China’s Ex-Expats: Emerging Asia Beckons

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An examination of 20 alternative Asian cities for expats leaving China

Op-Ed Commentary: Chris Devonshire-Ellis

Nov. 18 – It seems likely that this coming Christmas will see the end of many China expatriates’ careers in China. Nervous of the recently introduced, and fairly high, mandatory social welfare contributions for foreigners, employers are cutting back on non-essential foreigners, and localizing these positions. Essential expats will remain, but those on the fringes and not able to offer much in terms of specific talent face culling. As China moves up the value chain, it simply does not need to have foreigners with little actual skills to offer. Returning Chinese can fill lower-middle management, and increasingly senior managerial roles, and the China expat is being squeezed out.

The impact on this will be felt by those that have recently graduated, or are aged to about 35 and haven’t yet found their way high enough up the corporate ladder. There are of course exceptions, but many in this age bracket will find their China career options coming to a close. Contracts will not be renewed, and many will face termination. The lucky will be relocated elsewhere within their existing employers. However, the future externally also looks rather bleak. Both the United States and European economies are in the doldrums, and unemployment is rising. Returning back may also be something of a waste – all that China experience down the drain. Here, employees need to make a decision – remain an expat, and continue to add to the adventure, or return home and take the chances of reabsorbing back into mainstream society. It’s not always easy, and especially for expats who have been overseas for five years or more – friends have moved on, and recent experiences are not compatible. Potential employers back home are not likely to be very interested in what you did in China, it’s just not relevant. That rejection is the downside of returning expats. All that experience has to be suppressed in order to meld back in.

However, if returning home isn’t either a viable or interesting option, the good news is that there are plenty of other opportunities elsewhere in Asia. In this article we give some snapshots of regional Asian locations that may be worth considering. For those who may be looking for alternative Asian employment destinations, these are the emerging Asia alternatives.

Bangkok, Thailand
City population: 5,104,476
Main industries: Tourism, jewelry trading, electronics, garments, computers, and logistics
National GDP (IMF, 2010, PPP): I$589.01 billion
National GDP Rank (IMF, 2010, PPP): 24/183
Mercer Quality of Living Rankings (2010): 118/221
Mercer Global Eco-City Rankings (2010): 191/221
Foreign Policy Global Cities Index (2010): 36/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 180/300
Individual income tax rates: 0 percent – 37 percent
Local social expat web site: Expat Arrivals – Bangkok
Business reading: Bangkok Post

Why it’s cool: A major Asian logistics hub, Bangkok is both a huge air and sea port but also crucial for getting product across land to Asia’s internal cities, together with an excellent tourism industry.

Colombo, Sri Lanka
City population: 648,034
Main industries: Gem cutting, food and tobacco processing, metal fabrication, engineering, manufacturing of chemicals, textiles, glass, cement, leather
National GDP (IMF, 2010, PPP): I$105.46 billion
National GDP Rank (IMF, 2010, PPP): 66/183
Mercer Quality of Living Rankings (2010): 147/221
Mercer Global Eco-City Rankings (2010): 131/221
Foreign Policy Global Cities Index (2010): Unranked
Xpatular.com’s Cost of Living Index (Oct. 2011): 186/300
Individual income tax rates: 4 percent – 24 percent
Local social expat web site: International Expat Association of Colombo
Business reading: The Colombo Times

Why it’s cool: Beautiful scenery, and now recovering and being rebuilt after a 30-year civil war, infrastructure improvements and city and port makeovers continue apace.

Dhaka, Bangladesh
City population: 10,356,500
Main industries: Leather footwear, textiles, IT, tourism, service, banking and finance
National GDP (IMF, 2010, PPP): I$260.54 billion
National GDP Rank (IMF, 2010, PPP): 43/183
Mercer Quality of Living Rankings (2010): 206/221
Mercer Global Eco-City Rankings (2010): 220/221
Foreign Policy Global Cities Index (2010): 64/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 292/300
Individual income tax rates: 0 percent – 25 percent
Local social expat web site: InterNations Dhaka Expat Community
Business reading: The Daily Star

Why it’s cool: Home to a lot of Asia’s textile industry and sandwiched between China and India, Bangladesh is increasing its exports exponentially.

