What services do expats in China need

Social security of Swiss expats in the People's Republic of China. Challenges and risks for expatriates

Table of Contents

List of abbreviations

introduction

I. The Social Insurance Law of the PRC
A. Objectives of the Social Security Law of the PRC
B. Lack of legal certainty due to legal fragmentation

II. The posting of Swiss workers to the PR China

III. The Swiss expat is subject to the social security law of the People's Republic of China
A. Duties and rights of the host company and the posted worker
B. Basic old-age pension insurance
1. Employer and employee contributions
2. Requirements and scope of benefits (qualifying periods)
C. Accident insurance (accident at work and occupational disease insurance)
1. Financing
2. Services
D. Basic health insurance
1. Employer and employee contributions
2. Services
E. Maternity insurance (pregnancy insurance)
1. Financing
2. Services
F. Unemployment Insurance
1. Funding and contributions
2. Services
G. How are Chinese Pension Benefits drawn?

IV. Double insurance for Swiss posted workers in the absence of a social security agreement between Switzerland and the PR China
A. Continuation of the subordination under the AHV / IV
1. With declaration of continuation
2. With declaration of membership H.
B. Old-Age and Survivors' Insurance (AHV)
1. Employer and employee contributions
2. Services
C. Disability insurance (IV)
1. Employer and employee contributions
2. Services
D. Accident insurance (UV)
1. Financing
2. Services
E. Occupational benefits
1. LOB subordination
2. Employee and employer contributions
3. Services
F. Health insurance (KV)
1. Financing
2. Services
G. Maternity insurance (pregnancy insurance)
1. Financing
2. Services
H. Family allowances
1. Financing
2. Services
I. Unemployment insurance (ALV)
1. Employer and employee contributions
2. Services
J. Consequences of double insurance
1. Age
2. Occupational accident, occupational disease and non-occupational accident
3. Non-occupational disease
4. Crediting of benefits from Chinese social insurance in the event of disability and death as a result of an occupational accident or disease
5. Motherhood

V. Expiry of the posting period
A. Return of the posted worker to Switzerland
B. Localization of the posted worker in the PRC
1. Voluntary AHV / IV membership and maintenance of pension coverage
2. Transfer of the pension assets to a Chinese pension fund
3. Return of the localized employee to Switzerland and transfer of the pension assets to a Swiss pension fund
4. Offshore pension funds for expats in international corporations

VI. Summary and appreciation

bibliography

List of abbreviations

Figure not included in this excerpt 1

introduction

The Free Trade Agreement (FTA) between Switzerland and the People's Republic of China took place on July 1st, 20142 entered into force,3 also previously the agreement on labor and employment issues on June 9, 2014.4 From this point in time, products that are exported from Switzerland to the PR China will benefit from the agreed tariff reductions.5 The territorial scope of the FTA extends to the entire national territory of the PRC6 as well as to the customs area of ​​Switzerland (including the Principality of Liechtenstein).7

This makes Switzerland the first of the 20 largest economies in the world with which the People's Republic of China has concluded such an agreement.8 In addition, Switzerland is after Iceland9 the second European country with which the PRC has signed a free trade agreement.10 In 2013, the PR China was the sixth most important export market for Switzerland and number four for suppliers (exports to the PR China 2013: CHF 8.7 billion [= 4.1% of all exports from Switzerland]; imports from the PR China 2013: CHF 11.4 billion [= 6.1% of all imports]).11

Further agreements were signed in 2013/14: on September 25, 2013 between Switzerland and the People's Republic of China a new agreement to avoid double taxation (DTA) in the field of taxes on income and assets, which is intended to replace the double taxation agreement that has been in force since 1991 ,12 and on July 21, 2014 between the Swiss National Bank (SNB) and the People’s Bank of China (PBoC) a bilateral currency agreement (swap agreement).13 The new DTA complements the advantages of the free trade agreement such as tariff dismantling, technical barriers to trade and advantages in the area of ​​trade in services with improvements in the area of ​​direct taxes.14

