FIRST PERSON ULRICH O. BIRCH Admirable intentions, but poor performance
Editor’s note: Ulrich O. Birch, 62, is chairman of the European Chamber in the southwest region. Until December 2011, the Swiss national was president of ABB Turbocharging in Chongqing.
Isee the policy from two perspectives; my personal experience as an expat and, as the chairman of the European Chamber in the southwest regions of China from the companies’ point of view.
I heard about the policy in 2011, when it came into effect. I attended some comprehensive presentations from Beijing in early 2012, before Chongqing implemented the law.
I believe that the law was introduced with good intentions and in the interests of foreigners and society as a whole. Expats are not opposed to laws that provide equal treatment for Chinese and foreigners.
However, the policy lacks clarity, which has led to poor implementation and jeopardizes the good intentions.
Furthermore, since foreigners are subject to the law, shouldn’t the policy also be available in English? According to my understanding, this is not the case.
On paper, the policy may look fine, but in terms of practical implementation, things are quite different.
For example, can foreigners receive maternity benefits if they have more than one child? If female employees decide to have a second baby, do they still get the benefit?
Retirement insurance also confuses me. Many expats stay for a short time and then return to their home countries. They still contribute in their home countries, because failure to do so means they might lose “contribution years”, which will affect their pensions.
For instance, I was employed by Switzerland’s ABB in Chongqing. I paid my contributions to the Chinese social insurance, even though I was in the Swiss social insurance system as well.
Even if I paid six years’ contributions in China, I wouldn’t be paying in Switzerland, unless I made additional payments, which would reduce my pension significantly.
If I pay the compulsory contribution in China and also voluntarily in Switzerland, I have to make two payments, which is unfair.
In addition, the policy assumes that when foreigners leave the country, they can take their contributions with them. However, only expats who leave China after 15 years or longer in the country — a very small number — can claim retirement benefit.
If they leave earlier, foreigners can ask for their individual contributions to be refunded, but the much higher contribution made by their companies cannot be taken out. This makes employing foreigners in China unnecessarily expensive. In addition, how and where they can claim a refund remains a mystery.
Companies are no longer hiring foreign employees because of the cost, and that may see an increasing number of expats leaving China.
That would be a great loss for China’s growing economy because foreign workers have brought valuable experience and international practices. I would hate to see foreigners leaving China because of these reasons. I am fascinated by China and voluntarily chose to stay here after my primary assignment ended. I am willing to contribute my knowledge and experience to China and Europe to promote better cooperation. Ulrich O. Birch was talking to Luo Wangshu.