Managing Expatriate Employees Employment Law Expatriate' Could Term Paper

Excerpt from Term Paper :

Managing Expatriate Employees Employment Law

Expatriate' could be defined as someone who has left his own country in order to find employment in another country. (Definitions of 'Expatriate on the Web) Expatriate employees in China are diverse and the numbers of employees are vast. For example, the city of Hong Kong, which became free and independent of British rule in 1997, turned into a Special Administrative Region of China. On account of this, the city started to follow two diverse policies of administration and this allowed it autonomy from China, and this in turn resulted in Hong Kong being able to retain control over her schools and also her legal systems, while enjoying a free market economy. This very factor has attracted investors from all over the world to China, American numbering almost 1,100, and American residents in China numbering almost 50,000. (Hong Kong City Guide)

Hong Kong having the distinction of being the eighth largest trading center in the world runs businesses like export of toys and textiles, and tourism, which attracts about 10 million tourists every year. The city is also a world leader in her service industry as for example in the finance and information technology sectors. People seeking employment would be able to find work in any of these sectors, as well as in English teaching, which is a most popular job in China. The policy of 'one country, two systems' that China and Hong Kong follow and puts both on an equal footing is practical in some ways but irritating in some others. Most entrepreneurs in China quite prefer the Capitalism of Hong Kong to the Communism of China. The general feeling is that it is better to start off in Hong Kong and then to progress to China gradually. (Hong Kong City Guide) survey by the 'Expatriate Survey for the Peoples Republic of China' conducted in 2002 found that the demand for expatriates was very high, especially in senior management positions, despite the high costs involved in maintaining expatriates and following the various localization policies of diverse companies. When China became a member of the 'World Trade Organization' (WTO) she began attracting more and more foreign investors and expatriates. China readily encourages these expatriates since the general feeling is that they would bring a fresh outlook to the job, along with international ideas and a different perspective on things, and also a new level of coaching and training methods. Pay packages or modules are also being willingly modified by China in order to encourage expatriates. (Demand for Expatriates in China remains high)

The management of expatriates in China is an important issue as china is a country that insists on strict rules and regulations regarding employment. When one wants to open a new business in China, it is advisable to read up and follow the peculiar rules for registration and start up. The rule is that foreigners must never try to hire local labor directly by themselves; they must first register with a local labor agency, which will hire and employ workers on behalf of the Company. The reason that the governments states for insisting on such a peculiar rule is that it would be easier for the persons involved to collect pension and insurance and other such benefits if such a registration were to be done by all companies starting up businesses in China. Another reason is that in this way, a buffer is made between foreign employers who may be referred to as capitalists, and China's socialist workers. (Hiring and Managing Employees in China)

China has quite a few laws for the protection of her citizens when foreign companies employ them or expatriates. Among these is the Labor Law that states the workers cannot be hired directly by the company, and, when hired, the workers have to provide a proof of residence of the city where they are seeking employment. This would prevent workers from rural areas from applying for highly paid professional jobs in Beijing and Shanghai. The 'Regulation on Labor Management of Sino-Foreign Joint Ventures' also serves a similar purpose of protection of China's employees from expatriate exploitation. Workers may be hired either on a permanent or on a temporary basis, the government-approved minimum wages is paid on a monthly basis, and foreigners are generally expected to pay more than a double of this amount. All workers must enjoy a two-day off every week, and working hours are limited to 44 hours per week. (Hiring and Managing Employees in China)

Diverse people make up the work staff of an expatriate Company in China. Ethnic Chinese who were born in China and have overseas experience in the work field are generally preferred. English speakers are also preferred, as are those Chinese who are well versed in the manner of functioning of businesses outside China, the advantage lying in the fact that expatriate employers would find it easier to communicate with them. Expatriates are usually the most preferred as they are very familiar with the Company's objectives, even though the major disadvantage of lack of knowledge of the local language has to be dealt with. In addition, expatriates generally demand higher wages and better pay packages, like for example a package that would include housing and hardship and schooling would cost an astronomical $50,000 per year. (Meeting Diverse Staffing Needs in China)

Chinese culture is an ancient one and an expatriate would find it extremely difficult to familiarize with such an alien culture and act according to the customs and traditions followed there. However, in order to work better with the local people employed by the Company, he would have to possess certain knowledge of Chinese culture. In a survey conducted by the 'Center for Chinese Business at West Virginia University' in a few American Companies conducting business in China, it was found that these expatriates were of the unanimous opinion that they had not received language and cultural training on China form their Companies, and this was a major drawback. (The Expatriate Experience in China)

Not only did this factor prove to be a hindrance in their daily functioning in China, but it also spoiled their experience in such a fine country as China. They also revealed that a basic training in the history and economics and culture as well as crime of China would have better prepared them for such assignments. Evidence proved that people who had been trained on these issues with enrolment in language and culture classes found it in fact easier to work in an alien environment with ease. Suggestions were made that expatriates meet and mingle with the local Chinese and maintain cordial relations with them, and also prove to them that they were not in China just to make money but also to meet the Chinese and make friends with them. Patience and an open mind along with a good sense of humor were found to be essential to achieve this. Expatriates were advised to 'adapt' and not expect the Chinese to adapt to them. (The Expatriate Experience in China)

As far as labor relations are concerned, there is in existence a legal framework for Western investors in China, this framework is largely ignored. The reason may be that in order to encourage foreign investments, China may be lax in the enforcement of these rules, being encouraging as it is for stiff competition between investors for a share in the market. At the local level too there is competition among people from Hong Kong and Taiwan who use a sure knowledge of local customs and market conditions to ensure a fair share of the profit for themselves. The Chinese governments division of responsibilities at the central and local provincial levels makes it difficult to implement regulatory laws regarding expatriates and labor relations in a proper manner. There is confusion at all levels and this proves advantageous to locals who gain an edge over expatriates with insider knowledge. (An Unsafe Playing Field: Labor Relations in Foreign Enterprises in China)

Foreign investments in China are generally classified under four types: the Sino-Foreign Equity Joint Ventures, the Sino-Foreign Co-operative Joint Venture, the Wholly Foreign Owned Enterprises, and the Companies Limited by Shares with Foreign Investment. The Labor Law that was passed in 1995 attempted to deal with these diverse businesses by foreigners in China by providing a basic amount of security to them whereby they would be able to hire local workers without fear. The Trade Union Law of 1992 protected the rights of manual and physical laborers of China who have been employed by expatriates. Laborers would now be able to sign 'collective contracts' with companies, present their grievances to the Union, as well as have their rights and privileges protected. The 'All China Federation of Trade Unions', in 1994, issued a circular underlining the goals of a Trade Union. These essentially state that Trade unions are a necessity for the protection of the labor force of China as well as for the expatriates who may not…

Cite This Term Paper:

"Managing Expatriate Employees Employment Law Expatriate' Could" (2004, August 19) Retrieved January 16, 2018, from

"Managing Expatriate Employees Employment Law Expatriate' Could" 19 August 2004. Web.16 January. 2018. <>

"Managing Expatriate Employees Employment Law Expatriate' Could", 19 August 2004, Accessed.16 January. 2018,