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Expats to be included in China's social security system

By Chen Xin (China Daily)

10:22, October 16, 2011

BEIJING - Foreign workers in China will be included in the country's social security system as a new regulation took effect on Saturday.

The Social Insurance Law passed in July allows foreign workers to enjoy retirement, medical, work injury, unemployment and maternity benefits similar to those for Chinese citizens.

According to the new ruling, all registered foreign workers with a valid work permit in China will be covered, including foreign workers employed by Chinese and overseas-funded enterprises, social groups, law firms, accounting firms and foundations that register in China, as well as foreign workers assigned to China by overseas registered companies.

The latest census in 2010 recorded nearly 600,000 foreigners living in China. Approximately 231,700 had work permits.

Being included in the program means the foreign workers' take-home pay will shrink, because part of their wages will be placed in a pension fund, and their employers will also have to pay more.

In China, workers pay 8 percent of their salary and employers pay 20 percent of workers' wages each month to the pension accounts. Workers must contribute to the pension accounts for at least 15 years to collect a pension after retiring.

Workers and employers also share the costs of medical and unemployment insurance but employers are responsible for work injury insurance and maternity insurance.

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