Jakarta, Indonesia
City population: 8,540,121
Main industries: Financial services, trade, tourism, electronics, chemicals, automotive, mechanical engineering and biomedical sciences
National GDP (IMF, 2010, PPP): I$1.03 trillion
National GDP Rank (IMF, 2010, PPP): 15/183
Mercer Quality of Living Rankings (2010): 141/221
Mercer Global Eco-City Rankings (2010): 173/221
Foreign Policy Global Cities Index (2010): 53/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 99/300
Individual income tax rates: 5 percent – 30 percent
Local social expat web site: Living in Indonesia
Business reading: The Jakarta Post

Why it’s cool: The trade hub for Java, and an Indonesian population that is both a huge market in its own right and a competitor to China manufacturing.

Hanoi, Vietnam
City population: 1,431,270
Main industries: Agriculture, tourism, trade, finance and banking
National GDP (IMF, 2010, PPP): I$277.39 billion
National GDP Rank (IMF, 2010, PPP): 40/183
Mercer Quality of Living Rankings (2010): 151/221
Mercer Global Eco-City Rankings (2010): 137/221
Foreign Policy Global Cities Index (2010): Unranked
Xpatular.com’s Cost of Living Index (Oct. 2011): 254/300
Individual income tax rates: 5 percent – 35 percent
Local social expat web site: Expat Arrivals – Hanoi
Business reading: The Hanoi Times; Vietnam Briefing

Why it’s cool: Sitting on the main intra-Asian rail and logistics line that connects China all the way through to Singapore, Hanoi is a regional business hub for Indochina.

Ho Chi Minh City, Vietnam
City population: 3,467,331
Main industries: Mining, seafood processing, agriculture, tourism, finance and banking, construction, electronics, and high-tech industries
National GDP (IMF, 2010, PPP): I$277.39 billion
National GDP Rank (IMF, 2010, PPP): 40/183
Mercer Quality of Living Rankings (2010): 150/221
Mercer Global Eco-City Rankings (2010): 154/221
Foreign Policy Global Cities Index (2010): 61/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 271/300
Individual income tax rates: 5 percent – 35 percent
Local social expat web site: So Saigon
Business reading: Saigon Today; Vietnam Briefing

Why it’s cool: Access to deep water ports for export, and through to Cambodia make HCMC more an export-driven economy than Hanoi, while retaining its French and Southeast Asian culture.

Kathmandu, Nepal
City population: 1,442,271
Main industries: Tourism, foreign trade, agriculture, services sector, and handicrafts
National GDP (IMF, 2010, PPP): I$35.79 billion
National GDP Rank (IMF, 2010, PPP): 97/183
Mercer Quality of Living Rankings (2010): Unranked
Mercer Global Eco-City Rankings (2010): Unranked
Foreign Policy Global Cities Index (2010): Unranked
Xpatular.com’s Cost of Living Index (Oct. 2011): 289/300
Individual income tax rates: 1 percent – 40 percent
Local social expat web site: Visit Nepal
Business reading: The Himalayan Times

Why it’s cool: A Himalayan trade center, shortly to be connected to China via rail through Tibet, while remaining a much loved tourist destination.

Kolkata, India
City population: 4,631,392
Main industries: Information technology, retail, hospitality, electronics, food processing, mining, heavy engineering, and textiles
National GDP (IMF, 2010, PPP): I$4.06 trillion
National GDP Rank (IMF, 2010, PPP): 4/183
Mercer Quality of Living Rankings (2010): 145/221
Mercer Global Eco-City Rankings (2010): 218/221
Foreign Policy Global Cities Index (2010): 63/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 182/300
Individual income tax rates: 0 percent – 30 percent
Local social expat web site: Kolkata Fun
Business reading: The Calcutta Telegraph; India Briefing

Why it’s cool: The largest Chinese population in India, and looking to reestablish itself as the major port servicing East India, Bangladesh and Burma trade.

Kuala Lumpur, Malaysia
City population: 1,453,975
Main industries: Chemicals, textiles, food and tobacco processing, tourism, and trade
National GDP (IMF, 2010, PPP): I$416.54 billion
National GDP Rank (IMF, 2010, PPP): 29/183
Mercer Quality of Living Rankings (2010): 74/221
Mercer Global Eco-City Rankings (2010): 96/221
Foreign Policy Global Cities Index (2010): 48/221
Xpatular.com’s Cost of Living Index (Oct. 2011): 202/300
Individual income tax rates: 0 percent – 26 percent
Local social expat web site: Expatriate Malaysia
Business reading: New Straits Times

Why it’s cool: Asia’s Islamic center, a significant manufacturing base, and a Southeast Asian business hub mixed with a tolerant attitude make KL one of Asia’s great cities.

