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Chinese Social Insurance: Will Foreigners Be Able to Opt Out?

Aug 29, 2011

China has expanded the coverage of its social insurance system to include foreigners working in the country in a move that could have significant consequences for Americans and American businesses operating in the country unless Washington steps in to negotiate on their behalf.

The Social Insurance Law that came into effect on July 1, 2011 is China’s first comprehensive law in this area, superseding a wide range of central and local directives, rules and regulations. As often happens in Chinese law-making, the full set of applicable rules has yet to be issued. Instead, the rules are being released in installments. Among the provisions that have been released is Article 97, which in the English-language version of the law issued simultaneously with the Chinese, is rendered like so: “Foreign nationals who take up employment in China shall enrol in social insurance with reference to this Law.”

Stanley Lubmanis a long-time specialist on Chinese law, teaches at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999)

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