China

International companies in China and India are struggling to find local employees with required technical skills and managerial experience.

Accusations of exploiting their workers through underpayment or forced overtime have put pressure on foreign companies in China to improve work conditions for their employees.

China has begun to see a surge in workers that are submitting naked resignations, a phenomenon that began in 2011. With naked resignations, workers quit their current job before securing another job and use that time to develop personal interests.

Recently, the Chinese government and the All-China Federal Trade Unions (ACFTU) have begun to escalate their avid promotion of collective wage bargaining.

In an effort to cut down on production costs, Chinese companies are relocating inland from coastal cities in order to take advantage of the lower wages in inland cities. Companies hope this will result in a significant rise in operating-profit margins.

A new law that went into effect on October 15, 2011 mandates that Chinese foreign expatriates need to participate in China's Social Security System. This law is anticipated to affect the 232,000 foreigners that have work permits in China.

More than ever, the central government, the All-China Federation of Trade Unions (ACFTU), and local governments are working to encourage unionization.

In light of China's rapid economic growth, there is a dramatic rise in social unrest. In 2010, as the Chinese economy grew 10.3%, there were over 180,000 protests against the government that mainly stemmed from outrage over economic injustices.

On July 1, 2011, a new Social Insurance Law was implemented by the Chinese government that will, in theory, affect all employers in China.

As a result of wage increases in China, Western companies are experiencing higher production costs. This has prompted low-end export manufacturing to shift from China to other Asian countries, like India and Vietnam.

On July 1, 2011, the China's government instituted a pension program benefiting its unemployed urban residents. This new program is one of two programs that China installed in an effort to establish full pension coverage for the Chinese population.

Chinas retirement age policy has not changed in the last 56 years. Since 1955, men have retired at age 60, female civil servants have retired at age 55, and female workers at age 50.

Major provinces in China are seeing increases in minimum wages. This is due to rising inflation and labor shortage as China continues with very high growth.

While more than one third of Japans graduates this year are still struggling to secure jobs, a number of leading Japanese enterprises operating in Japan are looking favorably upon graduates from China.

On December 24, 2010, China's State Council issued an amendment to the regulation governing work-related injury insurance. In many ways, the scope of the insurance has been enlarged.

Despite Chinas low unemployment rate (4.2% as of the end of last year), graduates of provincial colleges are flooding big cities like Beijing, spending months searching for the ideal job that just is not there.

Chinas Supreme Peoples Court recently released figures indicating a sharp increase in the number of labor disputes entering Chinese courts.

The lure of working for foreign firms seems to be weakening among recent graduates in China, according to a survey released by ChinaHr.com, a well-known local job board in China.

A recent survey published by the Wall Street Journal showed that blue collar manufacturing wages in China are now three times those in Vietnam.

In July 2010 the All-China Federation of Trade Unions (ACFTU), Chinas government-affiliated trade union body, announced that union leaders throughout the country will begin to receive their salaries directly from unions, rather than from companies.

On June 15, 2010 strikes at one of Honda Motors' manufacturing plants in southern China's Guangdong Province began to subside.

A recent court decision in Beijing fined a foreign software company for firing a local Chinese employee in 2008 after she established a trade union at the company without notifying the company.

Effective January 4, 2010 the Chinese State Administration of Industry and Commerce (SAIC) and the Ministry of Public Security released new requirements for foreign representative offices in China.

In February 2010, officials in Chinas Jiangsu province announced a 13% increase in minimum wages from 850 RMB (about US$124.51) to 960 RMB (about US$140.62) per month.

According to a recent announcement, Beijing authorities plan to relax the countrys strict visa issuance policy. More expatriate workers will now be allowed into China than ever before.

A December 2009 study released by global consulting firm, Mercer, indicates that multinational companies sent fewer expatriates to work in China in 2009 than in previous years.

On November 10, 2009 the Shanghai Municipal Human Resources and Social Security Bureau announced that, for the first time, expatriates employed in the city will be allowed to join the municipal social security program.

In September 2009, the Shanghai Peoples High Court released clarifications on regulations related to severance pay.

A recent study states that reports of employee fraud are on the rise in both Hong Kong and mainland China.

Recent news reports from Hong Kong suggest that local tax authorities in several regions of mainland China that are home to large numbers of multinational companies have initiated new tax audit programs.

