From 1 July 2025, Shanghai raised its monthly minimum wage from RMB 2,690 (£288) to RMB 2,740 (£294), a relatively conservative increase of less than 2%. The city’s hourly minimum wage also climbed from RMB 24 (£2.57) to RMB 25 (£2.68). While Shanghai retains the highest minimum wage in the country, the small increment marks its lowest annual increase in over a decade — signalling a broader strategic shift in China’s approach to wage setting.

The restrained increase comes at a time when many Chinese cities are weighing the need to support workers against mounting pressure on businesses. For low-income workers in the city, the additional RMB 50 (£5.36) a month may be welcome but is unlikely to keep pace with rising costs for essentials like rent, transport and food. Meanwhile, employers — particularly in the private sector and among SMEs — have been wary of sharper increases that could hit hiring and operating margins.

Shanghai’s move follows a pattern seen in other economically advanced parts of China, such as Beijing, Shenzhen and Guangdong, where minimum wage growth has slowed in recent years. Beijing now has the country’s highest hourly minimum wage at RMB 26.4 (£2.83), while Shenzhen and Guangdong follow closely behind Shanghai with monthly minimum wages of RMB 2,520 (£270) and RMB 2,500 (£267) respectively. Coastal cities continue to lead the pack, but the difference with other regions is narrowing as inland provinces roll out more substantial hikes.

China allows each of its 31 provincial-level regions to set their own wage levels, leading to wide disparities. While most now have minimum monthly wages above RMB 2,000 (£214), some less developed provinces such as Hunan and Liaoning still sit closer to RMB 1,700 (£182). Regional authorities are required by law to review wages at least every two to three years, but increases are not guaranteed. Shanghai skipped adjustments altogether in both 2022 and 2024, reflecting the uncertain post-Covid economic environment and the government’s cautious fiscal outlook.

The wider context for these adjustments is China’s drive towards “common prosperity”, a national policy ambition aimed at reducing inequality and spreading the benefits of growth more evenly. While minimum wage rises are just one part of this broader agenda, they remain a critical lever for supporting working-class incomes and boosting domestic consumption.

Still, policymakers are walking a tightrope. Labour-intensive industries such as manufacturing, retail and logistics remain sensitive to wage increases, particularly in regions where businesses already face thin margins. Some firms may respond by relocating operations to lower-cost inland areas, or by investing in automation. Others may reduce hiring or move workers to informal, lower-paid roles not protected by minimum wage regulations.

There is also a generational and demographic dimension. Migrant workers and young people are disproportionately represented in low-wage and part-time employment, and thus stand to benefit from wage increases, but they are also most at risk if businesses trim staff to offset higher costs.

Shanghai’s modest wage rise this year suggests a preference for gradualism. The increase was likely designed to signal continued government support for workers, without destabilising local businesses or contributing to inflation. Analysts expect other cities to follow similar trajectories: small, measured increases tied closely to local economic indicators such as productivity growth, employment rates and cost-of-living data.

With China’s economy facing slower growth, soft domestic demand and ongoing global trade pressures, wage-setting will remain a key balancing act for local and national authorities. The 2025 update may be modest on paper, but it offers insight into how China is managing its transition from high-growth industrial powerhouse to a more service-led, consumption-driven economy.

For now, Shanghai leads the country in both pay and prudence. The rest of China is watching closely.

The post What does Shanghai’s minimum wage rise imply for the economy? appeared first on Focus - China Britain Business Council.

Drawing on the combined insights of experts from the China-Britain Business Council (CBBC) and Yingke London, this guide explores the key considerations for hiring in China, from choosing the right city and recruitment channels to navigating contracts, compliance and employment law.

Location: Where and How to Hire

When it comes to recruitment in China, geography is everything. Each region offers a distinct ecosystem of talent, industry focus, and cost. Tier-1 cities such as Beijing and Shanghai are obvious choices, offering access to top-tier professionals, international schools, and extensive infrastructure – but at a premium. Beijing serves as the political and R&D hub, which is particularly attractive for sectors like biotech and AI, while Shanghai thrives in finance, trade, and international business, boasting a bilingual workforce and global outlook.

Venture south, and cities like Guangzhou and Shenzhen (part of the Greater Bay Area) lead the way in manufacturing and tech innovation. Shenzhen, in particular, has earned the  reputation as China’s Silicon Valley, brimming with specialists in AI and hardware. “Shenzhen has a large pool of tech talent as its booming tech industry – from AI to hardware – draws them in,” notes Anne Zheng, CBBC’s Service Manager.

Tier-2 cities such as Chengdu and Hangzhou offer a different value proposition such as lower living costs, robust digital economies, and increasing numbers of young, educated professionals. As CBBC HR Director Ariana Zhang points out, “Cities in China are tiered. Tier one like Beijing and Shanghai are well known, but tier two such as Chengdu and Hangzhou also attract foreign firms, each with unique perks.”

Choosing the right city also informs your recruitment strategy. Online job portals such as 51job, Zhaopin, and Liepin are widely used for mid-level roles and offer cost-effective reach. However, foreign firms without a local business licence may find these platforms tricky to navigate independently. “Posting job ads on portals like 51job is cost-effective, but foreign firms without a local license need a facilitator like CBBC to navigate regulations,” says Ariana Zhang.

For senior or specialist hires, international or local executive search firms (e.g., Korn Ferry, Michael Page) are popular, though they typically charge 20-30% of the successful candidate’s first-year salary. Meanwhile, WeChat remains a useful tool for employer branding, and internal referrals can be effective once your team reaches scale.

