Comments on People’s Republic of China Social Insurance Law

The Canadian Chamber of Commerce in Shanghai (“CanCham”) sincerely appreciates the initiative and goals set out to be accomplished by the implementation of the new PRC Social Insurance Law made effective on 1 July 2011 as well as the recent Draft Interim Measures on Participation in Social Insurance by Foreigners Working in China (“Draft Measures”).


CanCham fully acknowledges the efforts of the Ministry of Human Resources and Social Security (“MHRSS”)  afforded to foreign employees (“Expats”).  We recognize that the benefits awarded by the new PRC Social Insurance Law seek to place Expats on an equal footing with Chinese nationals.  CanCham further acknowledges that the Draft Measures seek to grant Expats legal rights to China’s health care system and welfare programs, which may have been lacking from our home government as Expats living abroad.


On behalf of our members, CanCham respectfully submits recommendations and seeks clarification on certain matters related to the Draft Measures, details of which are more particularly set out in the attached Schedule for ease of reference.


CanCham supports MHRSS in its substantial endeavours to enact a national social security law that seeks to ensure Expats’ welfare in China.  We appreciate and are grateful for the opportunity to participate in the further development of the PRC Social Insurance Law as it is applies to Expats.



Expat exclusion conditions


It is recommended that Expats who are seconded or dispatched to China are excluded from the PRC social insurance regime if these individuals have salary packages that include the provision of social insurance originating from their home country

建议把派遣或借调到中国来工作的外国人排除在中国社保纳入范围之外, 因为这些外派员工的薪资里面已经包括了他们本国参加的社会保险部分。

Cap contribution levels


Since existing benefits available to Expats are limited in nature, it is recommended that the base salary relating to the calculation of Expats’ contributions be capped at 3 times the local average monthly wage of  Chinese employees at the amount of RMB 11,000 to manage companies’ operation costs and ensure that contributions accord with benefits available to Expats

因为外籍员工能真正享受的现有社会保险非常有限, 建议社会保险费用缴费基数封顶为当地中国籍员工月平均工资收入的三倍,为人民币1.1万,以控制企业运营成本,并确保外籍员工所获得与他们支付的保费相应的社会保障。

Flexibility on level of benefits provided


It is recommended that social insurance benefits for Expats be offered at varying levels to allow Expats the flexibility to pay in less contribution to align with benefit level chosen.


Refund of contributions upon departure from China


It is recommended that upon their departure from China, Expats are reimbursed their paid pension insurance contributions, such that personal contributions will be 100% refunded and a portion of all the employers’ contribution is also returned as well


Medical Facilities


It is recommended that social medical contributions be increased together with and increased and improved medical treatment available to Expats, including but not limited to Executive Outpatient Services, VIP Wards, Triple A hospitals and medical prescriptions available on official drug list.


Exemption period for Expats


It is recommended that Expats be given an initial 3 year exemption period from contribution and benefits for social insurance. Expats working in China for more than 3 years can be eligible to participate and be entitled to the same benefits as Chinese nationals.  Pension benefits can be made retrospective for the initial 3 year period.


Grace period


In respect of the enforcement of the Measures, it is recommended that Expats should be provided a grace period of one year. For Expats whose home country is already in discussions with China, a grace period should be provided to coincide with the completion of any such bilateral negotiations, before mandatory compliance with the Draft Measures.


Clarifications sought 需要说明事项


Unemployment insurance eligibility and disbursement


·                      If an Expat employee becomes unemployed in China, his/her work permit will no longer be in effect and will be required to depart China, how will such Expat be expected to make use of any unemployment insurance in China?

·                      Is it expected that unemployment insurance benefit will be transferred to an Expat’s home country given that without a work permit he/she may be required to return overseas?



Maternity insurance benefits


·                      How will maternity insurance be administered in respect of Expats who have more than one child?

·                      In what ways will maternity insurance affect trans-national marriages? For example, if a male Chinese national, who already has a Chinese child by another marriage, further marries an unemployed female Expat, will the Expat be eligible for maternity insurance?  



Account transfer and accumulated contributions for Expats


·                      Will the Draft Measures pertaining to social insurance accounts and accumulation of  contributions adopt the same rules as those enacted for Chinese nationals?  If not, what rules will apply?

·                      Since Expats are not registered as permanent residents in China, which province will be responsible for providing pension insurance benefits to eligible Expats but  who have not worked in any one location for more than 10 years (the main determinant for Chinese nationals)?



Query on retroactive influence


·                      When the Draft Measures become effective, is it intended that it will impact the time period before its effective date?


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