Manila, Philippines
City population: 10,444,527
Main industries: Chemicals, textiles, food and tobacco processing, furniture, light manufacturing, tourism, and trade
National GDP (IMF, 2010, PPP): I$368.55 billion
National GDP Rank (IMF, 2010, PPP): 32/183
Mercer Quality of Living Rankings (2010): 128/221
Mercer Global Eco-City Rankings (2010): 172/221
Foreign Policy Global Cities Index (2010): 51/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 153/300
Individual income tax rates: 5 percent – 32 percent+
Local social expat web site: Expat in the Philippines
Business reading: The Manila Times

Why it’s cool: Textiles, furniture, light manufacturing and even film production make this one of Asia’s most hectic destinations.

Moscow, Russia
City population: 12,691,836
Main industries: Engineering, diamond polishing, finance, information technology, healthcare, and tourism
National GDP (IMF, 2010, PPP): I$2.23 trillion
National GDP Rank (IMF, 2010, PPP): 6/183
Mercer Quality of Living Rankings (2010): 170/221
Mercer Global Eco-City Rankings (2010): 203/221
Foreign Policy Global Cities Index (2010): 25/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 9/300
Individual income tax rates: 13 percent – 35 percent
Local social expat web site: The Moscow Expat Site
Business reading: The Moscow News; Russia Briefing

Why it’s cool: Ok, we know it’s not strictly in Asia, but if you’ve been based in Beijing it’s a fair call. Russia is about to join the WTO and is the largest single country not yet a member. The trade opportunities with both China, India, Western Europe and the United States are likely to explode.

Mumbai, India
City population: 12,691,836
Main industries: Engineering, diamond polishing, finance, information technology, healthcare, and tourism
National GDP (IMF, 2010, PPP): I$4.06 trillion
National GDP Rank (IMF, 2010, PPP): 4/183
Mercer Quality of Living Rankings (2010): 144/221
Mercer Global Eco-City Rankings (2010): 215/221
Foreign Policy Global Cities Index (2010): 46/221
Xpatular.com’s Cost of Living Index (Oct. 2011): 139/300
Individual income tax rates: 0 percent – 30 percent
Local social expat web site: Bombay Expats
Business reading: Times of India; India Briefing

Why it’s cool: India’s financial center and home to the country’s wealthiest. Looking out onto the Middle East and Africa mean Mumbai’s time as a world center for trade is being re-engineered for the 21st Century.

New Delhi, India
City population: 10,927,986
Main industries: Leather footwear industry, high-tech industries, tourism, service industry, banking and finance
National GDP (IMF, 2010, PPP): I$4.06 trillion
National GDP Rank (IMF, 2010, PPP): 4/183
Mercer Quality of Living Rankings (2010): 143/221
Mercer Global Eco-City Rankings (2010): 213/221
Foreign Policy Global Cities Index (2010): 45/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 179/300
Individual income tax rates: 0 percent – 30 percent
Local social expat web site: Expat Arrivals – New Delhi
Business reading: News of Delhi; India Briefing

Why it’s cool: India’s capital city, with all the ministries, is receiving a massive make-over in the wake of India’s emergence as a trading giant.

Phnom Penh, Cambodia
City population: 1,573,544
Main industries: Real estate, trading, tourism, garments, and service sector
National GDP (IMF, 2010, PPP): I$30.27 billion
National GDP Rank (IMF, 2010, PPP): 103/183
Mercer Quality of Living Rankings (2010): 190/221
Mercer Global Eco-City Rankings (2010): 158/221
Foreign Policy Global Cities Index (2010): Unranked
Xpatular.com’s Cost of Living Index (Oct. 2011): 298/300
Individual income tax rates: 0 percent – 20 percent
Local social expat web site: Cambodia Expat
Business reading: The Phnom Penh Post

Why it’s cool: Spilling inland from Vietnam’s east coast, Cambodia’s cheaper workforce is attracting high labor industries from across Asia.