CBBC often supports British companies through the full interview process – from screening CVs and testing English fluency to hosting in-person interviews and running background checks. Ariana Zhang shares one method: “We ask candidates to do a short English presentation to confirm their skills. A local partner like CBBC helps verify details that are hard to assess remotely.”

Contracts and Compliance: Getting Enrolment Right

Once you’ve found the right people, it is essential to formalise employment relationships in line with Chinese labour law. Written contracts must be issued within one month of employment starting. Most new hires begin on fixed-term contracts (typically 1-3 years), with probation periods determined by contract length. After two renewals or 10 years of service, open-ended contracts become mandatory – a development that can significantly impact dismissal flexibility.

“The labour law tends to protect the individual’s interest more, making it difficult for employers to cancel open-ended contracts,” reminds Sandra Xiang, a legal expert at Yingke London.

Alternative models, such as labour dispatch contracts, can be used for temporary roles or for foreign representative offices, but come with their own restrictions and are best suited for short-term staffing.

Onboarding, too, should not be overlooked. An effective staff handbook which is tailored to Chinese norms and translated accordingly, helps avoid confusion around entitlements such as sick leave, overtime, and public holidays. GDPR and data protection training must also be factored in. “Some policies differ in China – like public holidays, sick leave, and overtime pay. A clear handbook avoids misunderstandings,” says Anne Zheng.

Understanding Employment Models: EOR vs. Entity Setup

For companies looking to build a long-term presence in China, establishing a legal entity allows for full control over hiring and operations. However, this comes with administrative overheads and compliance responsibilities. From anti-discrimination clauses in job adverts to mandatory social insurance contributions, the legal landscape is rigorous. As Sandra Xiang explains, “Job postings must avoid discrimination. For instance, a company previously rejected a qualified female candidate, which led to fines and a public apology.”

Alternatively, an Employer of Record (EOR) model offers a nimble route into the market. In this arrangement, a third-party provider officially employs your staff while you manage their day-to-day work. It is a helpful interim solution for firms not ready to establish a local entity. “EOR providers handle compliance, but firms must clarify it’s a service relationship – not employment – to avoid joint liability,” Sandra notes.

Planning for Success

Hiring in China is not just about ticking boxes – it is about understanding the cultural, legal, and economic dynamics that shape the workforce. Tier-1 cities offer deep talent pools but come at a cost, while Tier-2 cities present rising opportunities for cost-effective growth. Using the right job platforms and working with local partners makes the process smoother and more effective. Above all, compliance – from contracts to onboarding policies – is non-negotiable.

As Anne Zheng summarises: “Understanding China’s unique hiring practices is crucial. Local support, like CBBC’s Launchpad, simplifies the process.”

To explore tailored support for hiring in China, contact the CBBC team at enquiries@cbbc.org

About the Authors

Anne Zheng is Service Manager at CBBC and leads the Launchpad programme, helping British companies establish operations in China.
Ariana Zhang is CBBC’s HR Director and an expert on recruitment and employment strategies in China.
Sandra Xiang is a legal advisor at Yingke London specialising in Chinese labour and employment law.

The post How to Hire and Build a Team in China appeared first on Focus - China Britain Business Council.

Secure the right visa in advance

Obtaining a visa for China requires careful preparation, as the process varies depending on the purpose of travel. Business visitors typically need an M visa, which requires an invitation letter from a Chinese company or partner, along with standard documents such as a valid passport, a completed application form, and a recent photo.

Applications must be submitted through the Chinese Visa Application Service Centre (CVASC), which has locations in London, Manchester, Belfast and Edinburgh. Fees vary based on visa type, nationality, and processing speed. Travellers should apply well in advance and double-check requirements, as policies can change. For frequent business travelers, multi-entry visas with longer validity may be an option, simplifying future trips. Ensuring all documents are accurate and complete is essential to avoid delays in the approval process.

Stay connected: SIM cards and VPNs

China’s internet restrictions mean many Western platforms – Google, WhatsApp, Facebook, and even some email services – are blocked. Here’s how to stay connected:

If you want to keep using them, then you’ll need a virtual private network (VPN). VPNs are a bit of a legal grey area in China, but the major illegality tends to relate to selling VPN access rather than using one. Just be sure to get everything installed and ready to go before you get to China. In our experience, the most reliable VPN for use in China is Astrill, although NordVPN and ExpressVPN are also popular.

If you have a good international roaming package, you should also be able to access Google and others on mobile data. If you’d prefer to get a local Chinese phone number for the duration of your trip, China’s three mobile providers – China Unicom, China Mobile, and China Telecom – offer SIM-only plans that you can buy by going into one of their stores. Again, you will need to register with your passport.

Must-Have Apps for Business Travel

China’s digital ecosystem is dominated by local apps. Download these before you go:

Communication and networking

• WeChat (微信) – The all-in-one app for messaging, payments, and business networking.
• DingTalk (钉钉) – Popular for corporate communication.

Payments and transport

• Alipay (支付宝) / WeChat Pay – Cashless payments are king; set these up with a foreign card.
• Didi (滴滴) – China’s Uber alternative (link to Alipay/WeChat Pay).

Translation and navigation

• Pleco (offline Chinese-English dictionary).
• Baidu Maps (Google Maps doesn’t work well in China).

Pro Tip: Test your apps before departure – some require a Chinese phone number for registration.

