If you are considering setting up a company in the People’s Republic of China (the PRC) you should be aware that Chinese law is more protective of employees than the laws of many western nations, particularly the United States. The current PRC Labor Law was enacted in 1994; however, a new PRC Labor Contract Law, intended to supplement the Labor Law, is expected to come into force at the end of 2006. This new law contains both bad news and good news from the point of view of the foreign investor; however, in general it further strengthens the protection of employees. The Bad News: Severance Pay Because it is difficult under the PRC Labor Law to terminate open-term labor contracts, employers usually prefer fixed terms….