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How to Navigate China’s Changing HR Landscape

With China on track to be the only large economy to achieve expansion in a difficult 2020, more and more international companies are looking to the nation as a potential source of growth for their businesses as well. That can mean that while right-sizing and layoffs are the unfortunate buzzwords in many nations, some companies are looking to add staff on the ground in China to capitalize on growth opportunities.

For foreign companies operating in China, the Human Resources functions of hiring and administering employees are crucial – as evidenced by a recent change in rules in Beijing regarding the nation’s social security system (sometimes referred to as social insurance).

China’s Five Social Insurances

Companies operating in China are required to contribute to five mandatory social insurance funds for their full-time employees that cover pensions, medical insurance, unemployment insurance, work injury insurance and maternity insurance. For Chinese citizen employees, companies are also required to contribute to a housing fund.

Recent Changes to the Social Insurance System

Earlier this summer, Beijing’s Social Insurance Center issued a new policy that prohibits companies from using a third-party HR service agency to administer the payment of social insurance benefits to their employees.

This had become a common practice as companies registered in other parts of China had taken on some Beijing based employees. Without a Beijing branch of their operations, however, many companies had turned to those third-party HR service agencies to administer the social insurance benefits – an alternative that is no longer available given the new policy recently issued.

While the policy has taken effect so far only in Beijing, it can be expected to spread to other jurisdictions throughout the country.

How PRI Can Help

Whether it’s a consultation on how these changes may affect your business, designing a plan to become compliant with the new rules regarding the social insurance system or even assisting in the set up of a branch operation in Beijing, PRI’s on-the-ground team can help.

PRI’s team is knowledgeable and skilled in navigating China’s labor laws and human resource policies, having had thousands of employees of our own as well as helped scores of foreign companies with their operations in the country. Within just the last month, for example, PRI’s HR group has helped with the closure of a US company's 100 employee operation in China without a strike or labor arbitration.

A Full Suite of Human Resource Consulting Services

China is home to a highly educated and talented workforce. While labor costs in China are still highly competitive globally, successful companies are focused on hiring and retaining top engineering and business talent that they can trust to achieve their business goals. We have hired over 2,000 employees in China and our Human Resources team can help you to recruit and hire the talent your business needs to be successful with your China strategy.

For example: in a targeted HR search, we typically review 100+ resumes, conduct screening interviews with 25-40 candidates, and present our clients with a carefully selected shortlist of 3-5 highly capable candidates to interview. PRI can also host employees and provide a wide range of administrative support services.

For more information or to set up your free consultation today, email


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