Managing money and payments

Over the past few years, China has fully embraced mobile payments, becoming an almost cashless society. While this makes life very convenient for people living in China, it can create problems for people who are just visiting.

Thankfully, China has introduced several measures to make payments easier for international visitors. Foreign tourists can now connect their overseas bank cards (including Visa, Mastercard and Diners Club) to popular Chinese payment platforms such as Alipay and WeChat Pay without needing a local bank account.

Following the release of the latest guidelines, the transaction limits for foreign nationals using mobile payment services have also been increased from US$1,000 (approx. RMB 7,233 or £790) to US$5,000 (approx. RMB 36,166 or £3,945) for single transactions, with the annual transaction limit increasing from $10,000 to $50,000.

Foreign users can complete the initial activation of WeChat Pay without a Chinese SIM card and make payments up to a cumulative limit of RMB 15,000 for a certain amount of time without verification.

Read our guide on the set-up process for WeChat here.

Major banks like Bank of China and Industrial and Commercial Bank of China (ICBC) have also improved access, allowing foreign cards to be used at more ATMs nationwide. Some hotels, shops and tourist attractions, especially in bigger cities, do accept international credit cards, including Visa and Mastercard.

Navigating transport

Booking internal flights and train journeys should be one of the easier aspects of your travel to China. You can search and book both through travel giant Trip.com’s app or website, which have English interfaces and accept international payment methods.

You will need to enter your passport details when booking either trains or flights (which may come as a surprise for those used to flying domestic in the UK/US), and in the case of the train, your passport is actually your ticket – either scan it when passing through the security gates (in newer stations like Beijing South) or present it at the staffed security gate when boarding the train.

Regarding trains, it is worth familiarising yourself with the codes used for the different types of trains in China so you can find the best routes; G are the quickest and newest, for example. China Highlights has a detailed guide.

Taxis in China are abundant, especially in major cities. Most people use a ride-hailing app like Didi, which can be used to book everything from taxis to luxury limos. Unfortunately, the Didi app is not currently available to download from UK app stores, but it can be used as a mini-program on WeChat and Alipay if you have either of these set up.

Most major cities in China – including Shanghai, Beijing, Guangzhou, Shenzhen, Chengdu, Hangzhou, Wuhan, and Nanjing – have subway lines linking key business districts and tourist attractions. All the subway networks are easy to navigate thanks to signage and announcements in English.

The post Business travel to China: Five essential considerations appeared first on Focus - China Britain Business Council.

Spring Festival 2025 will run from 28 January to 4 February, spanning a total of eight days. 26 January (Sunday) and 8 February (Saturday) are designated as work days to compensate for the long Spring Festival break. In a departure from previous years, the holiday has been extended by an additional day, beginning on Chinese New Year’s Eve (除夕).

Overtime payment for hours working during Spring Festival

To ensure the smooth operation of production and sales activities during Spring Festival, many companies need to adjust employee leave schedules and establish duty rosters. When requiring employees to work during the holiday, compliance with overtime payment regulations is critical.

Under Chinese labour laws and regulations, overtime payment rates vary depending on the type of rest days and the working hour system implemented.

Under the standard working hour system, for work performed on an official public holiday (i.e. 28-31 January in the case of Spring Festival), not less than 300% of the normal wage shall be paid; for work on weekend or an adjusted rest day (1-4 February), and where such rest days cannot be postponed and taken at another time, not less than 200% of the normal wage shall be paid.

Under the comprehensive working hour system, for work performed on public holidays (28-31 January), not less than 300% of the normal wage shall be paid. However, no rest day is outlined under this system, so for work performed on those adjusted working days and weekends, no overtime payments are available.

Under the non-fixed work hour system, there are differences in overtime regulations across different regions. For instance, in Beijing, employees under the non-fixed work hour system are not entitled to overtime pay for hours worked on public holidays (28-31 January). However, in Shanghai, these hours are considered overtime, and employers are required to pay compensation of up to 300% of the normal wage.

For adjusted working days on weekends, no overtime payment is due.

Annual bonus and tax implications

In China, many companies will provide employees with a one-time end-of-year bonus before or around Spring Festival. One of the most common ways that companies calculate the bonus amount is the “13th-month bonus” wherein the company pays an additional month’s salary around the CNY holiday. However, companies can implement their own bonus system as they see fit.

Annual bonuses in China are subject to individual income tax (IIT). Currently, IIT on bonuses can be calculated in one of two ways:

• Method 1: Calculated and paid separately on the annual one-time bonus.
• Method 2: Calculated and paid on the annual one-time bonus combined with the employee’s total annual income.

The first method is considered preferential treatment as it may decrease the tax burden for some taxpayers. This method will be applicable until the end of 2027. However, in general, for employees with low basic salaries, it may be more beneficial to combine their annual bonuses with their basic salary to calculate the total IIT (under Method 2) because various deductions could be employed to reduce the tax burden. Meanwhile, for employees with comparatively high basic salaries, Method 1 can potentially reduce the tax burden.

Employee retention during Chinese New Year

Spring Festival is a peak period for employee turnover, as many people consider changing jobs or career paths. This trend is partly driven by employees’ desire to stay in their current positions long enough to receive their annual bonuses. However, the cultural significance of the holiday also plays a role, as Spring Festival symbolises new beginnings, prompting individuals to seek fresh starts. Additionally, higher resignation rates during this time create more opportunities for job seekers. Consequently, the period following the Spring Festival can be particularly stressful for HR teams, who must manage a surge in vacancies.

