Outsourcing to China
China is a popular destination for outsourcing. The country is known for its extremely large talent pool in scientific and technical fields – at over 100 million professionals – thanks to the number and quality of its higher education institutions.
The outsourcing services provided by FMC Group allow clients wishing to outsource their activity to China to quickly and easily hire the best talent available and at the best rates. Moreover, FMC Group completely handles the administrative management of employees, allowing clients to benefit from all the strengths of the Chinese labor force without batting an eye about local regulations, or having to set up a local subsidiary.
- Advantages of Outsourcing to China
- FMC Group’s Outsourcing Approach
- Advantages of Outsourcing with FMC Group
- Labor Laws in China
- Working Hours
- Paid Vacation and Public Holidays
- Other Paid Leaves
- Minimum Wage
- Social Contributions and Taxes
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Advantages of Outsourcing to China
- Labor costs in China are lower than in other global economic powerhouses. Despite increases in the minimum wage in recent years, China remains an important low-cost outsourcing destination. The average annual salary in the country ranges between CNY 67,000 and CNY 166,000 (EUR 9,825 – EUR 24,340), depending on the region, with Beijing and Shanghai recording the highest wages.
- The Chinese labor force is known for its hard work and diligence. Chinese workers are universally known to be well-organized and goal-oriented. They are also mostly well-educated, especially in urban areas. China’s literacy rate stands at nearly 97% and its rate of enrollment in tertiary education is over 57%.
- China has the world’s highest number of professionals working in scientific and technical fields, with a talent pool of over 101 million individuals. The country counts more than 3,000 universities and higher education institutions, including over 200 that feature on several prestigious global university rankings.
FMC Group’s Outsourcing Approach
Selection and Interviews
- Preselecting candidates according to the client’s needs and requirements;
- Conducting employment interviews with preselected candidates;
- Establishing reports on the best candidates;
- Conducting personality tests or other types of tests if requested.
- Presenting the interviews to the client in a video format;
- Concluding the recruitment of the successful candidates and inviting them to work at FMC Group’s local offices in China.
- Managing employees and communicating their day-to-day needs with the client;
- Paying salaries and other expenses and monitoring paid vacations;
- Providing all the necessary tools and infrastructure required by the employees to conduct their jobs.
Advantages of Outsourcing with FMC Group
- Searching for candidates that perfectly fit the client’s requirements;
- Publishing job advertisements on various digital platforms and looking for potential candidates in FMC Group’s growing talent database;
- Preselecting candidates, conducting interviews, checking references, and negotiating employment contracts;
- Allowing clients to fully manage the tasks and functions of the employees;
- Reducing labor costs and completely eliminating the costs related to opening a local subsidiary in China.
Labor Laws in China
- Working hours in China are legally limited to 40 hours per week and eight hours per day.
- Additional work over the legal limit cannot exceed three hours per day and 36 hours per month.
- Overtime work is paid at a rate of 150% of the regular wage on weekdays, 200% on weekends, and 300% on public holidays.
Paid Vacation and Public Holidays
- Chinese employees are legally entitled to between five and 15 days of paid leave per year, depending on their seniority.
- China commemorates seven nationwide public holidays:
- January 1st: New Year’s Day
- Between January and February: Chinese New Year (three days)
- April 5th: Tomb-Sweeping Day
- May 1st: Labor Day
- Between May and June: Dragon Boat Festival (one day)
- Between August and September: Mid-Autumn Festival (one day)
- October 1st – October 5th: National Holiday
Other Types of Leave
- Maternity Leave: Women in China can take up to 98 days of maternity leave or 113 days for multiple births. Social security covers the employees’ pay during the leave at a rate of 100% of their regular salary or three times the minimum wage, whichever is the greater.
- Paternity Leave: New fathers can take up to 10 days of paid paternity leave. Social security covers the employees’ pay during the leave at a rate of 100% of the regular salary.
- Sick Leave: Chinese employees can take paid sick leave for between three and 24 months, depending on their seniority. Sick pay is covered by social security. Its rate ranges from 60% to 100% of the regular salary – depending on seniority – for leaves that are six months long or shorter, and from 40% to 60% for sick leaves that are more than half a year long.
- Bereavement Leave: Employees can take up to three days of paid leave after the death of an immediate family member.
- Marriage Leave: Employees can take between three and 10 days of paid leave for their wedding.
- The minimum wage in China varies from one region to another. The highest minimum wage is set in Shanghai, at CNY 2,590 (EUR 380) per month, followed by Beijing, at CNY 2,320 (EUR 340).
- The 13th-month bonus salary is a common practice in China and it is usually given during the Lunar New Year or Spring Holiday celebration.
Social Contributions and Taxes
- Social contributions in China vary slightly from one region to another.
- Employer contributions are typically within the range of 38% to 41% of the gross salary and they include contributions to pension, housing fund, medical insurance, unemployment insurance, work-related injury insurance, and maternity insurance.
- Employee contributions are typically within the range of 20% to 24% of the gross salary and they include contributions to pension, housing fund, medical insurance, and unemployment insurance.
- The employee income tax in China varies between 3% and 45%, depending on the employees’ annual revenue.
Further Useful Information
- Please see Chinese Labor Law for more information on labor laws in China.