Labor dispute cases are on the rise in China. In 2008, workers filed over 693,000 complaints with Chinese authorities. This represents a 98% increase over 2007.

On April 17, more than 7,000 workers went on strike in Dongguan, China. Strikes in this southern Chinese city, in the heart of heavily industrialized Guangdong province, have become increasingly common in recent years.

Increased hiring is good news for Chinas 5.5 million 2008 graduates of higher institutions of learning. Almost one year after graduating, more than 30% of these individuals are reportedly still out of work.

Since the implementation of the Labor Contract Law, enforcement has varied widely according to location. However, the Chinese government recently reported that 93% of workers at large enterprises have now signed written contracts with their employers.

In late February 2009, the Chinese State Council announced plans to loosen household registration requirements as part of a job stimulus package aimed at mitigating the effects of the slowing economy.

The global downturn in the economy is not leaving China untouched. On February 1st, Chinas central government issued a statement warning that 2009 could be possibly the toughest year since the Asian Financial Crisis more than a decade ago.

The Legislative Council of Chinas Special Administrative Region of Macau approved an overhauled labor law. The Labor Relations Law, which is intended to offer workers more protections, is predicted to boost the cost of labor in Macau.

The worldwide economic downturn combined with more employee-friendly labor regulations has affected many foreign companies doing business in China. The government has enacted measures to ease the burden on employers.

On September 3, the State Council, Chinas cabinet, approved the Implementation Regulations for the Peoples Republic of China Law on Employment Contracts. These regulations govern the enforcement of the new Labor Contract Law.

As more foreign companies expand into China, many are finding that locals are oftentimes a better match than expatriates for mid-level to senior-level management positions.

According to a recent survey, salaries in Chinas urban areas increased by nearly 14% during the first half of 2008. This compares to an increase of only 9% during the same period in 2007.

In June 2008, the All-China Federation of Trade Unions (ACFTU) launched a 3-month national unionization campaign focused on Fortune Global 500 firms operating in China.

Labor authorities in Chinas Guangdong province announced recently that province-wide minimum wage levels will soon be raised by as much as 30%. Current regulations divide the province into five minimum wage categories.

In May 2008, the Chinese Legislative Affairs Office released its first draft of new Implementation Regulations for the 2008 Labor Contract Law. The Labor Contract Law became effective on January 1, 2008.

Last month, Chinas State Administration of Foreign Exchange (SAFE) issued its approval for Proctor & Gamble China to issue offshore stock options to its local Chinese employees. This is the first such approval in China.

Chinas Ministry of Labor and Social Security (MOLSS) recently announced plans to issue a draft of a new national labor regulation on salaries.

On January 1, 2008, a new Labor Contract Law took effect in China. The law, which was approved by the National Peoples Congress in June 2007, aims primarily to protect the interests of blue collar workers.

As a ripple effect of the new Chinese Labor Contract Law (effective January 1, 2008), Chinas legislature adopted a law on labor disputes and arbitration on December 29, 2007.

Recent studies show that China and India are failing to equip university students with the necessary skills to qualify for specialized jobs available in their countries.

As part of security measures in preparation for the 2008 Summer Olympics in Beijing, the Chinese government has strengthened enforcement of visa regulations for foreigners living in the capital city.

The Chinese education system has long been regarded as one of the most rigorous in Asia. MBA programs, however, are still relatively new to China and have yet to gain favor among multinational companies.

Chinas Ministry of Labor and Social Security (MOLSS) recently launched a scheme that alters contribution methods to employee pension funds.

In early July 2007, Chinas legislature passed a new labor law strengthening protection for workers.

China has recently promulgated a regulation that aims to attract high-level overseas Chinese talent to return to China after completing education abroad.

A new set of rules on employment of people with disabilities in China came into effect on May 1, 2007 to improve the employment situation and protect the rights of the disabled.

In March 2007, the New Express Daily, a mainland Chinese newspaper, published a report claiming that several large US corporations are underpaying local Chinese employees.

For many years, unions have been very weak or non-existent in China. It was only after Wal-Marts adoption of unions in the summer of 2006 that most foreign companies in China began to take unionization seriously.

In February 2007, the latest draft of Chinas Labor Contract Law was released to the public. This revision contains several significant changes from the original version, which was issued in March 2006.

While favor for stock options in the United States has been declining in recent years, it is a relatively new phenomenon with rising popularity in China.

