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Taxing troubles for foreigners in China

Government to mandate that all non-Chinese enroll in the country's social insurance program, for services most don't want or use

China's plan to force foreign workers to buy into its national social insurance program is vexing expatriates from Beijing to Guangzhou, with many expatriates saying they wouldn't use any of the services but would end up paying a hefty price for nothing.

With more than 500,000 foreigners officially on the books working on China, the new mandate could have a major impact here when it goes into effect on Oct. 15. According to Chinese press reports and a copy of interim rules on the social security law, all legal foreign workers in China, including foreign correspondents, those employed by the Chinese government and foreign and domestic firms, will be required to enter the country's social insurance program, enrolled in the national pension, medical and life insurance schemes. Trouble is, foreigners tend to avoid Chinese hospitals to begin with and many have their own insurance policies and pay into national pension programs in their own countries. Yet China says it will only exempt workers from countries with which it has signed a social insurance program agreement -- the United States is not among those.

While foreign workers in the US are often faulted for taking advantage of the country's health care and social programs, the same can't really be said of foreigners working in China.

The cost? As much as $10,000 per year, with about 75 percent by borne by the employer and the rest paid by the employee.

http://www.globalpost.com/dispatches/globalpost-blogs/the-rice-bowl/taxing-troubles-foreigners-china