In 2025, employee retention may become even more challenging. With both employers and employees facing economic difficulties, companies may lean toward offering smaller annual bonuses and more modest salary increases. According to a leading human resources agency, average salary adjustments for 2025 are expected to stand at 4.4%. However, for employees dealing with financial pressures, such as mortgages, childcare, and retirement savings, these increases may not be sufficient. As a result, many professionals may be more inclined to explore new opportunities. The voluntary turnover rate in the first half of 2024 stood at 3.9%, lower than that of the same period of the previous year, which stood at 4.9%.

In situations where financial incentives are limited, companies can implement various long-term strategies to enhance employee satisfaction and loyalty. Key retention strategies include:

• Fostering a positive work environment: Cultivating a supportive and engaging workplace culture helps improve employee morale and loyalty during challenging times.
• Promoting work-life balance: Encouraging a healthy work-life balance can alleviate stress, particularly during periods of economic strain. Companies should carefully manage workloads and set realistic performance expectations to prevent burnout.
• Career development and job stability: Offering employees opportunities for career growth and ensuring job stability are critical to retaining talent. Training and upskilling initiatives not only demonstrate a commitment to employees’ development but also enhance overall productivity.
• Flexible work arrangements: Providing flexible or hybrid work options can significantly reduce stress, especially for employees who benefit from a change in their work environment. Whether through remote work, flexible hours, or compressed work schedules, accommodating individual preferences enhances job satisfaction and reduces stress from rigid work structures.

For example, Ctrip Group has introduced a flexible home-office policy for its customer service staff, allowing eligible employees to work remotely during the Chinese New Year period from January 1 to February 28, 2025. This policy gives employees the option to choose their remote work periods, with up to two months of flexibility. The initiative aims to break the geographical constraints of traditional office settings and helps frontline workers better balance family and work commitments during the holiday season.

Financial and logistical preparations

In addition, proper financial and logistical planning is crucial to ensuring smooth operations and minimizing disruptions during the Spring Festival period.

Sales forecasting and inventory management: Accurate sales forecasts based on historical data and current market trends are essential for predicting demand during Spring Festival and the period immediately following. Businesses should plan and prepare inventory accordingly, taking into account potential production shutdowns and logistic delays due to the holiday. This will help prevent stockouts and ensure that customers’ needs are met even if factories close or shipping services are limited.

Cash flow management: Maintaining adequate liquidity is also critical during the holiday season. Companies should ensure they have sufficient working capital to cover operational expenses, including emergency costs that may arise during the holiday. A review of cash flow projections can help identify potential cash shortages, enabling businesses to secure necessary funds before the break.

Inventory procurement and material reserves: Ahead of the holiday season, businesses should stockpile essential materials and supplies based on expected demand. This includes raw materials, office supplies, and seasonal items such as decorations and promotional goods. Ensuring that necessary resources are in place before the holiday will help businesses operate smoothly, even if supply chains are disrupted.

By taking these key steps in financial and logistical planning, businesses can ensure they are well-prepared for both the operational challenges of Spring Festival and the financial demands of the holiday season. Proper forecasting, inventory management, and preparation for employee needs will contribute to a seamless holiday experience and strong performance in the months following.

This article was first published by Dezan Shira & Associates’ China Briefing

The post What businesses in China need to know for Spring Festival appeared first on Focus - China Britain Business Council.

China’s labour framework and the underlying HR complications impact foreign investments in the local economy. Finding and hiring staff in China is a delicate and complex process, especially for foreign SMEs, which are less likely to look at putting in place a legal or HR in-house team of counsels, especially in the start-up phase.

Can you hire staff in China from overseas?

Foreign entities located overseas are not allowed to directly hire employees in China, so UK companies indeed need to establish a representative office or a subsidiary in China. The most popular option for foreign companies is a wholly foreign-owned enterprise (WFOE). It’s worth noting that whenever entity incorporation seems like a step too far for an initial presence in China, UK companies can engage a so-called “employer of records,” i.e., a licensed provider that will hire employees under its name in exchange for a fee calculated on their salary’s total company cost.

Best practices for recruitment in China

Global headhunters have a strong presence in the Chinese market but are usually only engaged for middle to senior and high-level management positions given their databases and the fees involved (usually 20% of the candidate’s yearly gross). Companies usually dedicate in-house recruiters to managing online HR platforms (Job.cn, Zhaopin.com, 51job, etc.), where candidates and job-seekers directly upload their CVs and apply for job postings. Recently, social media channels and apps (especially WeChat official accounts) have created a direct link between employers and candidates, especially for companies in the consumer, luxury and fashion industries, or those that are well known in their sector. 

What you need to know about Chinese employment contracts 

Firstly, companies should note that written employment contracts must be in China’s official language: Mandarin. According to the provisions of Article 19 of China’s Labor Law, these are the terms to be included in employment contracts:

• Duration and type
• Description of duties with related protection and conditions
• Remuneration and benefits
• Discipline and conditions for termination
• Liabilities for breach of the employment contract.

Paying compulsory provident funds 

China’s wages are coupled with compulsory provident funds (five main categories), a government-run housing fund for rent and mortgage benefits, and individual income tax declaration liabilities, representing an additional burden on the employer’s monthly declarations. Social contributions for work-related injuries, pensions, maternity leave, unemployment, and medical insurance provided by the state are also capped depending on the previous year’s average salary published every summer by each municipality.

