BEIJING - A new exit and entry law that stipulates harsher punishments for foreigners who illegally enter, live or work in China takes effect on July 1, 2013.

After three readings since December 2011, the draft law was adopted at the five-day bimonthly session of the National People's Congress (NPC) Standing Committee in 2012.

The law says foreigners must obtain valid identification documents when working in China, adding that foreigners may not be employed without valid employment certificates.

According to the law, employers will be fined 10,000 yuan ($1,620) for every foreigner they illegally employ up to a maximum of 100,000 yuan. Any monetary gain resulting from such employment will also be confiscated.

Units or personnel employing foreigners or enrolling foreign students should report employment information to local police departments, while citizens are encouraged to "report clues" regarding foreigners who may be illegally living or working in China.

"The number of foreigners entering China has been increasing by 10 percent annually since 2000. Their identities and goals are more diverse than ever, and their activities are wide-ranging and complicated," said Yang Huanning, vice-minister of Public Security, in 2012.

Yang said the number of foreigners employed in China jumped from 74,000 in 2000 to 220,000 by the end of 2011, with many working as employees of foreign companies, teachers or representatives of foreign organizations.

According to the law, foreigners who illegally stay in the country will be given a warning before being fined. In severe cases, they will be fined no more than 10,000 yuan or detained for five to 15 days.

Foreigners who violate China's laws and regulations and are deemed "unsuitable" to stay will be given an exit deadline. Foreigners who commit "severe violations" that do not constitute crimes may be deported and not allowed to enter the country again for 10 years, the law says.

Inspections conducted by the NPC in Guangdong and Hainan provinces, the Guangxi Zhuang autonomous region and Beijing between February and March in 2012 found that the country's visa and employment policies have been unable to keep up with social trends.

The inspectors said a national network should be established to coordinate the management of foreigners' residence and work information.

The law states that the minimum stay for foreigners holding work certificates is 90 days, while the period of validity for a residence certificate ranges from 180 days to five years.

For foreigners holding visas with a maximum stay of 180 days, the holders should hand in documents to government departments above the county level to apply for an extension seven days before the certificate expires, adding that the length of the extension should not exceed the originally permitted duration.

China previously had two exit-entry laws, one each for foreigners and Chinese nationals. Both were created in 1985. The law for foreigners is believed to be somewhat out of date, as it barely mentions issues related to the illegal employment of foreigners.

"The newly-adopted law, integrating the two existing laws, is crucial for the country to regulate exit and entry administration and ensure sovereignty, security and social order while boosting overseas exchanges," said He Yicheng, a member of the NPC Standing Committee.

The law also underlines the country's increasing efforts to attract high-caliber talented individuals from overseas to assist in the country's development, as it includes a new "talent introduction" visa category as well.

Ordinary visas will be granted to foreigners who enter the country to work, study, visit relatives, travel or conduct business, as well as to those who qualify for the "talent introduction" visa, according to the law.

"We will increase the eligibility quota for green cards and consider extending the applicable scope for duty-free entry and multiple-entry visas in order to make China more competitive in soliciting foreign investment and talent," Yang said while delivering a report on foreign entry-exit, residence and employment to the NPC Standing Committee.

Figures show that the number of foreigners who stayed in China for at least six months rose from less than 20,000 in 1980 to 600,000 in 2011.

By the end of 2011, 4,752 foreigners had received permanent residence cards, or the Chinese equivalent of a green card.

"The important thing for China is to set standards for foreigners in terms of educational attainment, occupation, salary and other aspects, just as developed countries do," said NPC deputy Ma Li.