Government and Policy
Foreign workers to get equal social insurance benefits
By Wang Qian (China Daily)
Updated: 2010-10-30 07:15
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BEIJING - Foreign employees in China will be entitled to the same social insurance benefits as Chinese nationals after the top legislature adopted a law on Thursday that is being seen as a major sign of the country's wider economic and social openness.
The Social Insurance Law, which was adopted by the Standing Committee of the National People's Congress (NPC), will take effect in July 2011.
"China's economy and society are opening up more and more. Such a regulation follows international practice and gives equal national treatment to foreigners working in the country," Hu Xiaoyi, vice-minister for human resources and social security, said during a news conference held by the NPC Standing Committee on Thursday.
The five forms of insurance, paid for by individuals, employers and the government, will accumulate trillions of yuan in deposits.
China plans to spend 5.74 trillion yuan ($857.89 billion) by 2020 on an all-round social welfare system to improve people's livelihoods, according to the China Development Research Foundation, a government think tank.
Provisions relating to social insurance for foreigners working in China are also included in the new law.
Hu said that, to avoid foreign employees paying into social insurance programs in China and their homelands, Beijing will sign bilateral agreements on social insurance with other countries.
The law says that companies will pay worker injury insurance for employees at a rate to be decided by the State Council, or the cabinet, depending on how dangerous their jobs are.
Employees who get injured physically or mentally because of work will receive employment injury insurance, according to the law.
The law overcomes many of the obstacles under the old regulations, which had an effect on the movement of the migrant population. For example, it says that a new medical payment system should be established to allow medical insurance to be paid into one place and drawn upon in another.
But the law does not say how many insurance types will be available to foreign workers, compulsorily or optionally.
Currently, most foreign workers in China can enjoy worker injury insurance and basic medical insurance in big cities such as Beijing and Shanghai, said Cui Yana, a Shanghai-based lawyer specializing in labor disputes.
But insiders told China Daily that most businesses and State-owned companies in Beijing do not pay any kind of insurance for their foreign employees. They choose instead to reimburse employees for such things as medical bills, because that costs less every year.
Foreigners working in Shanghai who have not been covered by social insurance policies before were interested in the new law.
"If there was some type of social insurance developed and offered to 'expats', especially the full-time expats who have been living and working in China for a long period of time, I would absolutely love to learn more and explore options and quite possibly would participate," said Joey Gu, a United States citizen who works as communications manager at CareerEngine Partner Network.
"The new law is just a beginning in the improvement of our country's laws pertaining to foreign workers, but it is a long road," Cui said.
She added that local respondent laws will need to be drawn up as soon as possible to further implement the new law.
"The local authorities must elaborate on which insurance is compulsory and which ones are not, and the punishments should be clear," she said.
But she said she is optimistic about the first step taken by the country toward foreign workers being included in the social insurance system.
"It is good to see we are on our way to protecting foreign worker's social insurance rights, but there are still many illegal foreign workers in the country's manufacturing hubs, such as the Pearl River Delta region," Cui said.
During the first half of 2010, about 12.55 million people from overseas traveled to China, including 5.89 million for sightseeing and 800,000 people for business visits, according to the latest statistics from the bureau of exit and entry administration of the Ministry of Public Security.
At the end of 2009, about 223,000 foreigners held employment permits, Cui said.
In recent years, more and more foreigners from Southeast Asian countries have found jobs in labor-intensive areas and big cities in China. Unlike the wealthy investors and senior marketing and technical executives who have relocated to China from overseas in the past, these foreign workers are largely unskilled and unable to get work visas.
Cui said the difficulty in getting a work visa for such foreign workers has led to a boom in the number of illegal foreign workers in China.
The recovery of China's export sector and the shortage of workers in South China have resulted in a rise in the number of illegal immigrants from bordering countries, adding pressure on local public security and migrant population management authorities.
Xinhua and Li Xinzhu contributed to this story.
China Daily
