China: Online Registration, Point System Highlight Work Permit Reforms in China

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By Mark Melnicoe

China's recent introduction of a more robust green card and work permit system for foreign workers promises to ease the lives of expats, although some of the changes are coming slowly, participants in a Beijing-based webinar were told May 23.

A pilot program took effect last October in Beijing, Shanghai and several provinces, and on April 1 the system went nationwide. Highlights of the new regime include a point system for foreign workers that determines their likelihood of getting residence and work permits and an online registration system that should quicken the path to getting the permits.

“A variety of policies and regulations have been directed toward different groups of foreigners and specialists, and this has led to a lot of confusion among foreigners about where to apply and how to actually get these beneficial policies and what is actually required,” Torsten Weller, a business development associate with the ECOVIS tax and legal consultancy in Beijing, told the webinar.

The idea behind the new point system—which assigns a “grade” of A, B or C—is to bring everything into a single, unified framework, Weller said.

Grading System Rates Workers

The grading system is based on a 100-point scale, and those who score 85 or above are considered “A” material under the regulations issued by the Ministry of Public Security, which is in charge of foreign residents' affairs.

These generally are high-level executives—holders of high positions in academia or business. But young people who exhibit entrepreneurial or innovative talent can also qualify, as can “young and outstanding talent” with a degree from a Top 200 university or a Ph.D. from a Chinese university. Former top managers at S&P 500 companies also qualify.

Grade B (score of 60-85 points) encompasses most professionals now holding work permits in China, who in most cases must hold at least a bachelor's degree and have two years' work experience or hold a master's degree from a Top 100 university.

Grade C are mostly foreigners hired on a seasonal basis in nontechnical or service industries.

Other criteria are used to generate a score for each foreign applicant, such as salary, Chinese language fluency and length of work experience.

“The goal is to encourage A level foreigners to come to and work in China, exert control over B level foreigners and restrict/limit the C levels,” Grace Yang, an associate and Chinese employment law expert at Harris Bricken in Seattle, wrote in the firm's China Law Blog.

The policy reflects China's continuing drive to lure talent from abroad to fuel its push to a more sustainable economy driven by innovation and consumption. To avoid being stuck in a so-called middle-income trap, China has been moving away from the investment- and export-driven model that brought it from an economic backwater in the 1970s to the No. 2 economy in the world in just 30 years.

As neighboring countries peel off low-cost manufacturing with cheaper labor, China is moving up the value chain, producing its own commercial airliners, taking the global lead in clean-energy vehicles and generally upgrading its manufacturing as it seeks to create global brands in products ranging from mobile phones to e-commerce.

That requires more and more expertise from abroad, and the new policies underscore that need. Most professionals working in China are in engineering or IT fields, feeding the country's voracious appetite for technology.

Green Cards in Infancy

Green cards were introduced in China in 2004, but few have been issued. Out of an estimated 900,000 foreigners now living in China, fewer than 7,500 have been issued permanent residency. But recent numbers are up dramatically, with 1,576 foreigners approved for green cards last year, an increase of 163 percent over 2015.

Qualifications for obtaining a green card include working in certain “National Key Projects,” working four years in China, paying taxes for at least three years, earning a minimum 500,000 yuan ($72,500) and making tax payments of at least 100,000 yuan each year.

A new green card containing an electronic chip and valid for up to 10 years will become available this July, officials say.

The chip is aimed at making it easier for expats to do such seemingly mundane things as buy tickets for China's high-speed rail system or use mobile apps.

“When you want to do a simple thing like buy a train ticket, you always have to bring your passport, and there are a lot of things, like e-services, where foreigners actually cannot get a registration or cannot log in because they need an ID, and foreign IDs are not recognized,” Weller said. “So this foreign ID card, foreign work permit number should also help to solve these issues and make life easier for foreigners.”

Weller noted, however, that this is “one of the objectives and we're only at the start of this process.”

Advantages of holding a green card are numerous.

“Green card holders receive the same rights as Chinese citizens in areas such as education, social welfare, housing, business formation, banking and travel,” said the consulting firm Dezan Shira & Associates in a recent online brief.

As for work, green card holders “are able work in China without applying for a separate work permit,” the Dezan Shira brief said. “Green card holders are also allowed to participate in construction projects and science research projects that are associated with a high-level of security clearance, as long as it is approved by related governing bodies.”

Online Permit System Eases Applications

China's online work permit application process went nationwide April 13, and foreign workers in China for at least two consecutive years can now qualify for five-year permits—a big improvement over having to renew every year.

The online process “will be a service for companies and also for employees to upload their documents directly,” Weller told the webinar. The goal of the platform “on the one hand is to make it easier for Chinese authorities to share data on foreign employees in China and also for foreigners to upload their documents, even when they're not yet in China.”

Weller also noted, however, that the platform is currently only in Chinese, so “is not necessarily making it easier for expats here to upload their information from abroad.”

Still, the system should prove beneficial, Wang wrote.

“Under the new regime, the current foreign expert work license and foreigner employment license will be integrated into one document called the foreigner work license notice,” Wang said. “The original ‘alien employment permit’ and ‘foreign expert certificate’ will be integrated into one permit called the foreigner work permit. Every foreigner will have one permit number per foreigner work permit, which will be used by the same individual for life.”

In all, Wang wrote, “the application materials required for submission will be considerably fewer than previously, reducing by about half the documentation needed to submit.”

That's welcome news for foreigners in a country known for its thick maze of bureaucratic requirements for almost anything official.

Workers Over 60 Still Face Hurdles

Another common problem for foreign workers in China is bumping up against the country's age limit of 60—the normal retirement age for men. For women, most Chinese retire at 55.

The age limit doesn't apply for Grade A workers, but for others things can get tricky, Weller told the webinar.

“How do you solve this problem?” he said. “In this case you should consider making sure older foreign employees have a higher position. GM, director or legal representative. The higher the position, the more likely the foreign expat will get a work permit.”

Short of that, he said, “you should negotiate with the labor bureau.”

“It's not impossible but it might take quite a while and some negotiating skill to get a work permit for older expats.”

To contact the reporter on this story: Mark Melnicoe in Shanghai at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The Ministry of Public Security's announcement of policies to attract foreign talent to China is available in Chinese here.

For more information on Chinese HR law and regulation, see the China primer.

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