Seoul, South Korea
City population: 10,349,312
Main industries: Electronics, finance and banking, technology, auto manufacturing, service sector, and tourism
National GDP (IMF, 2010, PPP): I$1.47 trillion
National GDP Rank (IMF, 2010, PPP): 12/183
Mercer Quality of Living Rankings (2010): 81/221
Mercer Global Eco-City Rankings (2010): 93/221
Foreign Policy Global Cities Index (2010): 10/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 29/300
Individual income tax rates: 6 percent – 35 percent
Local social expat web site: Korea4Expats
Business reading: The Seoul Times

Why it’s cool: A Western standard city on the front line, Korea’s auto and high-tech industries are world class.

Singapore
City population: 3,547,809
Main industries: Trade, finance and banking, tourism, service sector, foreign exchange trade, and logistics
National GDP (IMF, 2010, PPP): I$292.83 billion
National GDP Rank (IMF, 2010, PPP): 39/183
Mercer Quality of Living Rankings (2010): 28/221
Mercer Global Eco-City Rankings (2010): 22/221
Foreign Policy Global Cities Index (2010): 8/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 22/300
Individual income tax rates: 0 percent – 20 percent
Local social expat web site: Singapore Expats
Business reading: The Straits Times

Why it’s cool: The financial center for Southeast Asia, with low taxes attracting everyone on all sides from China, ASEAN and India.

Taipei, Taiwan
City population: 7,871,900
Main industries: Finance and banking, transportation, logistics industry, publishing, tourism, and service sector
National GDP (IMF, 2010, PPP): I$824.67 billion
National GDP Rank (IMF, 2010, PPP): 19/183
Mercer Quality of Living Rankings (2010): 85/221
Mercer Global Eco-City Rankings (2010): 124/221
Foreign Policy Global Cities Index (2010): 39/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 69/300
Individual income tax rates: 5 percent – 40 percent
Local social expat web site: Taipei Life
Business reading: The Taipei Times

Why it’s cool: A microcosm of China, Taiwan is a great place to be re-introduced to Chinese culture, with a more international perspective among its population.

Tokyo, Japan
City population: 8,336,599
Main industries: Finance and banking, transportation, logistics industry, publishing, tourism, and service sector
National GDP (IMF, 2010, PPP): I$4.32 trillion
National GDP Rank (IMF, 2010, PPP): 3/183
Mercer Quality of Living Rankings (2010): 40/221
Mercer Global Eco-City Rankings (2010): 59/221
Foreign Policy Global Cities Index (2010): 3/65
Xpatular.com’s Cost of Living Index (Oct. 2011): 1/300
Individual income tax rates: 15 percent – 50 percent
Local social expat web site: Tokyo Expat World
Business reading: The Japan Times

Why it’s cool: Recovery from the Tsunami and the ensuing aftermath now underway, this high-end destination remains an expatriate delight, and especially so within financial services.

Ulaanbaatar, Mongolia
City population: 844,818
Main industries: Tourism, mining, handicrafts, and electric power generation
National GDP (IMF, 2010, PPP): I$11.08 billion
National GDP Rank (IMF, 2010, PPP): 141/183
Mercer Quality of Living Rankings (2010): Unranked
Mercer Global Eco-City Rankings (2010): Unranked
Foreign Policy Global Cities Index (2010): Unranked
Xpatular.com’s Cost of Living Index (Oct. 2011): 266/300
Individual income tax rates: 15 percent – 20 percent
Local social expat web site: Mongol Expat; Mongolia Expat
Business reading: Mongolia Briefing

Why it’s cool: Wild, all about mining, yet growing wealthier by the minute, Mongolia’s 2.5 million nomads will be the first multi-millionaires of Siberia.

Vientiane, Laos
City population: 196,731
Main industries: Tourism, handicrafts, and trade
National GDP (IMF, 2010, PPP): I$15.77 billion
National GDP Rank (IMF, 2010, PPP): 129/183
Mercer Quality of Living Rankings (2010): 169/221
Mercer Global Eco-City Rankings (2010): 119/221
Foreign Policy Global Cities Index (2010): Unranked
Xpatular.com’s Cost of Living Index (Oct. 2011): 264/300
Individual income tax rates: 0 percent – 25 percent
Local social expat web site: Retire Asia – Vientiane
Business reading: The Vientiane Times

Why it’s cool: Laid back, yet charming, Vientiane offers much for the exploratory expatriate who speaks French and understands agriculture and off the trail tourism.

