Indian Firms Jolted by China’s Social Security Plan

The cost for foreign firms doing business in China will climb as the country extends social-security obligations to cover foreign companies and their employees, reports Saibal Dasgupta in the Times of India. The move may lead many firms to reconsider expansion plans in China. Employers will contribute 37 percent of salary and employees 11 percent for benefits including pensions, and health insurance for maternity leave, illnesses and work-related accidents. Foreign employers that already cover employees seek exemptions, and Dasgupta reports that “China has said it is prepared to exempt employees of countries that sign a reciprocal agreement provided they are making contributions to a similar scheme in their home country,” Dasgupta reports. India does not provide reciprocal social security benefits, and so far, only three countries have signed that agreement with China. – YaleGlobal