishing country-specific frameworks covering FAL severance calculations, psychosocial risk governance, electronic timekeeping, collective bargaining alerts, and localised contract updates.

4.Australia

In Australia, provisions of the Fair Work Legislation Amendment Act 2023 took full effect in 2025. Key measures include: criminalising intentional wage underpayments ('wage theft'), establishing corporate fines up to AUD 8.25 million or three times the underpaid amount, alongside maximum 10-year imprisonment terms for corporate officers; establishing a statutory 'Right to Disconnect', empowering employees to refuse unreasonable contact outside working hours; and increasing the national minimum wage (to AUD 24.96 per hour), superannuation guarantee rate (to 12%), and paid parental leave (to 24 weeks).

Additionally, the amendments clarify employee versus contractor distinctions, prioritising economic reality over contractual labels.

VII. Conclusions and Strategic Recommendations on Labor Compliance for Chinese Enterprises Going Global

The drastic changes in labor law jurisdictions across Asia, Africa, Europe, and other regions from 2024 to 2025 profoundly demonstrate that the early "bonus period" for Chinese enterprises going global—characterized by a "guerrilla-warfare" model that relied on arbitrage between domestic and foreign labor law systems, low-cost use of local labor, and neglect of local environmental and community costs—has largely come to an end. Caught between the dual historical forces of mandatory global ESG compliance and the comprehensive awakening of social rights in developing countries, Chinese multinational enterprises must achieve a strategic leap from "extensive people management" to "lean human capital governance."

Based on the detailed data analysis and systematic review presented in this year's Blue Book Report, we propose the following four high-value strategic recommendations for Chinese enterprises expanding overseas:

First, abandon domestic mindset inertia and restructure an employment system and organizational framework that truly adapts to localization.

Chinese enterprise management must resolutely overcome the path dependency of directly transplanting the domestic "996 overtime culture," low-base-salary-plus-strict-performance-appraisal mechanisms, and traditional on-site management models to overseas operations. Facing Saudi Arabia's maximum 180-day probationary period and increasingly detailed welfare protection requirements, Indonesia's mandatory restrictions on the maximum duration of fixed-term employment contracts, Australia's employee "right to disconnect," and Vietnam's scrutiny of work permit qualifications, job necessity, and local substitution possibilities for expatriate executives and technical personnel, enterprises should, at the initial stage of project landing assessment, engage labor law consultants who understand the pain points of Chinese enterprises and are well-versed in local labor laws and enforcement practices, to carry out localized adaptation of employment systems, organizational structures, and staffing configurations.

For example, in compensation design, through scientific disaggregation, enterprises can distinguish between basic wages, living allowances, transportation subsidies, housing subsidies, performance bonuses, overtime pay, and statutory benefit contribution bases, thereby lawfully mitigating the impact of minimum wage surges caused by inflation in host countries and avoiding the predicament of illegal wage arrears.

Second, make a comprehensive transition from "passive PR-driven compliance" to "active construction of a Human RightsESGDue Diligence(HRDD)system."

Faced with mandatory human rights due diligence (mHREDD) being advanced by Asian countries such as South Korea and Thailand, as well as mandatory climate and environmental disclosure policies implemented by the UAE, enterprises can no longer treat ESG as mere soft language in brand promotion or bidding materials. Although the EU has significantly narrowed the scope of supply chain compliance and reduced the burden on enterprises through the "Omnibus I" proposal, this does not mean that global supply chain compliance pressures have receded. On the contrary, major European purchasers, financial institutions, and end brands will continue to transmit human rights, environmental, labor, and climate responsibilities upstream through contractual clauses, supplier access requirements, audit checklists, and data disclosure requirements. In the United States, multiple states continue to intensify requirements regarding pay transparency, worker freedom of speech, AI hiring audits, and labor rights protection. Therefore, Chinese backbone supply chain enterprises should no longer view this as a pure financial cost and compliance burden, but rather transform it into a competitive moat for seizing high-end international orders. Enterprises should refer to the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises to proactively conduct in-depth labor tracing throughout their supply chains. At the same time, enterprises should actively leverage digital tools to establish records that can penetrate multiple tiers of suppliers—covering working hours, wage payments, social security contributions, occupational safety, dormitory management, and corrective action tracking—to meet the increasingly stringent "visual compliance and data compliance" reviews of multinational purchasers through high-transparency data. Concurrently, adhering to the principle of "balancing internal and external considerations, and two-way compliance," enterprises must always remain mindful of Chinese legal requirements concerning supply chain security and stability. In the future, the truly competitive Chinese enterprise going global will not be the lowest-cost supplier, but the compliance-oriented supplier that can demonstrate, through transparent data, that its supply chain is lawful, stable, and sustainable.