The hidden costs of hiring procedures

Training and induction programmes are usually expected by candidates, especially the youngest generation, who have more detailed expectations for their work commitments. Employers wishing to implement non-compete clauses should budget for the related remuneration that becomes a must when these are put into use. The minimum wage connected to non-competes is usually 30% of the employee’s monthly salary but candidates are free to negotiate that amount up to their liking and can’t be forced into similar obligations.

China’s evolving working culture 

Since the appearance of unicorn tech companies and internet giants, China has been noted for a culture of unpaid overtime that clashes with official regulations; under official Chinese law, employees can work a maximum 44-hour workweek and any work beyond that requires extra pay for overtime. There is a high turnover rate in the job market; candidates that change jobs after three to five years of work experience are seen as having a relatively reasonable job hopping rate but it can be much more frequent. It is worth noting that GenZers and young talents are more likely to frequently switch roles, but employers can combat this by providing a positive working culture and good advancement opportunities.

How do commissions and bonuses in China differ from the UK?

The majority of Chinese labour contracts are usually based on 12-month arrays with a clause for discretionary bonuses typically set in the months in the proximity of Lunar New Year festivities (January-February). Multinationals keep 13 months’ wages with performance bonuses and commission schemes on top, even though local regulations don’t prescribe fixed arrangements on this matter. The main difference is that 13th-month bonuses and the like are considered part of the employee’s salary and represent a fixed commitment from employers, whereas bonuses and commissions are discretionary.

Hurdles to recruitment by foreign companies

Foreign-invested enterprises should have two systems in place for recruitment: 1) background checks, including prior records of labour arbitration cases with other employers, and 2) mental health check-ups due to the fast pace of life and work in China’s major cities. Close attention should also be paid to candidates’ interpersonal relationships while handling tasks under pressure and their ability to integrate with existing teams as some companies may encounter highly educated Chinese returnees who are fluent in English but tend to feel easily disappointed with their careers versus their investment in studies abroad. As a general principle, the potential negative impact on the overall staff by candidates who have not been thoroughly committed and engaged outweighs issues arising from employees not skilled or trained for the set of tasks they’ll need to look after.

The regional divide in HR issues

In addition to the differences in the social insurance provident funds mentioned above, welfare policies such as sick leave, maternity leave and marriage leave differ from city to city. The overall process and regulations for terminating labour relations with employees also follow different precautionary measures and practices according to China’s local courts and arbitration committees, and companies should pay attention to these divides. Finally, foreign enterprises should implement internal SOPs for non-resident workers to apply for household registration and residence permit points in the municipality where they operate, as these create additional requirements for the payment of social security and the issuance of corresponding documents during the application process.

Letting go: The challenges of firing

The process of labour relationship terminations should be based on performance appraisals and individual business cases. HR teams will need to prepare different supporting documents for different cases, but severance pay should be put forward based on China’s Labor Law and its clauses on unilateral and mutually agreed termination. The usual set of causes ranges from dissatisfactory performance during probation, irregular or false attendance records, objective major changes in the company’s business outlook, and major disciplinary violations. National laws and regulations do provide for special labour protection and treatment for female employees during pregnancy and workers who have experienced labour-related injuries. In most cases, companies can avoid lawsuits and arbitration through severance and compensation packages, helping them to convey an employee exit without any repercussions on their main operation and enterprise credit.

This article is part of a series on exporting to China. See all the articles in the series below.

Part 1: How to conduct market research
Part 2: Protecting your trade mark
Part 3: How to choose the correct route to enter the China market
Part 4: The dos and don’ts of choosing a distributor
Part 5: How to find and hire staff in China

Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s Launchpad service gets your company boots on the ground in China quickly and cost effectively.

The post Finding and hiring staff in China appeared first on Focus - China Britain Business Council.

Ralph Jennings lived for seven years in Beijing and more than that in Taipei. He’s worked as a news editor with the state-owned China Daily, an advice columnist for the 21st Century weekly in Beijing and as a reporter for numerous international media outlets, including Reuters. He also taught writing courses in Beijing at the Communication University of China for several years. These jobs exposed Jennings to thousands of news interviewees, media colleagues, students and their friends. Then came the random people who shared seats on overnight train rides in China, approached the author in Beijing’s sprawling parks and, in one case, threw a glass bottle at him. They ranged from teenagers to retirees. All that is condensed into his helpful new book, 50 Useful Tips on China (Earnshaw Books). Jennings now covers the Chinese economy for the South China Morning Post in Hong Kong.

Why don’t hands get raised at meetings?

The person to whom the hand belongs might get shot down. Leaders of meetings tend to rank high. A question might offend those leaders by implying that the meeting didn’t cover all points in adequate detail. We’re talking about company staff meetings and professional conferences where senior people go on stage. Leaders prefer to lead without any hint of a challenge, part of an old social order that many Chinese people intuitively understand. And what if the point of someone’s question was covered at the meeting? Asking would admit to not absorbing details of the event, effectively reflecting badly on the person’s brain capacity rather than marking the person as a careful double-checker of information. To avoid offending a leader or embarrassing oneself, those with questions may just ask one another. Shortly after many an event, chatter levels rise quickly in the audiences as trusted colleagues or cohorts ask one another what the speakers meant. Common questions include: What do we do next? Do our jobs change? What’s the background of this new person joining our team?

Why are co-worker relations so tricky in China?

