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A brand-new labor contract law comes into force from the New Year's Day that is expected to markedly propel rights for billions of Chinese workers."The government that is making the most concerted effort to protect workers rights is China," said Auret van Heerden, Geneva-based head of Fair Labor Association, which monitors work conditions in 60 countries.That "goes against the conventional wisdom that China is leading the race to the bottom," the Bloomberg News quoted Heerden as saying on Tuesday.The Labor Contract Law aims to improve job security for workers, making open-ended terms of employment for those employees who have completed two fixed terms with the same employer. The legislation limits overtime, sets minimum wages and guarantees one month's pay for each year worked for sacked employees. It is the first time that China's top legislature, the National People's Congress Standing Committee, has ruled on open-ended work contracts and severance pay for fired workers.The new law will make it more difficult for companies to hire temporary workers, a practice favored by exporters to cope with fluctuations in orders.One side-effect of the legislation will be higher labor costs for all employers in China. It is estimated that some labor-intensive businesses will have to raise their selling prices, or move to other places with lower cost.Olympus Corp., the world's No.4 digital camera maker, and Yue Yuen Industrial (Holdings) Ltd., the biggest maker of shoes for brands such as Nike Inc., are among companies shifting some production to Vietnam to cut costs.According to Chinese press reports, some companies have been terminating contracts and asking employees to resign ahead of the introduction of the law.Huawei Technologies Co., China's largest maker of telecommunications equipment, offered 7,000 workers new contracts with benefits if they terminated their old agreements, spokesman Ross Gan said.Some employees accepted, while others chose not to sign and left, he said, without providing details. The move wasn't aimed at evading legislation, Gan said in an email to the Bloomberg News.
China's private enterprises employed 120 million people by September this year, up 9.5 percent from the same month a year ago, said a senior official on Saturday."The private sector of the economy is a main avenue of employment and re-employment in China," said Zhong Youping, deputy minister of the State Administration for Industry and Commerce.Zhang made the remarks at a forum on Chinese and Japanese small and medium-sized enterprises held in Guangzhou of South China's Guangdong Province.Developing the private sector would help increase job opportunities and enable economic growth and employment to boost each other, said Zhang.Labor-intensive firms and the service sector could absorb a lot of laid-off workers and college graduates, he added.Last year China's industrial and commercial authorities helped 2.54 million unemployed people find jobs in the private sector and nearly half of the country's new graduates entered private firms.
A pedestrian walks past a branch of China Construction Bank in Shanghai June 3, 2007. [newsphoto]China's central bank is considering establishing a deposit insurance system in a bid to promote financial stability, news reports said on Monday. The People's Bank of China (PBoC) aims to push forward legislation on deposit insurance, the Xinhua News Agency reported, citing information from a central bank meeting. PBoC has carried out research looking into this matter, according to the report. Deposit insurance is a measure introduced by policy makers to protect deposits, in full or in part, in the event of banks being unable to pay deposits. The insurance can maintain public confidence in the financial system and prevent bank runs, thus helping promote financial stability. The United States was the first country to establish an official deposit insurance scheme, during the Great Depression in 1934. Currently, nearly 100 countries have such an arrangement in place. The lack of deposit insurance in China is related to the fact that most of the banks in the country are State-owned, which offer confidence to depositors, analysts said.
BEIJING - China purchased at least 400 billion yuan (.6 billion) of goods and services in 2007, a new high compared to the 368.1 billion yuan recorded a year earlier, preliminary figures from the Ministry of Finance (MOF) revealed.Assistant Financial Minister Zhang Tong described the expansion as "outstanding" given the procurement stood at only 100 billion yuan in 2002, the first year the mechanism was introduced.The past five years have also witnessed an increasingly diversified government consumption that expanded from solely commodities in the beginning to services and engineering, he said. With 13,000 people engaged in purchasing nationwide, China has twice revised its procurement list to include 18 categories encompassing nearly 4,770 items.Energy-saving products accounted for a large percentage of the newly-added items. To lead by example, the government has pledged to reduce energy consumption for every 10,000 yuan of gross domestic product by 20 percent and pollutant emissions by 10 percent for the 2006-2010 period.This year, student textbooks for primary and junior high schools, medicine, farm machinery and other items to distribute to the needy free of charge or at inexpensive prices will be added to the list, Financial Minister Xie Xuren told a recent work meeting for 2008.Under a MOF directive promulgated last month, government procurement will favor independent innovation products starting this year, a practice, experts said, the United States adopted in the late 1950s to foster domestic high-tech industries, including aeronautic and astronautic technology, computing, semiconductors and integrated circuits.Qinghua University law professor Yu An said the move would provide good incentives for domestic firms to speed up technical innovation.MOF statistics revealed the procurement had spared an aggregate expenditure of at least 180 billion yuan between 2002 and 2007.The benefits, however, didn't drown out grumbles from the Heilongjiang provincial chapter of the Revolutionary Committee of the Chinese Kuomintang, one of the country's eight political parties, beside the ruling Communist Party of China (CPC).At a meeting last month, the chapter held transparency in government procurement should be enhanced as some products were found to be overpriced, of unsatisfactory quality or without effective after-sales service.Tendering companies must be subject to real-time supervision to avoid bribery and kickbacks. Perpetrating firms must be blacklisted and banned from the procurement, while governmental departments must submit their accounting ledgers for regular auditing scrutiny, they said.