Progress seen in expat social security scheme

PUBLISHED : Saturday, 21 January, 2012, 12:00am
UPDATED : Saturday, 21 January, 2012, 12:00am


The Ministry of Human Resources and Social Security said yesterday a new law that requires expatriate workers on the mainland to make social security payments was proceeding 'in an orderly manner', despite strong opposition among the business community.

The ministry's announcement last year that all expat workers would have to contribute to mainland social security schemes from October 2011 sparked widespread concern among foreigners.

Foreign workers and their employers have to make monthly contributions to a basket of social security funds - effectively meaning they will have to pay more tax.

Foreign workers are supposed to pay 1,300 yuan (HK$1,592) into a social security fund each month, with their employers contributing more than 4,000 yuan a month.

Some cities, such as Shanghai, were reportedly delaying the law's implementation, fearing it would put off foreign investors.

Ministry spokesman Yin Chengji said at a news conference yesterday the scheme was proceeding 'in an orderly manner', with 7,800 foreigners having joined social security plans in Beijing.

It was a legal requirement and international practice for foreigners in many countries to join local social security schemes, he said.

'This is for the protection of the employee's rights to social security ... and China is following international practice,' he said.

The mainland is in the process of negotiating with some countries bilateral exemption agreements to save employees from duplicating payments at home, he said.

More than 600,000 expats work on the mainland. Many foreign company executives have criticised the new rule, saying it would spoil the environment for their businesses.

Yin said the ministry would endeavour to address concerns that have been raised by the expatriate community.