Employers too often give vague job descriptions. Everyone in an office might have the title “associate”, for example. Without clearer ideas about who exactly does what, co-workers invest a lot of time psyching out the bosses for clues – and for dibs on the easiest (off by 5.30 pm) and most rewarding (work travel) duties. Company heads prefer vague job descriptions to keep a high level of authority. More defined roles, especially if backed up by employee handbooks that are full of detailed rules, limit leaders’ flexibility in business. Clearer definitions offer employees clarity on their exact rights and obligations, which is good for them but possibly inconvenient for senior leaders who are rule-bound to respect those boundaries. As a result, co-workers vie for the best roles by getting onto the good sides of supervisors. That process can take many forms, including favours unrelated to work, but it usually means grasping quickly what bosses really want day to day and giving them exactly that, especially in a crisis situation.

Why do employees work overtime even when the work is done?

This practice reflects a psychology of accumulation: more is better. The same psychology explains the crush to study 10-plus hours a day and find ways to make money even when super-rich already. Not too many decades ago, China was unstable across multiple metrics, and people weren’t sure how long they could keep resources or find more. An employee who stays at work for two extra hours, even if just to fiddle around on their PC, has the look/feel of giving the company two more hours of time that should theoretically translate to positive income. Office heads who believe in accumulation psychology feel comforted by the extra hours and remember who’s working longest, often without measuring tangible outcomes of the time spent. Friendlier bosses buy dinners for their long-hour employees. With this kind of oversight, plus the free meals, it’s hard to walk off at 5.30 pm after an eight-hour shift even if work is done (and done well) and the labour laws say it’s OK to leave. To leave on time would offend the boss and cast the departed employee as one who doesn’t care about the company.

Why is it acceptable to copy without permission?

Copying is traditionally seen as an expression of respect for someone’s work. That means students can block copy passages from other scholars without attributing every one of them. It means going ahead and playing a famous song at a public event without seeking permission from the song’s creator. Over roughly the past 25 years, China has faced pressure from copyright-conscious foreign governments to adopt a Western-style system of intellectual property rights protections. Along came a suite of laws and courts. But copying persists. Commercial copying, say of a book or software package, saves a pile of resources compared to creating one’s own work – an obvious advantage in China’s cutthroat competition among businesses. A national spirit of beating other countries, especially in technology, can also drive copying without permission.

In a country where trains nearly always run on time, why is “chabuduo” (almost) so often considered good enough?

A lack of specificity anchors dealmaking, public relations and workplace relations, among other relationship chains, so the parties involved can keep a valuable degree of flexibility. Flexibility later protects the human relationships involved. If something goes wrong, both parties can say no details were final, then walk back and redo things without getting into a dispute over specifics. Deals may start with commitments to action rather than lists of actual actions to be taken. Government offices tell the mass media that projects cost “about 100 billion yuan” instead of disclosing an exact figure. Bosses give approximate orders to workplace subordinates. Humans, in all cases, hope to hold onto the margin between approximate and exact so they can keep harmony while making changes, such as raising a project cost to 150 billion yuan. Deals cover specifics after two parties build trust. A reporter with good government relations can get the exact project figure on request. A supervisor will give a detailed work request once sure there’s no need to change it or worry that employees will use it irresponsibly, such as by telling competitors.

Why is the customer not always so right in China?

Customers are small individuals, and sellers are usually companies with considerable resources. That difference creates a power divide between the two sides, and Chinese society, from the way in the past, assigns status based on accumulation. Lots of proprietors do try to help distressed customers, on principle as well as to keep people coming back. But during larger disputes, a store, restaurant or utility provider won’t hesitate to say no. They can bring out legal-looking paperwork that a customer might not have. They can ignore online complaints. And they can blame a distraught customer for product defects. The status-conscious society at large assumes that the larger company will win based on its inherent clout, even if a customer actually has a case. It’s debatable how effective government-run customer complaint hotlines and websites are in resolving disputes. That uncertainty reduces any fear of reprisal on the company’s side if it goes against a customer’s wishes. Best practice for customers: ask friends to recommend sellers before doing business.

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Entering the Chinese market offers UK companies a wealth of opportunities but also a unique set of challenges, especially in personal development and training. Based on my experience in Sino-British business interactions, I offer the following insights to help UK companies adapt and thrive in this dynamic environment.

Understanding communication styles

One of the most critical areas for personal development and training is understanding the stark contrast in communication styles. In the UK, direct communication is often valued. People tend to appreciate straightforwardness, where the message is clear and explicit. However, in China, communication tends to be more indirect. Messages are often conveyed through context, non-verbal cues and what is left unsaid.

For UK managers and employees working in China, it is essential to develop the skill of reading between the lines and understanding the subtleties of what is being communicated. Training sessions focused on cross-cultural communication can be immensely beneficial. Role-playing scenarios, workshops on non-verbal communication and lessons in Chinese business etiquette can help bridge the gap. It’s not just about learning the language but also about appreciating the cultural nuances that influence business interactions.

Navigating working styles

Another significant difference lies in working styles, particularly concerning the concepts of power and time. In the UK, the majority of companies tend to have a flatter organisational structure, with open-door policies and a more egalitarian approach. Decision-making processes are often collaborative, and time management is strictly adhered to with a focus on punctuality and deadlines.

In contrast, Chinese business culture often exhibits a more hierarchical structure. Respect for authority and seniority is deeply ingrained, and decisions may take longer due to the need for consensus and the involvement of higher-ups. Understanding this can prevent frustration and miscommunication. UK companies should train their staff to be patient and adaptable, recognising the importance of showing respect for hierarchy and the collective decision-making process.

