This thesis paper will analyze the short-term repercussions of the labor contract law on foreign enterprises since it was implemented on January 1st 2008. This research will explain the major differences between the 1994 labor law and the labor contract law as well as the major differences between Canadian labor contract laws and Chinese labor contract laws. It will also explain the most important laws of the labor contract law that managers should know and how it can affect managing their company in China. In addition, this study helps understand the implications on management at foreign enterprises and how human resource (HR) managers have reacted to the new labor laws. The study was done using interviews with lawyers to better understand the new laws and with managers from various companies in different industry sectors to better understand how they have adopted the new measures within their respective companies. The majority of companies interviewed operate in South China, and this paper will focus mainly on the strength of the region: manufacturing. Seeing as the labor contract law was adopted only a few months ago, this research topic is relatively new and uses qualitative interviews with foreign enterprises as well as news reportage from the Hong Kong and South China region to discuss management issues and problems with the new labor contract rules