China property

Access to China’s housing fund for Hongkongers hits a snag, as Shenzhen-based firm refuses to let eligible employee join

The woman did not want to name the company, which is listed on the Hong Kong stock exchange, for fear of jeopardising her job

PUBLISHED : Sunday, 24 December, 2017, 8:02am
UPDATED : Sunday, 24 December, 2017, 12:02pm

A move by Beijing to give Hongkongers and Macanese on the mainland equal treatment with their counterparts there has a hit a snag, with a major real estate group telling newly-hired Hongkongers that it would not give them access to China’s housing fund, despite the central government announcing the nationwide policy last week.

A 24-year-old Hong Kong woman, who only wanted to be identified as Amy, said she was given the runaround and a warning when she asked her Shenzhen-based company about the policy.

“The human resources officer said no negative media coverage about this should be allowed,” Amy, a trainee at the company, said.

She did not want to name the firm, which is listed on the Hong Kong stock exchange, for fear of jeopardising her job.

In July, the cities of Shenzhen, Foshan, Dongguan and Zhongshan in Guangdong province were told to allow Hongkongers hired by local firms to join the fund, with President Xi Jinping announcing his intention to make it “more convenient” for Hongkongers to “study, work and live on the mainland” and take advantage of growth opportunities.

Previously, the scheme was only available to those working in a handful of cities, such as Guangzhou and Shanghai.

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On December 18, the State Council’s Hong Kong and Macau Affairs Office revealed that the policy would be implemented nationwide.

It said five central departments had issued a directive instructing local governments across the country to enact the necessary laws and allow Hong Kong, Macau and Taiwanese employees to join the scheme.

This was one of the goodies that Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor secured from state leaders during her maiden duty visit to Beijing last week.

Latest official figures showed there were 82,531 Hongkongers working in mainland China.

As members of the fund, Hongkongers and their mainland employers would make monthly contributions of between five and 12 per cent of the worker’s salary into an account that they could use to apply for low-interest housing loans for property purchases on the mainland, or for rent or renovations.

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But some Hongkongers said they could understand why mainland employers might find the policy tough to swallow.

Linda Wong, a Hongkonger who now runs an investment firm in Shanghai, said mainland employees were eligible for the housing fund and other types of social insurance, with the total package costing employers another 47 per cent of the employee’s salary.

The 57-year-old, who worked in Shanghai for eight years, said the financial burden of hiring Hongkongers on the mainland would be “acceptable” for employers only if the contributions were limited to the housing fund.

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Amy said she first asked human resources personnel about joining the housing fund when she started her job in July.

But she was told their internal rules did not support non-mainlanders joining the fund.

“The human resources officer told me that it’s an unexplained order from his superior and that as a staff I must accept some ‘internal rules’ that the company will not help non-mainlander employees join the fund at this moment.

“The so-called ‘internal rules’ are not in my contract or in any internal guidelines as far as I know,” Amy said, adding that she received the warning, and the runaround, when she broached the topic after the directive was issued.

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Amy graduated from Peking University and returned to Shenzhen to work, as her family lives there. She had planned to eventually buy a home with savings from the housing fund.

The Post reached out to Amy’s company but it did not respond to questions.

Under the scheme, employees and employers have to contribute an equal amount of the worker’s salary to the fund. Employees can use the funds to rent or buy homes on the mainland, or withdraw all the cash in one go if they retire, or stop working and leave the mainland. Eligible employees can also make use of the fund to apply for housing loans or leave their savings to their children as inheritance.

Watch: why is Hong Kong housing so expensive?

The current contribution rate at Amy’s company is 10 per cent. If Amy had her account, she would deposit 10 per cent of her salary into it each month, with her employer also putting in 10 per cent of her salary, over and beyond what it paid her. This would amount to 2,000 yuan (HK$2,377).

With proof of a stable contribution for six or more consecutive months, Amy could at best secure a bank loan of 500,000 yuan at an interest rate lower than what was on the market. She would then use her and her employer’s monthly contributions to the fund to repay the loan.

Shenzhen’s housing fund regulations require employers to set up accounts for new employees within the first month of formal employment. Errant employers could be fined between 10,000 and 50,000 yuan.

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“It’s illegal for an employer to refuse to set up the account for its employees,” social welfare policy professor Yue Jinglun of Sun Yat-sen University in Guangzhou said.

Yue, who is also a labour policy adviser to the Guangdong government, said access to the housing fund was one of the rights of urban labourers. Barring migrant workers from rural areas from such welfare was a notorious example of urban inequality, he added.

“Employers should not treat Hongkongers as migrant workers,” Yue said.

Asked if Hong Kong companies running businesses on the mainland would comply with the policy, Irons Sze Wing-wai, permanent honorary president of the Chinese Manufacturers Association of Hong Kong, believed they might have Hong Kong employees who did not want to be part of the housing fund.

Citing his company on the mainland as an example, Sze said the Hong Kong staff – a minority among all employees – preferred to still be considered Hong Kong, rather than mainland employees, as their income taxes would be lower.

Some had even bought insurance in Hong Kong and would return if they needed medical treatment, Sze said.

While the mainland’s income tax law requires individuals who work there for more than half the year to pay tax, Sze admitted it was not strictly implemented.

Additional reporting by Kimmy Chung