Since October 15, 2011, the time of the first negotiations on a free trade agreement between Switzerland and the People's Republic of China, based on the “Interim Measures for Participation in the Social Insurance System by Foreigners Working within the Territory of China ")15 all foreign employees16, so-called expats (expatriates)17who have been working in the PRC for more than 6 months are subject to Chinese social security for the first time. The new regulation affects around 231,700 foreigners (as of 2012) who are in the PRC with a work permit.18

Foreign employers who post workers to the PR China must also re-insure them in the Chinese state social insurance, namely in the basic old-age pension insurance, accident insurance19, Basic health insurance, maternity insurance and unemployment insurance (Section 3 (1) and (2) preliminary method).20 The prerequisite for the submission is that the employees have non-Chinese citizenship in the Chinese territory21 have received an employment and residence permit (employment certificate for foreigners, certificate for foreign experts, certificate for permanent foreign correspondents) or a settlement permit for foreigners (§ 2 preliminary method). The basis for the submission under social security law is Section 97 of the Social Security Act of the People's Republic of China, which came into force on July 1st, 201122, which includes all foreigners (expats) employed in23, i.e. permanent and temporary foreigners, for the first time24 subject to Chinese social security (see also Section 3 (1) Provisional Method). Due to the social security obligation, the foreign employees have the same entitlement to the drawing of insurance benefits as Chinese citizens.25

Since there is no social security agreement between Switzerland and the People's Republic of China26 exists and there are otherwise no ways that foreign workers do not have to take part in Chinese social security,27 As a rule, social security contributions are to be paid in both countries at the same time for the employees posted by their employer from Switzerland to the PR China (see Section 9 Provisional Method).28 To date, only foreign employees in Shanghai are exempt from the obligation to pay contributions.29 where the foreigner population is largest (2012: approx. 17% of all foreigners with work permits in Shanghai)30 and where a free trade zone was opened on 09/29/2013.31

After the Swiss-Chinese Chamber of Commerce asked the Swiss government in August 2011 to intervene against the negative effects of the Chinese social security law on the trading community in the PRC, the FSIO announced in November 2011 that exploratory talks with the PRC regarding a social security agreement were initiated to record.32 In its position paper, "China’s New Social Security Law", the Chamber of Commerce demands an exception from the obligation to pay contributions in the Chinese social security system for posted workers who already pay social security contributions in Switzerland.33

The aim of the study is to show the effects of the double reporting of the Swiss posted worker, i.e. the Swiss employee who only works on a temporary basis in the PRC, in the Chinese and in the Swiss social security system. In order to be able to answer the initial question of what Swiss business people and companies need to know about the legal situation with regard to Chinese social security in order to be able to conduct business successfully,34 In Chapter I, the new Chinese social security law is placed in the context of the other regulations in the Chinese social security area and asked about its goals. In the III. Chapter describes the consequences of subordinating the expat, i.e. the temporary or permanent employee in the People's Republic of China, to the individual Chinese social insurance schemes: the employer's obligation to pay contributions, the amount of the employer's and employee's contributions to be paid by the employing company and the various social security benefits . Questions are also asked about the rights of the expat vis-à-vis the Chinese social security authorities, and what about legal security in the Chinese social security systems in view of the fact that the PRC is still a one-party dictatorship35 is. Chapter IV shows the consequences of double insurance for posted workers in old age, in the event of an accident, illness, disability, death, maternity and unemployment. For this purpose, the individual Swiss social insurance schemes are first presented with their submission requirements, contributions, benefits and benefit receipt requirements. Chapter V deals with the situation after the end of the posting period, when the expat returns to Switzerland and when he or she is located in the PR China (including subsequent return to Switzerland) with the corresponding tax consequences.