Third, properly respond to the wave of "asset distribution" in resource-rich countries and the "union equality" activism in Europe and the United States.

Enterprises need to meet host-country compliance requirements and maintain the stability of mining operation permits, while avoiding the weakening of actual control over core subsidiaries due to equity dispersion, loss of control over employee representation mechanisms, or intervention by local interest groups. Therefore, employee stock ownership arrangements should not be simply treated as one-off equity transfers, but should be designed as a comprehensive governance tool that combines compliance certification, transparent dividend distribution, employee representation, exit restrictions, anti-corruption firewalls, and control stability.

In developed countries, enterprises must attach great importance to the comprehensive resurgence of union power. The UK's Employment Rights Act 2025 repeals the Strikes (Minimum Service Levels) Act 2023 and will further reshape the collective labor relations landscape through measures such as granting unions access to workplaces and simplifying union recognition procedures. Canada's Bill C-58, effective June 20, 2025, restricts employers in federally regulated workplaces from using replacement workers during legal strikes or lockouts, while retaining specific exceptions for health, safety, serious property damage, and environmental harm.

This means that Chinese enterprises in European and American markets can no longer treat unions as sudden crises, but must incorporate them into routine labor relations governance: establishing early union engagement mechanisms, collective bargaining contingency plans, critical position maintenance arrangements, on-site communication authorization rules, and management anti-retaliation training.

More importantly, enterprises must shift their corporate social responsibility (CSR) funds from superficial donations to investments that genuinely address local community pain points in infrastructure and public services—such as clean drinking water, basic medical facilities, health services for employees and their families, local youth vocational education, women's employment training, community traffic safety, and environmental restoration projects. By proactively incorporating labor-capital conflicts, community grievances, and environmental risks into benefit-sharing mechanisms, enterprises can reduce the risk nexus of extreme environmental accidents, collective labor disputes, supply chain disruptions, and governmental enforcement pressures in an environment where resource nationalism, union mobilization, and ESG scrutiny overlap.

Fourth, implement digital real-time risk control of global payroll and personnel compliance data.

Penalties for illegal wage payments and unlawful employment are escalating exponentially across many regions worldwide. Enterprises should consider investing in or procuring SaaS-based global payroll management and HR risk control systems to monitor in real time, across all overseas offices, local minimum wages, industry wages, overtime pay, holiday pay, statutory benefit contribution bases, individual income tax withholdings, work permit validity periods, and visa overstay risks. The systems should also embed critical red-line alerts for local termination notice periods, collective dismissal procedures, disciplinary appeal periods, and severance settlement deadlines. When unavoidable layoffs, bankruptcy liquidations, or structural reorganizations occur, the system should be able to automatically trigger permission freezes, evidence preservation, approval workflows, and severance settlement procedures, and accurately calculate End of Service Gratuity, accrued annual leave conversion, bonuses and commissions, pay in lieu of notice, statutory severance, social security top-up payments, and tax withholdings in accordance with the law. The core objective is not simply to improve HR efficiency, but to eliminate, through data-driven, automated, and evidence-based management, the long-tail risks of class-action lawsuits, labor inspections, tax recovery actions, criminal investigations, and hefty fines triggered by a single wage payment, a single allowance, a single visa overstay, or a single miscalculation in severance compensation. In 2025, as the tide of globalization enters deeper waters and anti-globalization currents surge, labor compliance is no longer a logistical support option for enterprises going global, but a "front-line shield" that determines the very survival of multinational operations. Only by exchanging respect for human rights for long-term productivity, and by forging supply chain resilience through compliance, can Chinese enterprises steadily advance amid the turbulent global landscape and truly transform into respected multinational conglomerates.

