The new law aims to tranquilize the unrest.
America's blue-collar workers have seen their own living standards decline over the past quarter century, related in part to the very success of China in attracting manufacturing, as incomes of investors in the top one percent of Americans have soared.
Their concerns, long scorned as Neanderthal in Washington policy salons, have catapulted to the capital's consciousness since last November's elections.
Measures to increase the minimum wage, ease unionization, and tie market access in international trade pacts to strict enforcement of labor rights are suddenly stirring in Congress.
These parallel developments may be coincidental manifestations of quite independent pressures to tame globalization and re-direct its benefits.
Chinese authorities remain allergic to American policy prescriptions that would crimp continued outsourcing of production to their shores.
But they have also had an epiphany of their own that may subtly alter the global politics of trade and regulation in coming years.
After leading what American labor advocates have called an international "race to the bottom" in terms of wages and worker protections, Beijing discovered that even the most modest measures it might decide were politically essential to maintain domestic stability would provoke international investors to seek an even lower bottom.
The government of Hu Jintao first proposed the law in 2005 amid mounting protests over withheld pay, unpaid overtime, and at-will firing without contracts.
Among the nearly 200,000 public comments submitted to the Congress - a record number in the history of the Communist regime - were those of the European Union Chamber of Commerce in China and the American Chamber of Commerce in Shanghai, both warning that such a law could negatively impact foreign investment in China.
Even after the draft bill was watered down, the head of the European group warned that additional costs resulting from its "strict" regulations would prompt foreign companies to "reconsider new investments or continuing their activities in China."
Surely Vietnam, Bangladesh, and Pakistan would not interfere this way in the workings of the market!
In the end, the Chinese diluted perhaps the most daring feature of the legislation - a provision for workers in enterprises without a union to elect representatives empowered to negotiate collectively with management.
As enacted, the law allows them to choose such representatives to negotiate only under the "direction" or "guidance" of China's official union monopoly, the All-China Federation of Trade Unions (ACFTU).
ACTFU is widely derided as a toothless dragon. Wal-Mart, one of China's largest outsourcers, furiously battled ACTFU's effort to set up union branches in its stores in China - but labor critics note acidly that, once Wal-Mart was forced to capitulate, it quickly got over its ideological aversion to unions because ACTFU contented itself with collecting dues and avoided making waves.
But even a state-controlled union may eventually be prodded into action by worker discontents.
Chinese authorities have to brace themselves for increasingly contentious choices between the frustrated expectations of its vast population to share in the growing economic pie and the determination of investors to minimize constraints on their profitable operations.
China will soon find itself in the position of previous "middle" income developing countries - such as, in our hemisphere, Mexico - where even modest wage and benefit improvements undercut their attractiveness to investors.
Tellingly, in India -- where wages are, if anything, even lower than in China - the country's feisty trade unions are increasingly vocal in pressing for trade enforcement of the internationally recognized worker rights enshrined in the core covenants of the International Labor Organization.
As the realization dawns that beggar-thy-neighbor labor deregulation can boomerang in intensifying social and political unrest, China's hard-nosed authorities cannot avoid the conclusion that they need the global application of ILO rules to keep the golden goose of globalization producing.
And in that, they may find some convergence with American leaders concerned to uphold worker standards abroad and worker incomes at home.