I. The Social Insurance Law of the PRC

That on October 28, 2010 at the 17th session of the 11th NPC36 The social security law of the PR China passed since 01.07.2011 - the day of the 90th party anniversary (founding of the CP of the PR China in 1921)37 - in force.

A. Objectives of the Social Security Law of the PRC

China's social security system is in a state of upheaval and has expanded considerably over the past two decades.38 In the 12th five-year program (five-year plan) (2011-2015), which was adopted by the NPC in March 2011, one of the essential elements is the cushioning of social inequalities through the development of the social safety net.39 The one according to the suggestions of the CCP40 The 12th five-year plan for social and economic developments drawn up by the Council of State and approved by the NPC is - like all previous five-year plans - part of the "super-planning"41 of the Chinese leadership with the one hundred year goal (by 2049, the 100th year since the founding of the PRC) of a society with modest prosperity at an even higher level that will benefit more than a billion people.42 By the end of the period of the 12th five-year program (2015), 1. the complete coverage of the new form of village old-age pension social insurance is to be achieved, 2. the basic pension insurance for urban employees and urban non-employees is to be bundled, and 3. the transferability of the pension insurance be done. The gradual networking of urban and rural insurance systems is also to be promoted. Another goal is to improve the health system - including basic health insurance in cities and in rural areas.43 The background to this is the higher life expectancy and the consequences of the one-child policy that has been propagated since the late 1970s,44 i.e. a particularly rapid aging of the population.45 A social disintegration caused by the increasingly aging society and enormous differences in education, income and wealth46 sets national cohesion and, in particular, the CCP's claim to sole rule47 under increasing pressure.48 The reform of the social security system is currently absolutely central to the legitimacy of the CCP's rule.49 The situation is exacerbated by the low retirement age of 50 to 55 years for women and 60 years for men.50

The official norms, i.e. the "party norms" issued by the CCP and the state legal law, are decisively influenced by Sinomarxism51. The statutory law of the People's Republic of China mainly serves to resolve the "main contradiction" that is currently applicable in Chinese society52, i.e. the "contradiction between the growing material and cultural needs of the people and the backward social production"53, and is therefore weighted and structured very differently depending on the “main contradiction”.54 This now also applies to the Chinese social security legislation as part of the commercial law, which is particularly relevant to contradictions.55

The goals of the new Chinese social security law are therefore to standardize different contribution rates and benefits56 and the expansion of the group of insured persons. By consolidating the financial basis of social insurance, social security should be established for all citizens,57 about the harmonious stability of society58 to promote (see § 1 of the SVG).59 To this day, for the vast majority of Chinese, concern about old-age pensions is one of the most important savings motives, as regular and adequate old-age insurance is still the prerogative of a small minority. This explains, among other things, the strikingly high savings rate in the People's Republic of China. In the 12th five-year program (2011-2015), the Chinese government now wants to encourage domestic consumption to a greater extent. By increasing domestic consumption and reducing the dependence of economic growth (foreign trade surplus: EUR 125.3 billion) on the export industry and capital goods investments, economic growth and prosperity of the population should be achieved and the gap between the highly developed regions and the poorer parts of the country narrowed.60 This presupposes that private households are relieved of risk protection through their own savings through the expansion of the social safety net (introduction of comprehensive social, pension and health insurance).61 The Chinese government is striving for a system that, like the Swiss three-pillar model, is based on state contributions and personal deposits. In the still underdeveloped Chinese insurance market62 However, private pension insurance only plays a minor role.63

B. Lack of legal certainty as a result of legal fragmentation

The new Social Insurance Act is based on the existing system; it does not contain any detailed rules.64 It also contains a number of authorizations to the State Council65,66 who, as the highest executive body of the NPC, performs the function of government and directs the work of local governments.67 The corresponding implementing provisions for the SVG have been issued as ordinances by the State Council or the Ministry of Labor. These concern various subjects of insurance law. The result of the contradiction of some regulations is that the decrees introduced by the municipalities and their interpretation, as well as the agreed contributions and insurance benefits, differ considerably from one another depending on the region. The interpretation and implementation of the guidelines on Chinese social security issued at the central level take place at the local level.68 There are also considerable regional differences with regard to the persons entitled, the financing process and the organization.69 Employers who have deployed foreign employees in several regions must also check separately for each region to what extent the “interim measures on compulsory social security” are already being implemented.70