Cultural sensitivity and adaptability

Training programmes should also emphasise cultural sensitivity and adaptability. It is crucial to cultivate an awareness and appreciation for the cultural differences that influence workplace behaviour and expectations. For example, the concept of “face” (面子, mianzi) is paramount in Chinese culture. The need to preserve the dignity of yourself and other and show respect can greatly affect business relationships and negotiations.

UK companies can benefit from training that includes case studies and real-life examples of cross-cultural misunderstandings and how they were resolved. Learning about Chinese festivals, traditions and customs can also enhance mutual respect and understanding.

Chinese companies in the UK

The flow of personal development and training isn’t one-way. As Chinese companies expand into the UK, they too need to adapt to a different business culture. For Chinese firms, training should focus on understanding the UK’s more direct communication style and the value placed on individual initiative and innovation. They should also learn about the UK’s regulatory environment, employment laws and corporate governance standards.

Creating a symbiotic relationship

Ultimately, the goal for both UK and Chinese companies is to foster a symbiotic relationship where both parties understand and respect each other’s cultural and business nuances. Investing in comprehensive, ongoing training programmes is crucial. These programmes should be tailored to address specific cultural and operational differences and should evolve as both the Chinese and UK markets continue to develop.

In my experience, companies that prioritise cultural understanding and adaptability not only navigate the complexities of international business more smoothly but also gain a competitive edge. They create work environments that are inclusive, respectful and conducive to innovation and collaboration.

By embracing these training initiatives, UK companies can confidently step into the Chinese market, and Chinese companies can seamlessly integrate into the UK business landscape, ensuring mutual growth and success.

The post How to understand and navigate China’s workplace culture appeared first on Focus - China Britain Business Council.

China is currently in the middle of a public holiday to mark Labor Day on 1 May. It’s a five-day break from work for many Chinese people – or is it? Two days of the holiday fall on Saturday and Sunday, while the other two days must be made up by working weekend days on either side of the holiday.

This practice of compensatory working days, known as 调休 tiaoxiu in Chinese, allows for longer blocks of time off: seven days for Spring Festival, five for Labor Day and seven for National Day in October. China has 11 official public holidays, but this year’s public holiday calendar has a bumper 28 days of holiday, including weekends, balanced with eight weekend working days.

Private companies in China have the right to set their own schedules, i.e., to ignore compensatory working days, as long as the official holiday calendar is maintained. Many companies will allow employees to work from home on these days or just be available by phone/email to outside clients.

The system dates back to 1999 when it was brought in to stimulate consumption in the wake of the 1997 Asian financial crisis. Certainly, the longer holidays are consumption hotspots; the 2023 National Day Holiday generated RMB 753.43 billion (£83.36 billion) in tourism revenue. Moreover, they offer valuable time off for Chinese employees with minimal statutory annual leave – just five days for employees that have been working for less than 10 years (compared to 28 days for full-time employees in the UK).

However, the compensatory working days have attracted criticism in recent years. Reporting on the Labor Day holiday, CNN noted that the Weibo hashtags “you should not pretend not to hear voices opposing the tiaoxiu policy” and “tiaoxiu policy for May Day” attracted more than 560 million views online.

Many feel cheated by the system, arguing that a holiday isn’t a holiday if you have to earn it back by working on a Saturday or Sunday. Others point out that the six-day work weeks created by the system are physically and mentally demanding, making people less productive. People have also complained that the spikes in transport and hotel prices caused by the compressed holiday schedules make travel unappealing, and that making the holiday system more flexible would spread spending across the year, benefitting the economy.

The criticism of the compensatory working days system reflects a wider pushback against China’s fast-paced job market, in which working long hours and taking few holidays were traditionally seen as ways to get ahead. Some younger Chinese people are swapping high-pressure white-collar jobs for self-employment or even jobs like farming, while others are simply ‘quiet quitting’.

While some Chinese media outlets have reported that various government departments have met to discuss China’s current public holiday system in recent years, any change would require massive cross-governmental coordination and is unlikely to happen quickly.

Photo by K Hsu on Unsplash

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So, what is the minimum wage in China in 2023? Currently, Shanghai has the highest monthly minimum wage among China’s 31 provinces (RMB 2,690/£303 per month) and Beijing has the highest hourly minimum wage (RMB 26.4/£2.97 per hour). Sixteen regions – Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Shandong, Henan, Hubei, Guangdong, Chongqing, Sichuan, and Shaanxi – have surpassed the RMB 2,000 (£225) mark in their monthly minimum wage standards. At the lowest end of the wage spectrum, Liaoning has the lowest monthly minimum wage level in China at RMB 1,420 (£160)

How does China determine minimum wages?

Minimum wage standards are determined by provincial governments, taking into consideration factors such as the minimum living costs of local employees and their dependents, the consumer price index of urban residents, social insurance premiums, and the local employment situation.

It should be noted that the minimum wage excludes things like overtime pay, allowances for night shifts or special working environments, and subsidies for meals, transportation and housing.

In most regions, China’s minimum wage standards do include the social insurance premiums and housing fund contributions paid by employees. In fact, it is possible for an employee’s take-home pay to be lower than the corresponding minimum wage standard. Only a few regions, such as Shanghai, clearly stipulate that their local minimum wage standards exclude social insurance premiums and housing fund contributions.