In November 2006, the Chinese Ministry of Labor and Social Security (MOLSS) released plans to intensify reforms of the current unemployment insurance system.

More Hong Kong residents are looking to China for better job opportunities. Chinas economy is growing at a rapid pace and the country has a shortage of local talent with international business experience.

In November 2006, the Chinese government released new filing requirements for personal income tax. Previously, employees were not required to file individual income tax returns. Employers simply withheld taxes from their employees paychecks.

The All-China Federation of Trade Unions (ACFTU) says that 300 new unions in foreign companies were formed since July 29, 2006, and that it is on track to unionize 60% of foreign companies by the end of the year and 80% by the end of 2007.

As Chinas economy grows rapidly, understanding of its economic diversity is necessary to succeed there.

According to a recently proposed amendment to Chinas Trade Union Law, all foreign-invested companies in China would be required to establish labor unions as part of the All-China Federation of Trade Unions (ACFTU).

Amid Chinas rapid urban growth and rampant speculation, housing prices have climbed steeply in recent years.

On July 1, 2006, the minimum wage in Shenzhen will increase by over 17% in the citys special economic zone (SEZ) and by over 20% in the surrounding suburbs.

Chinas State Council recently announced that it will impose new measures to restrict the number of university graduates in China.

Over the past ten years, China has become the favorite location of foreign companies. Specifically, Guangdong Province in Southern China is home to millions of foreign company factories that manufacture cheap goods such as clothing, toys, and shoes.

China's National People's Congress (NPC) issued a draft of a new Labor Contract Law on March 20, 2006. After the announcement, several foreign companies expressed concern because the new regulation will give more power to state-run trade unions.

In response to the growing demand in China for western-educated MBA graduates, several top western business schools have developed joint programs with Chinese business schools.

Health insurance targeted specifically at expatriates in China will be launched in mid-2006. Currently, there are very few, if any, global healthcare insurance solution available to expatriates in China.

In 2005, there has been a growing trend among multinational firms in China to employ Western-educated Chinese returnees to fill shortages of skilled labor. Companies understand that employing returnees instead of Western expatriates is a good investment.

The Chinese State Administration of Taxation (SAT) began its crackdown on income tax evasion when Circular 120, Administrative Measures for PRC Individual Income Tax, took effect on October 1, 2005.

A new social security tax for residents of Taiwan, Hong Kong, and Macau working in mainland China took effect on October 1, 2005. This new tax policy was first issued by the Chinese Ministry of Labor and Social Security (MLSS) in June 2005.

According to a report published in October 2005 by McKinsey & Company, China is not producing enough well-trained graduates who are suitably qualified to work for global companies.

Earlier this summer, the China Securities Regulatory Commission (CSRC), the Chinese stock market regulator, wrote draft rules that will permit Chinese companies to compensate their employees with incentives such as stock options and warrants.

Salaries of Indian workers increased by nearly 15% in the last year, the highest in Asia. Behind India were China and the Philippines, which both saw salary increases of about 8%. Other high growth countries were Korea (7%) and Thailand (6.5%).

In March 2005, the National Peoples Congress, the top legislature in China, announced plans to change the countrys Law on Enterprises Income Tax.

As China continues to follow through on its commitments to the WTO, the number of foreign corporations desiring to enter its attractive and increasingly deregulated economy has surged.

Many Chinese companies fail to pay employees' wages on time. However, since December 1, 2004, all foreign and domestic companies in China are now penalized for missing payment deadlines or withholding wages.

Despite the pension reform in 1997, China still faces a struggling social security system limited mostly to workers at state-owned enterprises (SOEs) in urban areas.

Despite being one of the worlds largest and fasting growing markets, China faces a labor shortage of local qualified staff. This is especially true in Shanghai, where many foreign companies struggle to hire qualified local workers.

On August 20, 2004, Chinas Ministry of Public Security announced the approval of the Regulations on Examination and Approval of Permanent Residence of Aliens, establishing Chinas first green card program for foreign residents.

On March 1, 2004, Chinas Ministry of Labor and Social Security released the "Regulations on Minimum Wages," increasing the minimum wage in China.

Companies in China are making improvements in their human resource administrations. Most of these changes are occurring in the management and technology sectors through the implementation of new programs and services.