Summary
As China looks set to undergo a transition of relatively lower growth (7 percent annually over the next decade is projected), it also has to cater for an aging workforce. China’s workforce problem is in fact so severe that expatriates are now being seen as undesirable. Being a China expatriate is also becoming more expensive, and that will impact on the nature and quality of available positions. While this bodes poorly for the China career of many individuals, the good news is that alternative destinations right across Asia are booming. It may take some getting used to, but Mongolia currently has the world’s fastest GDP growth rates of some 30 per cent annually; while the expatriate population in the capital city of Ulaanbaatar is expected to reach 250,000 by 2016. Improved facilities and infrastructure will go hand in hand with that – and much will be provided by those same expatriates.

On the other hand, Southeast Asia is also seeing rapid growth. The success of Vietnam in terms of winning manufacturing business from China is already well understood, and is set to further increase. That is having additional impacts on locations such as Cambodia and even land-locked Laos, where the price of labor is lower still than in Hanoi. Labor intensive industries are already examining these options and many are putting down roots. India, meanwhile, is booming. And although the country is currently relatively expensive in terms of tax, it is about to go through tax reforms which should see these significantly reduced within the next two years. Cities such as Mumbai and Delhi are being reinvented as regional hubs, while Chennai and Bangalore are the new destinations for auto and IT, respectively. Meanwhile, we’ve included Moscow despite the fact it isn’t Asian – but it has very strong trade connections with Central Asia, China, and even Southeast Asia. These will only strengthen – Russia is about to join the WTO and we are all aware of how much that impacted upon China a decade ago. While it may be regrettable or even inconvenient for some that China careers may be coming to an end, the good thing is that Asia offers plenty of options. We look forward to seeing many of our China Briefing readers elsewhere in Asia over the next few years.

Chris Devonshire-Ellis is the principal and founding partner of Dezan Shira & Associates. He began the firm in China in 1992; it has now expended and has eleven offices across China, five in India, two in Vietnam and one each in Hong Kong and Singapore. Please contact the practice at asia@dezshira.com or visit the firm at www.dezshira.com.

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Increased Expat Costs in China Will Relocate Many to India

24 Responses

  • Solid review. FYI: next Monday, 21 November, I will publish (on http://www.businesstrendsasia.com) an article titled “Asian economies “emerging” for decades”, whereby I describe the hurdles when evolving from an emerging economy to a developed economy. The former Asian Tigers have been “emerging” since the early-Nineties of last century. Only Singapore managed to join Japan, Taiwan and South-Korea as a true developed economy. The former Tigers (that time still without China and India) have not progressed substantially compared with pre-1997 (Asian financial crisis) levels.

  • Joel says:

    Thank you for the article, I’ve read it from the beginning to the end yet failed to see the connection between the collection of countries and the coming unemployment of various foreigners. That is, other than “look there are some other places on the globe, go and try your luck!”. What benefit is a non-essential-expat experience in china to someone working in India? I’m asking this as I really have no idea. So you have someone under 35 or a younger lass with a couple years of China experience, how is that worth anything to an employer in any of the above countries? In some of these places the environment is so different than China, it’s similar to just getting someone from “back home”. Thailand for example, has always been a dream destination for expats and the competition to get an expat position there is fierce, what would change now? In other words: could you be so kind to give those unfortunate non essential non Chinese foreigners some practical tips from your wealth of experience?

  • Joel says:

    Pardon, another question as something is not clear to me.

    Going by common sense it seems more likely that employers will offer to reduce salaries to cut cost and many expats would accept it and the cost issue will be solved (considering the situation “back home” as you describe it)

    Of course I am not counting here all those over-compensated expats which probably should have been let go earlier anyhow regardless of the new regulation.

    My reasoning:
    1. It’s actually easier to fire expats if they were hired back home in a country which allows it, compare this to firing locals…
    2. These days locals get salaries in some positions compared to and even more than some European countries and their salaries only goes up. Considering that for foreigners the prospects back home are not all that exciting in the long run their cost could be in fact lower than the locals. Expats are also less likely to jump jobs every three months and so on.

    Having said all that, I’m sure you are right, just trying to figure it out.

  • Chris Devonshire-Ellis says:

    We’re just describing options to those who may soon be dispossessed. Kind of an Asian Lonely Planet for the unemployed. No need to look too much more into it than that.
    Thanks – Chris

  • Fred G. says:

    Sorry but this article is a bit pointless. As Joel points out, why does the author think that any of these countries wants or needs a mass diaspora of unemployed, unskilled westerners. At the very least, the author could have explained the work visa regulations for each country, because I’m sure it’s not as easy as “hey, I’m white, let me in and give me a job.”