[1] International Labour Organization, World Employment and Social Outlook: Trends 2025.

[2] Green Finance & Development Center, China Belt and Road Initiative (BRI) Investment Report 2024.

[3] Ministry of Commerce of the People’s Republic of China, Brief Statistics on China’s Overseas Labour Service Cooperation, January–February 2024.

[4] China Labor Watch, Trapped: The Belt and Road Initiative and Its Chinese Workers, 22 November 2022.

[5] Watson Farley & Williams, “Vietnam’s 2025 Investment Law: An Immediate Shift in the Foreign Direct Investment Framework”, 24 March 2026.

[6] Baker McKenzie, “Vietnam: New Decree Replacing Decree No. 152/2020/ND-CP and Decree No. 70/2023/ND-CP on the Management of Foreign Employees Working in Vietnam”, 18 August 2025.

[7] Government Portal of the Socialist Republic of Vietnam, “Foreigners—Work Permits”, 30 March 2026.

[8] PIB Delhi：“Building Inclusive Workplaces Empowering Women for a Viksit Bharat”, 13 OCT 2025.

[9] Ministry of Labour & Employment:“Efforts of Modi Government Pave Way for Historic Expansion in Social Protection Coverage in India in Last 11 years”.

[10] “Indonesia: Key Changes in the Employment Landscape in 2024”, 21 February 2025.

[11] Constitutional Court of the Republic of Indonesia, Decision No. 168/PUU-XXI/2023.

[12] HR Insight, “Indonesia’s Minimum Wage: Changes, Impacts and Outlook for 2025”, 3 February 2025.

[13] https://fair.work/wp-content/uploads/sites/17/2025/09/Fairwork-Indonesia-Report-2025_FINAL.pdf。

[14] Sustainalytics, “Asia in Focus: The Region’s Progress on Human Rights Due Diligence”, 12 December 2025.

[15] Latham & Watkins, “South Korea Reintroduces Human Rights and Due Diligence Act”, 7 August 2025.

[16] Ropes & Gray, “An Update on Mandatory Human Rights and Environmental Due Diligence Legislation in Asia—What to Watch for in 2026”, 20 January 2026.

[17] Walk Free, “South Korea Reintroduces Mandatory Human Rights and Environmental Due Diligence Bill”, 26 June 2025.

[18] Morgan Lewis, “Significant Amendments to Kingdom of Saudi Arabia Labour Law Announced”, 20 August 2024.

[19] Addleshaw Goddard LLP, “Looking to the New Future: Understanding the 2025 Amendments to Saudi Arabia’s Labour Law”, 24 January 2025; Pinsent Masons, “Saudi Arabia Employment Law Changes Reflect Commitment to Fair Employment”, 7 April 2025.

[20] Shreyas Patil, “UAE Labour Law: New Amendments to UAE Labour Law”, 4 June 2025.

[21] Mayer Brown, “UAE Employment & Benefits—2024 Highlights and 2025 Outlook”, 27 November 2024.

[22] Ibid., note 22.

[23] Ibid., note 23.

[24] Official website of the Knesset, Protection of Workers in Times of Emergency Law (Amendment No. 5—Temporary Provision—“Swords of Iron” War) (Amendment No. 4), 2025.

[25] RAID, “‘No Excuse for Poverty Pay’: NGOs Denounce Mining Companies during DRC Mining Week 2025”, 10 June 2025.

[26] Ministerial Order No. 33/CAB/MIN.ET/EAN/JDO/8/2025, amending and supplementing Ministerial Order No. 121/CAB.MIN/TPS/112/2005 of 26 October 2005.

[27] Nigeria, National Minimum Wage (Amendment) Act, 2024.

[28] HRPayHub, “Nigeria’s New NGN 70,000 Minimum Wage and Its Impact on Global Compliance”, 7 November 2025.

[29] International Organisation of Employers (IOE), “Morocco: Parliament Adopts Right-to-Strike Law”, April 2025.