Employment in China

What are the motivation and drivers for the individual?

GuanxiGroup Members:

Ryan MotilallNelson Pacheco

Joseph ThomMJ Sandretsky

Employment is different in China not only because of their culture

But for the sheer amount of people creating a massive workforce

Employment TopicsGuanxi

by RyanLegal Framework

by JoeCompensation

by MJThe Future of Employment and its Implications

by Nelson

Guanxi: It’s who you know

The Definition of GuanxiExample of GuanxiGuanxi vs. Bribe

The Definition of Guanxi

Guanxi is a personal connection between two people strategically persuading and utilizing one another to perform a favor or service.

 Guanxi is usually not used to describe

relationships within an immediate family.

Example of Guanxi

Guanxi vs. Bribe

The difference between an acceptable gift and improper bribe.

Three criteria most commonly considered for

bribes in China.

Legal Framework

Legal Framework

• Key elements of Labor Contract Law• Labor Unions• Everyone is a sole proprietor• Labor relations

Law Key elements of Labor Contract

TermOther ProtectionsPenalties

Labor Unions

All-China Federation of Trade UnionCollective BargainingWorking Conditions

Everyone is a sole proprietor

Entrepreneur SpiritSmall RetailersProfessionals

Labor relations

Workers response to privatization

DisputesOutlook

Compensation

Issues Affecting Compensation

• Pay scales in China• One Child Rule• Income taxes• Retirement• Health Care• Housing

Pay Scales in China

Average pay in China $2400 annuallyPay in particular jobs for comparison

Teachers make 1500-2000 RMB Professor make 3000 RMB ($439) monthlyDoctor makes average $10,000 annually

Changes since their recession 1997Difference in pay between Tiers120 Million migrant workers making 500

RMB ($73) monthly in a cityKeep in mind cost to live is much cheaper

than here

One Child Rule Consequences

How the rule worksGovernment employeesHow it is being skirted in tiers 2 and 3 and western regions

Exceptions to the ruleEffect on families and future

Taxes: They pay up in China too

Income taxesRetirement deductionHealth care deductionGovernment requirements

Retirement: China’s Social Security

The system in ChinaRetirement age is 50 for women and

60 for menAging population and one child rule

affecting the solvency of China’s planHow paid to retireesMigrant workers cashing in

State Health Care for the Masses

Health CoverageState Facilities Private Health Insurance

Health Care Reform Western vs. traditional Chinese medicine (TCM)

Housing is their biggest expense too

Rising cost of Housing in CitiesMortgagesGovernment controls of cost in

market driven housing

Future of Employment and Business Implications

The new generation of leadership in China

• Everyday many Chinese students are graduating from the universities to become and accept the challenges of a new generation of Leadership in Business and Management in China.

• Chinese Blue-collar workers are no longer willing to labor for low wages in manufacturing.

• Chinese workers have lost the fear of going hungry, so they have become more selective about employment.

• At the white-collar level, most multinationals need to rethink their human resource strategies.

• The overwhelming reason younger white-collar workers leave their jobs is not because their salaries are too low but because they see no career opportunities there.

• The participation of women at the workplace arena has increased substantially.

• Companies need to have local leaders who are paid as much as foreigners

• They need training programs, overseas rotations and clear

paths for advancement.• Young workers are demoralized knowing that expatriates

get excellent pay packages at places where there are no mainland Chinese executives.

China huge economic leverage

• China's rapid economic expansion outpaces growth in the United States, 8.9 percent in the past quarter versus 3.5 percent in the U.S.

• China is the dominant regional player in northeast Asia area.

• China’s economic expansion has led to a demand for raw materials from countries around the world.

• Rapid expansion of China's presence in countries such as Guinea, Myanmar, Sudan and Venezuela. Despite the controversy of some human rights groups that have said that China is taking direction to some repressive regimes to secure its access to important raw materials.

• Since barriers and differences are evaporating. We are living in a global world now where barriers are meaningless and the world, in a business sense it is flat.

• Regardless what kind of business you are in, you will be affected by what is happening in China.

• China consumes both human and natural resources at an amazing rate.

• All businesses today better start preparing for this competitive dragon that will change the balance of power in the world.

“Study and work hard, because someone in China wants your job.“

Gregory P. Smith

Thank you for your attention

Questions?

References Cai, A. (2006, July 21). China's Pension system faces major reform. Asia Times . China Average Salary Income. (n.d.). Retrieved Nov 14, 2009, from

www.worldsalaries.org: http://www.worldsalaries.org/china.shtml Fu, M. (2009, Nov). (R. Motilall, Interviewer) Leung, T. (2009, Oct / Nov). Project Manager. (M. J. Sandretsky, Interviewer) Naim, T. (2006, Summer). Time to Share. The Recorder , p. Special Report. Salary - Teach China. (n.d.). Retrieved Nov 2009, from Abroad China:

http://www.abroadchina.org/salary.asp Systematic government theft of migrant workers' retirement pensions. (n.d.).

Retrieved Nov 14, 2009, from China Labor News Translations: http://www.clntranslations.org/article/31/systematic-government-theft-of-migrant-workers-retirement-pensions

Tax System in China. (n.d.). Retrieved Nov 2009, from Wikipedia: http://en.wikipedia.org/wiki/Tax_system_in_China

Zhang, J. (2009, Oct). Tour Guide. (M. J. Sandretsky, Interviewer) Arbitration Needed. (2009, July 30). Economist . Dickinson, S. M. (2008, November 8). Power to the People. China International

Business . Wang, J. (2009, October). Licensed Tour Guide. (J. Thom, Interviewer)