    But the article is correct in saying that China no longer needs nor wants us here. As they have demonstrated for the past decade, the Chinese have no interest in quality, and they can easily just steal our intellectual property, which essentially makes all of our jobs here irrelevant.

  • Chris Devonshire-Ellis says:

    Well I would have thought that a lot of expats in China would have learned a lot from their time in the country, and that much of that expertise could be utilized in other Asian economies should their employers chose to let them go. The message is simply this: there are alternatives throughout Asia for expats with China experience. That’s it. Thanks – Chris

  • Didier BOON says:

    How sad to read this comment from Fred G.
    Indeed Chinese will learn from you. Indeed they want to gain experience and follow your tracks to success. But that is the point. Isn’t it? Be the leader, the innovator, day after day, year after year…And this is not easy. Is it? Well, once one become “obsolescent”, it is time up for you my friend! And it is time to leave behind your fat pay checks, free private school, free mansions and all other freebies that you would never had enjoyed home and, if your employer let you go, it seems that your were not really worth it.
    I think this article is correct and is a good guide to alternative cities where one could live after Beijing or Shanghai.

  • Robert says:

    I actually didn’t know that they were going to require expats to pay into the social welfare system, but I am assuming that my company would pay for it. If I have to pay for it, I would demand a pay raise to offset the costs. Otherwise, I would learn willingly. For my position in my current company, I doubt they can find a Chinese national who can fill it. Maybe they could find a returning Chinese. To that, I would tell them good luck. China won’t last long without foreign talent. But, considering the xenophobia in this country, it wouldn’t suprise me if they tried. I would had south to Singapore and watch from afar as the country collapses. Then I would remind them of the history lessons they should have learned from the Qing Dynasty.

  • Robert says:

    Sorry a few typos in my post. I’m sure you all can see them.

  • Chris Devonshire-Ellis says:

    @Robert – both the employer and the employee (you) will have to pay social insurance. Actually it seems to be applicable from mid October, so you’re potentially already liable. We wrote about this issue here: http://www.china-briefing.com/news/2011/10/17/china-expat-mandatory-welfare-payments-%e2%80%93-fescos-expectations.html and likely contributions required from employers and expat employees here: http://www.china-briefing.com/news/2011/09/13/foreigner-participation-in-chinas-social-insurance-system-now-mandatory.html.

    This means that your employer already has to pay more for your services next year in any event, and you asking for a rise will also mean he has to pay still higher social welfare. It’s likely to be resisted. That is why I wrote this article as we anticipate a number of expatriates may not be re-engaged in China from either this year end or when their contracts become due for renewal. – Chris

  • Joel says:

    I don’t think this article was pointless at all, it at least opens the door for a discussion. I was simply hoping for some practical advice from Chris.

  • Chris Devonshire-Ellis says:

    @Joel – my view is that a number of expatriates in China will not be here for much longer for the reasons described both in the article and in the comments provided. That extends to all expats, regardless of nationality. Those that may be affected by the new policies in China that could affect their employment will probably already be aware of their position. Those that are secure will know this also. If its not looking positive for China, this article’s main body outlines some of the alternative locations in Asia that could use, in many cases, expatriates with experience of working in China. Every cloud has a silver lining. Thanks – Chris

  • Chris Devonshire-Ellis says:

    @Fred G: it’s not just an issue that affects, as you put it “white” expats. The policies are non discrimatory concerning race or nationality. Concerning other countries visas policies, this issue is so complex we admittedly did not include it – which is why we gave links to local expat sites in each of the cities concerned so interested readers could visit, and enquire in each locality the visa situation in each. Some are easier than others. Thanks – Chris

  • Tim says:

    Nice post; in particular liked the Asia city round up. Next year will be one to watch to see if the new social benefit scheme is the tipping point for an exodus of expats.

    Just as an aside, there have been a number of articles declaring the decline of the expat in China since the end of the 90’s and we seem to get one each year citing the increase of returning Chinese, improvement of management skills, localization efforts as the reason for the expat becoming a rare site in China. Yet, if you look at global mobility reviews, China is often at the top of the list as a destination for expat assignments.