Local governments in China are generally required to update their minimum wages every few years but have the flexibility to adjust wages according to local conditions.

Most provinces set different classes of minimum wage levels for different areas depending on the given region’s level of development and cost of living. For example, a higher minimum wage class is established for the provincial capital and the most developed cities in the province, whereas smaller cities and rural areas fall under a lower wage class.

How do minimum wages impact labour costs in China?

As China’s economy moves up the value chain and makes the transition to innovation and services, most workers employed by foreign-invested enterprises already earn above the minimum wage. For example, workers in Shanghai made an average of RMB 10,338 (£1,164) per month through 2020 – nearly four times the local minimum wage.

Employer social insurance and housing fund obligations add around an additional 37% to employers’ labour costs on top of the employees’ gross salary.

For foreign investors, rising wages are an unavoidable feature of doing business in China. Yet when other factors like productivity, infrastructure, transportation costs and access to a massive domestic market are considered, China may still emerge as the more cost-efficient option compared to countries with lower statutory labour costs.

When comparing locations for foreign investment into China, minimum wages are a helpful barometer to gauge labour costs across different regions. From there, identifying industry-specific wage levels, availability of talent and access to regional incentives offer a more nuanced view of the labour costs within a given region.

For a full breakdown of minimum wages in China by province and city, see this article by China Briefing

A version of this article was first published by China Briefing, which is produced by Dezan Shira & Associates. 

The post What is the minimum wage in China in 2023? appeared first on Focus - China Britain Business Council.

Chinese trade is a vital component of the UK economy. According to UK government data, China was the UK’s 4th largest trading partner in the four quarters to the end of Q4 2022, accounting for 6.5% of total UK trade. In 2021, the inward stock of foreign direct investment (FDI) in the UK from China was over £5 billion, and in 2022, 3,558 UK working visas were issued to Chinese citizens.

What visas are frequently requested by businesses?

For businesses and entrepreneurs looking to work in the UK, the choice of UK immigration visas can appear daunting. In this article, we highlight some of the current visa options most often requested by Chinese business clients.

Innovator Founder visa

The new Innovator Founder visa enables entrepreneurs from outside the UK to set up an innovative business in the UK. Applicants must be at least 18 years old, have a clear business plan and have a business idea that has been approved by an approved endorsing body. English language and adequate savings requirements must also be met by the applicant.

In contrast to its predecessor (the Innovator visa), the Innovator Founder visa offers the following benefits:

• No minimum investment requirement: This will make it easier for Chinese entrepreneurs to come to the UK to start their businesses.
• More flexible eligibility criteria: Making it easier for a wider range of entrepreneurs to qualify.
• Faster processing times: The new visa can be processed more quickly, which will make it easier for entrepreneurs from China to get started in the UK.

Skilled Worker visa

The Skilled Worker visa (which replaced the Tier 2 General visa) is for foreign nationals who wish to come to the UK to work in a sponsored job. Only UK employers with a sponsor licence can employ overseas staff through the Skilled Worker visa scheme. The Skilled Worker visa uses a points-based system (PBS) which awards points based on meeting certain criteria.

Scale-up visa

The Scale-up visa was introduced in August 2022. It is designed to attract talented individuals from outside the UK to work for fast-growing UK businesses. To qualify for a Scale-up visa, you must have a job offer from a UK-based scale-up business that meets certain criteria. You must also meet the English language requirements and have a valid passport.

The Scale-up visa is valid for up to five years, and you can extend it for further periods of up to three years. After five years, you may be able to apply for settlement in the UK.

What is a UK Global Business Mobility Visa?

The UK Global Business Mobility visa routes are aimed at overseas businesses seeking to establish a presence or transfer staff to the UK and came into effect in April 2022. Some of the most requested visa types are as follows:

Senior or Specialist Worker visa (Replaced ICT)

The Senior or Specialist Worker visa is intended for overseas senior managers and employees with specialised skills and experience who wish to work in the UK on a temporary basis. Applicants must be employed by an overseas company or organisation that is affiliated with their UK business sponsor (via ownership or a Joint Venture). This replaces the Intra-Company Transfer Visa (ICT).

UK Expansion Worker visa (Replaced Sole Representative)

The UK Expansion Worker visa replaced the Sole Representative of an Overseas Business Visa and allows established and trading businesses outside the UK to send a senior manager to expand their presence in the UK. This route is designed for employees of foreign companies that do not already have a trading presence in the UK.

Secondment Worker visa

The Secondment Worker visa allows overseas employers to send workers to the UK to fulfil a high-value contract or investment with a UK-registered sponsoring business. Applicants must possess the necessary skills for the secondment and have worked for the overseas company for at least one year.

Service Supplier visa

The Service Supplier visa is intended to allow overseas workers who work for an overseas service supplier or who meet the self-employed requirements to come to the UK for a temporary work assignment.

Graduate Trainee visa (Replaced Intra-Company Transfer Graduate).

The Graduate Trainee visa is intended for overseas workers who wish to be transferred by their employer to the United Kingdom for the purpose of completing a work placement as part of a graduate training programme. The training programme must result in a senior management or specialist position. This replaces the Intra-Company Transfer Graduate visa.

Will a Global Business Mobility visa need the UK employer to have a sponsor licence?

Yes, for all pathways under the Global Business Mobility visa, applicants must have a Certificate of Sponsorship (CoS), therefore, the UK business must hold a sponsor licence.

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