China and Germany Ink Insurance AgreementAfter more than a year of negotiations China and Germany have reached a bilateral agreement on mandatory social insurance payments.The agreement is the first bilateral pact China has ever signed with another country concerning required insurance fees, the Ministry of Labour and Social Security said. According to the pact, German businesses in China and their employees who have Germany passports will not be required to pay endowment insurance and unemployment insurance. A similar exemption applies to Chinese businesses in Germany and their Chinese employees. China's Labour and Social Security Minister Zhang Zuoji, and his German counterpart Walter Riester and Peter Wild, minister at the Germany Embassy in China, signed the deal Thursday. The pact is designed to avoid the problem of overlapping insurance payments -- a situation in which two countries collect insurance fees from the same businesses and people. The agreement also ensures that neither will fail to charge the compulsory insurance fee. More significantly, China expects that by signing such a pact, it can improve its insurance system and investment environment. The labour ministry began negotiation with the Germany Government in 2000. The two sides conducted three rounds of negotiations before the agreement was signed Thursday in Beijing. Both countries promised to co-operate closely and offered help to the other if necessary. China is currently reforming its social security system and social insurance is one of the most important aspects of the reform process. |
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