Wang Zhaoguo, vice chairman of the Standing Committee of the National People's Congress, said the contract system would establish an important legal framework in labor relations, and should be fully set up across the country.

Taking part in a teleconference on labor contract system reform held on Tuesday, Wang, also president of All-China Federation of Trade Unions, said the contract system should be set up and efforts made to create fair, balanced, and harmonious labor relations.

China plans to establish an all-round labor contract system by 2008, by which time most firms in China should have signed labor contracts with their employees.

According to the plans, contract administration will be mature by then.

In the past, most Chinese workers enjoyed the "cradle to grave"welfare system. But over the past dozen years, as China has shifted to a market economy, an increasing number of workers have signed labor contracts covering their salaries and welfare.

The current labor contract system was initiated by the labor law enacted 12 years ago. The top legislature is currently examining the country's labor contract law.

A draft of the labor contract law was submitted to the legislature for review last December.