"Employers may have an upper hand over those employed, but, when compared to enforcement officials, employers may be the weaker ones. The law can bring about a win-win relationships between employers and employees, but that all depended on well-balanced enforcement," says Duan.

Based on the latest statistics released by the China Labor Market Information Center, foreign invested firms' demand for labor only made up 8 percent of the market. In addition, firms with funding from Hong Kong, Macao and Taiwan investors demand for labor formed 7 percent of the market. This shows that foreign invested firms only employed a fraction of labor in the market.

Foreign investors have expressed concerns that the law might not be enforced uniformly and objectively, and called for the government to ensure a level playing field between Chinese companies and foreign invested firms.

The European Union Chamber of Commerce in China is of the view that the key challenge in China remained the compliance by employers and the enforcement by authorities of existing Chinese laws.

"The Chamber encourages the Chinese government to focus its efforts on improving the implementation of existing regulations and suggests that the education and training of enforcement officials should be substantially strengthened, especially at the local levels," the chamber said in a written statement.

James Zimmerman, chairman of the American Chamber of Commerce in China, specifically pointed out a provision in the law that held labor bureau officials liable administratively and criminally if found guilty.

"If a labor bureau official fails to perform his or her duties or acts illegally and causes harm or losses to the employees or employers, he or she is personally liable.

"This provision will put pressure on the labor officials to enforce the law uniformly and objectively," said Zimmerman.

While there is a provision to pressure enforcement officials to toe the line, there is also a provision that asserts weight on the employers to act in a responsible manner, as the Government offers rewards upon verification to those who alerted the authorities on any violation of the law.

The mechanism of checks and balances has been established. Now all that remains is for the players involved to play their roles accordingly.