The next logical step is to make a law that prohibits lamas from dying.
Of course, it is impossible to stop anyone from being reborn wherever their kamma takes them, but that is not what the law is intended to do.
Recognition of Tulkus click here is what the law aims to prevent. It is probably beneficial to put a stop to this nonsense. It invests too much power in religious authority and takes away individual responsibility.
In effect, the law prohibits the assigning of religious authority to any individual not approved of by the Chinese government. The Buddha advised us to be a refuge unto ourselves, not to depend on any other person as a refuge.