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A Sharp Decline in the Number of Foreigners in China Demands Serious Attention.

A Sharp Decline in the Number of Foreigners in China Demands Serious Attention.

Wang Wen, Executive Dean of the Chongyang Institute for Financial Studies at Renmin University of China delivered a speech at “习近平外交思想与‘身边的国际社会’理论研讨会 a seminar on Xi Jinping Thought on Diplomacy and its relevance to the "international community around us" on May 9. Below is a condensed version of his speech:



While the term "international community" may sound sophisticated, it exists right within our own society. Through social media platforms like WeChat, Chinese individuals can engage with a diverse range of foreigners, including diplomats, foreign journalists, businesspeople, international students, and overseas Chinese. These daily interactions, such as likes, comments, and conversations, contribute to the formation of an "international community around us." This community has significant influence over the number of long-term foreign elites residing in China and their integration into Chinese society. Moreover, it plays a vital role in shaping China's relationship with the rest of the world, particularly developed nations, and can contribute to resolving existing tensions.


One crucial challenge that China faces is the insufficient infrastructure to fully leverage the potential of the "international community around us." To establish and strengthen this community and propel China's global influence, breakthroughs and expansion in infrastructure are necessary. This includes developing and enlarging various institutional frameworks related to finance, business, and management. Looking ahead, attracting more global talents and foreign elites is vital for China to become a socialist modernized strong nation.


Furthermore, there is a significant disparity between China's global power status and the current quantity and quality of foreign residents and talents in the country. This disparity raises concerns. On one hand, statistics indicate an overall increase in the number of foreigners in China, but there has been a notable decrease in individuals from developed countries.


According to the seventh national census, the number of long-term residents from developed countries in China showed varying degrees of decline from 2010 to 2020. For example, the number of French citizens residing in mainland China decreased by about 40%, from 15,087 to 9,196. The number of Americans decreased by 23%, from 71,000 to 55,000. The number of German, Italian, and Japanese citizens residing in China has also declined.


As China's most internationalized city, Shanghai experienced a decrease in the number of foreigners from 208,000 in 2011 to 163,000 in 2021. I reside in Beijing's Wangjing Street, a relatively internationalized neighborhood. Ten years ago, nearly 100,000 Koreans were living in Wangjing, but now the number may be only 20,000. The proportion of foreign residents in China is approximately 0.05%, which is significantly low for the world's second-largest economy. It lags behind the percentages in Japan and South Korea, both of which have over 2% of foreign residents. It is even lower than countries like Laos (approximately 0.8%) and Cambodia (approximately 0.5%).


In general, top-tier talents tend to come from developed countries, but the fastest-growing segment of foreign residents in China consists of individuals from developing nations. However, the challenge of effectively accommodating and retaining high-caliber global talents in the long term remains unresolved in China.


The decline in the number of residents from developed countries in China over the past few years can be attributed to various factors, such as the impact of the COVID-19 pandemic and the intensification of the Sino-US competition. However, another significant factor often goes unmentioned: the actual implementation of China's policies and the social-cultural environment still have room for improvement to effectively accommodate foreigners. In light of this, four suggestions are in order to attract a greater number of high-caliber foreign talents.


Firstly, efforts should continue to attract foreign investment and enhance the business environment, ensuring a rapid influx of foreign capital. The rapid increase in foreign investment is crucial for domestic development prospects and countering Western containment. Central and local governments need to address foreign investment access in areas such as tariff barriers, banking and finance, postal services, securities and insurance, construction and tourism, education, and telecommunications.


Secondly, fostering social acceptance and cultural inclusiveness towards foreigners is essential. Regrettably, derogatory comments about foreigners can be found in Chinese public discourse, contradicting China's traditional values of inclusivity and failing to showcase the confidence of a great nation. Particularly in the context of escalating competition between China and the West, approaching foreign individuals, especially those from Western countries, with a fair and balanced mindset is crucial. Treating foreigners equitably based on law rather than cultural biases or social prejudices is a fundamental value for citizens of a modern great nation.


Thirdly, guaranteeing quick and convenient procedures for foreigners in various areas, such as finance and taxation, residence, tourism, and daily life, is crucial. Foreign students, workers, and long-term residents coming to China should receive equal treatment as Chinese citizens, including simplified processes for registering WeChat and Alipay accounts, obtaining credit cards, and accessing social security, medical insurance, and pension. These procedures should be streamlined to ensure convenience and efficiency for foreigners settling in China.


The key to "coordinating security and development" is to promote development while ensuring overall security. It is crucial to maintain overall security while continuously advancing rapid development. An important criterion for testing local governance is if it does NOT prioritize security and in the process stifle development or international exchanges.


Lastly, reforms and innovations can be promoted in China's approval process for intellectual exchanges with foreign countries. Exploring interactions between China's intellectual community and foreign scholars, businesses, embassies, media, and related individuals for greater flexibility can transition from a pre-approval system to a post-reporting system. Requiring pre-approval for every interaction can impede academic and exchange activities, potentially tarnishing China's international image.


Against the backdrop of General Secretary Xi Jinping's continuous call for "comprehensive opening up to the outside world" and the central government's emphasis on openness, it is necessary to reflect on and remind the Chinese government at all levels to pay attention to the specifics of their policies regarding international exchanges. The devil is in the details, as they determine the success or failure and the actual outcome of China's interactions with foreign countries and the construction of the "international community around us."