    Nonetheless, it will happen at some point and I tend to agree with Chris that SE Asia will be a region to watch.

  • jan says:

    Hi,
    Great article, and thanks for mentioning my website.
    I try to write about my experiences as an expat in the Philippines. Funny remarkable things, but also valuable information for other expats or those who want to be.
    Jan

  • Chris Devonshire-Ellis says:

    @Tim – I suspect many of the “expats” you talk about are returning Chinese – with foreign passports. They are now displacing the non ethnically Chinese expatriates. Thanks – Chris

  • Scott says:

    This article is missing any level of detail and therefore has a “scare factor”. The new insurance law has a cap at x3 the average local salary. In Shanghai the rates are 11% and 37.3% for employees and employers respectively, the cap being 300% of the cities average monthly wage. Example in Shanghai, Shanghai employee will pay a maximum of 1,286rmb and the employer 4,325rmb. If an employee/employer cannot afford these fees (Lets keep in mind Shanghai driving plates costs >50,000rmb and the price of rent in the city) well that company need to localize and the non Chinese employee should really find a better suited position.

    Personally I feel paying the tax is fair. If implemented correctly. For at present meritocracy in China is a non starter, and one would hope a higher level of tax will create a fairer society. (think of Norway, Germany, Sweden, Japan)

    Brgds Scott

  • alyip says:

    For those expats who plan to stay behind in China to start-up a business, does this new contribution apply to the business owner if the business owner does not take a salary, but on profit taking.

  • Chris Devonshire-Ellis says:

    @Scott – Well this article is less about China and more about alternatives. But as you bring up the subject of China – you think that employers enjoy a 300% cap? I don’t think so. You may also wish to consider that the cap may in fact be totally removed – its already happened in Dalian. See: http://www.china-briefing.com/news/2011/10/19/cap-on-employer-portion-of-welfare-contributions-may-be-removed.html
    @Alyip – yes, the employer has to pay. In fact you are legally bound to pay yourself (even as business owner) a salary in China.
    Thanks for your comments – Chris

  • Robert says:

    Scott,

    This specific tax is about 10 to 11 percent of your income up to the cap (if there is a cap). But, the company is still paying the tax that has been in place since foreigners started working in China. On top of that, foreigners are paying sometimes four times what the Chinese pay, if you include your contribution and the company’s contribution. So, this isn’t a fair tax by any means. Just because you don’t see the tax number on your pay stub doesn’t mean the company isn’t paying the tax for foreign workers.

    Also, my company told me that if I left china, I could get the retirement funds back. I have 2 points: first, inflation will eat at any of the savings leaving me to lose money in the end. Second, I have worked in China for 7 years and everytime the government says you can get your money back, we should all be skeptical. I asked my company’s HR how to get the money back when I do leave China and they said it is “difficult”. Then they went on to explain that you need this and that paper. From my experience that means that the government will say you didn’t have all the papers necessary and therefore you can’t get your return. It has happened many many times to myself.

    I would still suggest all foreigners to ask for a raise from their companies. I did. If the companies realize how much of a burden this will be, they can petition the government to stop the law. It has happened before with visa issues during the bloody beijing olympics. It can happen again.

    In the end, maybe they will try to replace us all with “returning China.” I seriously doubt that. But if it does happen, ce la vie. We will see the Chinese economy crash faster than economists could predict. I know my company is already being threatened by our client to move the business to singapore since our Chinese staff can’t handle the international business. Without the little foreigners there, that will happen and China will lose business.

  • Chris Devonshire-Ellis says:

    @Robert – Thanks for your thoughts. I’m not as optimistic as you however over the need for China to maintain the current level of expats, nor as pessimistic over the outcome. – Chris

  • Frank deBoer says:

    An awesome piece and I suspect you’ve woken up some China expats with that comparison. I liked the “Why it’s cool” summaries. A very interesting angle on what Asia offers.

  • Chris Devonshire-Ellis says:

    I suspect that after Christmas and the Chinese New Year many previous China based expats may be conspicuous by their absence from China. It’ll be interesting to observe – if it’s at all possible – where many of them will end up. I’d bet Singapore (if they can get in) and Vietnam would be primary destinations, with Bombay for the more adventurous and committed.
    @Frank – thanks for your kind words.
    Happy New Year – (wherever you may be) – Chris

  • R. Souter says:

    Now its May did anyone notice a whole bunch of expats not here after New Year? I did.

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