In addition, often obsolete and contradicting provisions from the 1990s have to be used for individual points.71 Often there are no central, but only local regulations.72 This leads to a confusion of social law regulations and thus to a non-transparent legal situation, since different social law regulations apply in every province and every district.73 The unclear legal situation enables a "flexibility that is not available in Western legal systems".74

In order to provide more clarity for foreigners working in the PRC regarding the conditions of membership and the conditions for the state social security, the Ministry of Human Resources issued the "Provisional method for the participation in the social security of foreigners who work in China" .75 In view of the fact that many legal enactments and other official standards of the PRC appear to be unclear and leave a lot of leeway for interpretations that fall within the competence of the Chinese and not foreigners, and the Chinese authorities have the last word in this, the question arises whether the interests of foreigners working in the People's Republic of China are actually protected, as stated in Section 1 of the Preliminary Method, or whether the vagueness of the wording under social security law protects Chinese interests.76

In view of the vagueness of the formulations under social security law, the question can be asked whether the stratagem is here77 No. 20 “To make the water cloudy to catch the fish [deprived of their clear sight]; fish in cloudy water "(stratagems of exploiting a confusing situation; chaos exploitation strategists)78 has been applied by the legislative institutions.79 "The basis and starting point of this stratagem is namely the confusion, ambiguity, complexity of the world in general and the market in particular."80 so that "through the vagueness of the terminology of the law, anybody who would intend to outwit the Chinese state is deprived of the legal remedies to realize his intention."81

With the introduction of compulsory social insurance for foreign workers in the People's Republic of China, ie the introduction of the "provisional measures for compulsory social insurance", the aim is merely to ensure that foreign workers and Chinese workers are treated as much as possible with regard to social insurance, as has long been the norm in western countries, the main focus is not on increasing the contribution income collected from foreign employees, which is only a fraction of the social security contributions of Chinese,82 this most likely speaks against the assumption of the application of stratagem no.20, however, if one follows the view of Friederike V. Ruch and Norma Möller that the introduction of compulsory social insurance for foreign employees in the PR China will force the conclusion of further social insurance agreements,83 that's the way it is - especially with regard to a growing western presence in the PRC84 - Absolutely necessary to have a good knowledge of stratagems, supra-planning and Sinomarxism, although these special horizons cannot be viewed exactly as part of the law of the PRC “in order to better grasp what might be the real purpose of a specific legal regulation (or, on the other hand, how the Chinese might bypass law by making eg a clever use of strategems) ".85 Indeed, one should “look at the Chinese art of planning as a whole. The Chinese are initially acting openly and transparently. If you have the feeling that you cannot achieve something with it, you can resort to cunning. "86

II. The posting of Swiss workers to the PR China

The posting includes performing work in the name and for the account of the posting company. It is usually preceded by a domestic employment relationship87 with the sending employer. The previous employment contract remains valid, only a supplementary agreement for the foreign assignment is attached.88 A hiring is also possible, especially with a view to a temporary assignment in the People's Republic of China.89 There must be evidence of an employment law relationship between the posting employer and the posted worker for the entire duration of the posting (Swiss employer's willingness to continue working and the posted worker’s willingness to return). Only the sending employer, but not the host company, is entitled to terminate the employment relationship by giving notice.90 In addition to the wages, the posted worker receives a special foreign allowance, the amount of which is divided by some companies into different countries or groups of countries and the corresponding remuneration points (such as flight or train costs, hotel costs or renting an apartment) and structured according to the type of posting (manager or other employee) . The family situation of the final sender is also taken into account if the family is to accompany him abroad.91 The amount of the foreign payment corresponds to the duration of the posting. A work permit and / or residence permit must be obtained for the period of posting.92 However, it is not necessary that the wage is paid directly by the posting employer.93 A posting usually lasts between 6 and 12 months. Postings lasting longer than 24 months are considered long-term postings, postings under 6 months are considered short-term postings.94 Employees who have to work on the implementation of a project or who work on an assembly or construction site (in the international construction industry and in the industrial sector) are often posted on short notice. The upper limit for long-term postings is 5 to 6 years and is usually associated with mandatory changes in the social security status of the posted employee.95