Amidst ongoing reports in overseas public opinion suggesting a decrease in the number of long-term residents from developed countries in China and claims of China's lack of accommodation towards foreigners or inconvenience in traveling within the country, it is essential to reflect on these issues and ensure that the implementation of policies aligns with the goals of openness and fosters positive international interactions.



Source: Pekingology


China How To: Registering staff for...

China How To: Registering staff for Social Welfare

Once you’ve set up your own company, you can start to hire Chinese staff, but to do that you’ll need to register them for China’s social welfare programs. Here’s an introduction to some of the rules concerning the recruitment of Chinese labor: whereas hiring foreign staff requires one to apply to the authorities to get them a work visa and work permit, and you are automatically eligible to hire Chinese as soon as you finish registering your employees’ social welfare accounts, as outlined below.



What are the Five ‘Insurances’ Plus the Housing Fund?

  • Pension: Cost to Company is usually 20% of the Employee’s salary, substantially lower in some cities and cost to the Employee is usually 8% of the Employee’s salary, uniform rate nationwide.
  • Medical Insurance: Cost to Company is usually between 7%-12% of the salary, substantially lower in some cities and cost to the Employee is usually 2% of the Employee’s salary, substantially lower in some cities.
  • Work-Related Injury Insurance: Cost to Company from 0.4%-3% of salary depending on the location and degree of danger of business engaged in and cost to the Employee ‘ No contribution required.
  • Unemployment Insurance: Cost to Company is usually 2% of salary but sometimes 1% and only 0.4% in Shenzhen and cost to the Employee is usually 1% of the Employee’s salary.
  • Maternity Insurance: Cost to Company from 0.5% of salary depending on location (no contribution at all in Dongguan). Cost to the Company.
  • Housing Fund: Contribution towards Housing Funds are mandatory and come from both the Company and the Employee determined by local Government, Housing Fund regulations apply to the Employees in all geographic regions of the country. Contributions must be calculated based on each Employee’s average monthly wage over the last year. The actual percentage differs per city or province.



Registering for your employees’ social welfare accounts

Go to your local Social Insurance Management Center to set up an account for your company. Each city will usually have one of these in each district. For the addresses of the first-tier Chinese cities, look towards the bottom of this article.



You will need the following documents to set up the account:

  1. The original copy of your company’s business license, and a photocopy 
  2. The original copy of your company’s organization code certificate, and a photocopy 
  3. A stamp by your company chop
  4. Company Registration Form of Social Insurance; you can get this at the center
  5. The company bank account number
  6. The company’s tax registration number
  7. A commitment letter of use social insurance card signed, which you can obtain at the center

You can now start employing Chinese staff!



Registering your employees onto the employment record

Next, you need go to the local Human Resource and Social Security Bureau to register your employees onto the employment record.



You will need the following documents:

  1. The original copy of your company’s business license, and a photocopy 
  2. The original copy of your company’s organization code certificate, and a photocopy 
  3. Your company’s official “chop” (aka stamp or seal)
  4. Completed registration form of employment record with your new employees’ names and a brief introduction of each of them. You can get this in the bureau and it should be completed in triplicate; one should be submitted with the above documents at the Human Resource and Social Security Bureau, one copy should be submitted when you return to the Social Insurance Management Center (see below), and one should be kept for your company’s files.



Registering the employees

Now you must actually register your specific employees. You will only need to do the above two procedures the first time you employ a Chinese person; the following procedure applies for each Chinese person you hire from then on. Return to the Social Insurance Management Center with the following documents to register the employee (or, if they already have a social insurance card, use the following documents to change their employer’s information to your company).



  1. Company Registration Form of Social Insurance 
  2. Employee Personal Information Registration Form; you can get this at the talent center in the district where the company is registered (for first-tier-city addresses, see bottom of article)
  3. A list of all the employees at your company
  4. The original copy of your company’s business license, and a photocopy
  5. The original copy of your local tax registration certificate, and a photocopy
  6. A spreadsheet showing how much your employees are paid, how much is paid into their insurance and housing fund, and any bonuses they have been paid
  7. Photocopy of insured employees’ ID cards



It takes about two months to get the new employee’s social insurance card ready, but they can begin working straight away and you will need to start paying into their social security account from their very first paycheck. 



Registering your employees with the housing fund

You can do this at any point in the process outlined above, or afterward. Go to the local Public Housing Fund Management Center (you can find addresses for the first-tier cities towards the bottom of this article) to set up a housing fund account. You will need the following documents, and it will take five working days to process: 



  1. Public Housing Fund Deposit Form, which you can get at the center 
  2. Your company’s business license and a photocopy 
  3. Your company’s organization code certificate and a photocopy 



Once the account is set up, you can place your employees’ personal accounts under your company account. The documents needed to do this are: 



  1. Personal Housing Fund Account Set-up Form, which you can get at the center
  2. A photocopy of the employee’s ID card



How to transfer your employees’ personal archives

Every Chinese citizen at birth is given a personal archive, which is stored at the same local talent center where their hukou is registered. When people move home from area to area – for study or for employment – their personal archives are transferred along with them, to the relevant talent center. 



In order for the employee to get a Personal Archive Transfer Letter, you should give them a letter (with your company’s official stamp or “chop”) stating that they work for your company, as well as a stamped copy of your company’s license. They will then take this to the talent center in which your company is registered (depending on the size of the city in which your business is registered, this will either be a city talent center or a district talent center). 



After the talent center has given them the Personal Archive Transfer Letter, the employee should take it and their ID card to the talent center where their personal archive is stored; the transfer will then be processed.



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