Uncertain Costs, Unclear Benefits: China’s Social Insurance System and Foreign Workers

Abstract

China’s fairly recent implementation of a social security insurance scheme that includes foreign workers has generated unintended uncertainties and inconsistencies both for foreign companies in China and for Chinese companies working outside China, without generating clear benefits for foreign workers. This Note provides an overview of the new scheme, which requires, for the first time, all foreign workers and their employers to pay into the social security insurance system. Weaknesses in this new scheme include inconsistent implementation, scattered timelines, and incomplete information on coverage. In the face of these and other shortcomings, China should focus on the benefits of reciprocity and totalization by implementing more bilateral social security agreements as well as clarifying the existing social insurance system.