In contrast to international HR management, which generally speaks of a "posting" as a personnel-related term, a distinction is made in social insurance as to whether the specific case is a real posting, i.e. a temporary (limited) assignment96 in the PR China, or to continue the insurance after the posting period has expired, i.e. upon localization97, acts.98

Workers posted to the PRC who have worked there for 6 months in a Foreign Invested Enterprise (FIE)99, in a representative office of a Foreign Invested Enterprises100 or work in a branch of a foreign, i.e. here Swiss, company, are - like all other foreign employees - subject to Chinese social insurance (basic old-age pension insurance, accident insurance, basic health insurance, maternity insurance, unemployment insurance) (Section 3 (1) and (2) provisional method).101 The prerequisite for posting is the payment of wages by the employer in Switzerland (wage list of the company based in Switzerland),102 i.e. by the Swiss founding company of a Wholly Foreign-Owned Enterprises (WFOE)103, the Swiss contractual company of a joint venture (JV)104, the Swiss founding company of a representative office105 or the Swiss founding company of a branch106,107. The Swiss founding companies are liable for the liabilities of the branches and representative offices.108

III. The Swiss expat is subject to the social security law of the People's Republic of China

A. Duties and rights of the host company and the posted worker

The operating company is liable to pay contributions. The social security contributions to be paid by the expat are withheld from their wages and paid (Section 60 SVG; see Section 57 SVG). However, the sending Swiss company is liable as the employer for this obligation. The contribution basis for basic old-age pension insurance, basic health insurance and unemployment insurance is the expat's monthly wage. They can deduct their social security contributions for tax purposes.109

The collection of social security contributions is the responsibility of the people's governments from the district level upwards (Section 59 (1) SVG). The concrete method for the collection of contributions is determined by the State Council (Section 59 (2) SVG). The operating company also has the contributions to be paid to the body for collecting the social security contributions110 to be reported (§ 60 SVG; see. § 61 SVG). If the latter does not report the sum of the social security contributions to be paid, the body for collecting the social security contributions determines 110% of the amount paid in the previous month as the amount to be paid (Section 62 SVG). Another obligation of the operational company to cooperate is, for example, keeping accounting books with the corresponding social security data. If these obligations to cooperate are not complied with and if the account books are falsified, modified or deliberately destroyed, fines of up to RMB 20,000 (approx. EUR 2,425) can be imposed (cf. Art. 18 of the preliminary measure on the administration of the report and payment in the Social insurance).111

The expat has to register the social security with the social security body within 30 days from the issue of the employment card112 to be carried out yourself (Section 4 (2) Preliminary Method). This is in contrast to § 58 SVG, according to which the employer in the area of ​​the PR China must apply for social security registration within 30 days of the employment of an employee. He then receives a social security number and a social security card from the People's Republic of China (Section 10 preliminary method). However, the posted worker - in contrast to the host company ("employer") - has no right of appeal (administrative contradiction under social security law) regarding registration, contribution determination and collection (as well as the localized employee), as this is asserted in Section 83 (1) and (2) SVG established the right of appeal to the Chinese citizenship113 assumes why it has not been included in the "Provisional Social Insurance Method for Foreigners Employed in China".114

B. Basic old-age pension insurance

As mentioned earlier, the rules are scattered, often out of date, sketchy and contradicting each other.115