China hopes to introduce a private pension plan by the end of the year, which would be modeled after Hong Kongs Mandatory Provident Fund (MPF) and American 401(k) savings programs.

From rural communities and farms, about 100 million migrant laborers have moved to Chinas major cities and manufacturing hubs to staff the countrys fast-growing export, manufacturing and construction industries.

The booming Chinese economy requires fully trained and qualified executives with international-standard management skills. The Shanghai Education Commission estimates that China will need over 37,000 MBA graduates per year starting in 2006.

In order to retain top executives at State Owned Enterprises (SOEs) in China, the State-Owned Assets Supervision and Administration Commission announced it would increase salaries for managers at central SOEs so that they will match market salary levels.

In the past, Japanese companies operating in China were known for restricting upper level management positions to Japanese executives only. However, Japanese companies are now realizing the need to utilize local labor for senior management.

In early summer 2003, the Chinese government released a document entitled, "Trial Measures on Enterprise Annuity," as a guideline for employer-sponsored pension plans.

A recent 2003 survey on expatriate packages in the Asia region found that expatriates in Hong Kong working for multinational firms received the highest perks among their counterparts in the region.

With China currently a member of the World Trade Organization (WTO) and the Beijing 2008 Olympics just around the corner, people in China are intent on learning English.

Chinas State Council Premier, Wen Jiabao, signed a decree promulgating the "Regulations Governing On-the Job Injury Insurance", which will cover medical costs for workers in China who have sustained on-the-job injuries or occupational illnesses.

The Severe Acute Respiratory Syndrome (SARS) situation in Asia has affected the ability of recent graduates in China to job-hunt.

The Chinese province of Yunnan has introduced a new law that will improve the ability of employers to judge the skills of their candidates and employees.

As part of China's efforts to fully implement the countrys Green Card (permanent residence permit) system and to attract foreign talent, officials announced that residency benefits would be offered to top executives from Hong Kong, Macao, and Taiwan.

At a recent conference in Jinan, China, Zhang Xuezhong, minister of personnel, announced that over 3.69 million people found jobs at 13,125 job fairs held around the country in 2001.

By the end of 2003, Chinas Entry and Exit Administration of the Ministry of Public Security expects the full implementation of the new "Green Card" (permanent residence permit) system.

Experiential training (self and team development training through outdoor activities) was first introduced to China in 1995 when the Beijing Outward Development School was established.

In the 1980s and 1990s, thousands of students left China in pursuit of higher education abroad. This brain drain is currently being replaced by a "reverse brain drain" with many Chinese wanting to return or remain in China than in the west.

Companies in China have been slow to develop their human resource infrastructure and utilize technologies related to improving HR functions. Therefore, companies in China tend to have more human resources staff per employee.

Foreign nationals desiring to work in China must file the appropriate documents in order to receive employment authorization. In order to enter the country, foreign nationals must first obtain a Z work visa.

Japans economic malaise has forced many Japanese jobseekers to pursue career opportunities in other countries. Among the places that are currently attracting Japanese workers is Shanghai, China.

A grave mistake that many overseas-educated Chinese can make when looking for employment back in China is overvaluing himself/herself.

Since the opening of China through the WTO, there has been an increase in demand for international professionals. The Chinese government has recently instituted changes in the immigration laws in order to lure overseas professionals into China.

For several years, the Chinese government has been grappling with under-funded pensions and social security programs. Estimates of the funding shortfall are as high as US$850 billion, 80 percent of Chinas GDP.

Chinese organized labor activity has been in decline for some time, though recently activism has resurfaced. There were over 30,000 worker protests (including strikes) in 2000.

Despite the global recession, Chinas IT sector, especially in Shanghai, grew by 30 percent last year. The hi-tech sector in China has sparked a migration of American-educated Chinese IT professionals back to China.

According to a Hewitt Associates survey, both foreign and local workers at foreign firms in Beijing received an average eight percent raise in 2001, and sixty-five percent of foreign firms say that they will issue raises next year.

Fifteen years ago, it was nearly impossible to find information technology specialists in China. Even finding someone who could speak decent English was sometimes a challenge.

Despite all this, there are severe labor shortages in China for certain types of high-skill workers.

A recent study of students at Beijings top universities showed that 63.9% of students hope to work for foreign firms upon graduation.

Chinese students return from aboard, HR opportunity for multinational operations in China.