1. Employer and employee contributions

The Chinese pension system is designed as a partial funded system, consisting of a hybrid of pay-as-you-go and funded systems.116 Financing is mainly provided by employer and employee contributions (Section 10 SVG).117 The employer's monthly contribution rate is a maximum of 20% of the total wages of the employer118, of which 16-17% go to the basic pension fund (pension insurance fund, solidarity fund, social fund) and 3% to the individual account.119 The contribution from the basic pension fund is spent on current pensioners.120 The monthly employee share is 8% of his total wage bill and is the same throughout the PRC.121 The employee's share is invested in an individual pension account (individual account) with fixed interest rates (funded procedure) in order to benefit only the employee, including interest (cf. §§ 11f. SVG).122

The total contribution for the individual account is therefore a uniform 11% of the contributory salary, consisting of the entire employee contribution (8% of the salary) and the rest of part of the employer's contribution (3%).123 However, the specific percentages are set at the provincial level.124 If the wage of an employee falls below 60% of the average monthly wage of all employees in a region, this 60% serves as the assessment basis for the pension insurance contribution.125 If an individual employee earns more than 300% of the regional average wage, the wage portion that is over 300% is not included in the assessment basis. In some regions, the maximum income threshold is 200% of the regional average wage.126 The employee contributions are not taxable.127 Since the basic pension funds do not have sufficient funds, the individual accounts of the employees are often used to guarantee the current pension. In practice, the Chinese partial funded system proves to be a pay-as-you-go system. Reasons for the lack of financial resources in the basic pension funds are unprofitable investments of the funds, misappropriation of the same for investment projects and loans to third parties, depreciation due to inflation and a lack of investment opportunities in the underdeveloped Chinese capital and stock markets.128

2. Requirements and scope of benefits (qualifying periods)

The expat is entitled to the basic pension (basic pension [= contribution share] plus pension from the individual account) if he meets the benefit requirements (Section 5 (1) Preliminary Method), ie if he is 60 (male) or 55 (female manager) ) or 50 (worker) and has fulfilled the contribution period of 15 years (Section 16 (1) SVG). The monthly basic pension amounts to 20% of the monthly local average wage earned in the previous year (provincial or district level) and the employee's own monthly average wage. The amount of the monthly pension from the individual account (= capital pension portion) is no longer exactly 1/120 of the sum paid into the individual account, i.e. the total accumulated amount, but the number of months to be paid out, which is calculated in advance, is determined by the average life expectancy of the urban population , the employee's retirement age and other factors.129 The state has to adjust the pension level according to the price level and the wage development.130 If the employee has not paid contributions for 15 years after retirement, he generally does not receive a basic pension, but only the payment of the amount that he has saved on his individual pension account (one-off payment of the credit in the individual account to the person concerned without any deductions). This means that the employer contribution paid for the insured is lost. The employer does not get this money back either.131 The insured person can take out additional insurance by paying the remaining contributions for the full 15 years. He then receives the basic monthly pension from the state (Section 16 (2) SVG). If the person insured in the basic old-age pension insurance dies as a result of illness or a non-work-related reason, the surviving dependents can receive a funeral allowance and consolation allowance; If the insured person has not reached the statutory age limit and if he is injured as a result of illness or for a non-work-related reason and is completely unable to work, he can receive a disabled person's allowance (Section 17 SVG).132

In the event of the death of the foreign employee, the amount remaining on the individual “social insurance” account can be inherited “according to the law” (§ 6 preliminary method).133 The legal basis is § 14 SVG (“according to the law”), which stipulates that in the event of the death of the individual account holder, the amount remaining in the individual account will go to the heirs. In the case of legal succession due to death, the law of the usual place of residence of the testator at the time of death applies to movable property (Section 31 IPRG).134 A testamentary disposition (establishment, modification and revocation of the disposition due to death) is valid if it conforms to the law of the testator's habitual residence at the time of the establishment of the testamentary disposition or of death, the law of the state whose nationality the testator at the time of Establishment of will or death135 or corresponds to the law of the place where the testator makes the will (§ 32 IPRG). It is unclear whether the regulation also applies to inheritance contracts and gifts of death.136

C. Accident insurance (accident at work and occupational disease insurance)

All entrepreneurs are obliged to take out occupational accident insurance, i.e. to participate in state accident insurance, for their employees (Section 33 SVG).137 Occupational accident insurance only covers accidents during working hours and at work, occupational diseases, commuting accidents and death during working hours and at work (Sections 14, 15 of the 2003 industrial accident insurance rules).138

1. Financing

The industrial accident insurance works on a pay-as-you-go basis.139 The occupational accident insurance premiums are paid by the employing company alone, based on the total wages of its employees and the specific contribution rate to be paid by the social security body (Section 35 SVG). According to the risk of accidents at work in the various sectors, the contribution rates differentiated by the state for the sectors (differential rate, which is adjusted every five years) and according to the situation of the use of accident insurance contributions and the accident rate within each sector, the contribution levels at company level (floating rate, which is set every year according to the Accident rate of the company in the previous year is adjusted). The specific contribution rate to be paid by the deployment company is determined by the social security bodies according to the extent to which they make use of the occupational accident insurance fund, the frequency of occupational accidents at the respective deployment company, the contribution rate in their sector and the contribution level in which they fall. The different contribution rates for the industries and the contribution levels within the industries are determined by the authority of the State Council for the administration of social security, reported to the State Council and have to be approved by it (cf. Art. 34 SVG).140 A premium refund of 5% to 20% is even possible for companies that have not had any work-related accidents during the insurance year or whose work-related accidents are below the industry value.141 The contribution rates are currently 0.3% to 2%142 the total wages of the operating company (with a national average of approx. 1%) and are based - in addition to the industry risk - also according to the location of the operating company.143

2. Services

In the event of an accident at work (gongshang) or occupational disease (zhiyebing), the expat receives compensation (Section 36 SVG). If the host company has not paid the contributions, it has to pay the benefits of the industrial accident insurance in the event of an accident at work. If he does not do this, the occupational accident insurance fund has to pay the benefits in advance (§ 41 SVG). The same applies if a third party caused the accident at work and does not pay. In this case, the accident insurance body has to pay in advance and can take recourse from a third party (§ 42 SVG). The entire costs for medical treatment and various rehabilitation measures are covered (see §§ 29ff. Of the 2003 industrial accident insurance rules): treatment costs during statutory treatment leave, medical treatment, severance payments, care allowances, occupational rehabilitation measures, disability allowances, costs for medical aids,144 Aid for the costs of in-patient treatment in the hospital, travel costs, meals and accommodation throughout China, as well as one-off severance payments when the employment contract is terminated if an occupational accident or disease has been previously diagnosed (see Section 38 SVG).145 In the event of a slight incapacity for work, one-off compensation can be granted (Section 35 of the 2003 industrial accident insurance rules). In the event of death, a survivor's pension (cf. §§ 29 et seq. Of the 2003 industrial accident insurance rules), an allowance for burial costs for the surviving dependents and a consolation allowance for dependent relatives are paid out (§ 38 No. 8 SVG). However, if a job-related total incapacity for work is determined that makes it impossible for the employee to carry out his job, early retirement with a lifelong disability pension is possible (see Section 36 SVG). The lifelong disability pension varies between 75% and 90% of the last individual wage, depending on the level of disability. Even after retirement, the employee will continue to receive a disability pension. If this is lower than the old-age pension, the disability pension from the industrial accident insurance fund must be topped up to the amount of the old-age pension (Section 31 of the 2003 industrial accident insurance rules; see Section 40 SVG regarding the payment of allowances for the disabled).146

D. Basic health insurance

In order to take into account the local characteristics, the central government grants the provinces and regions more freedom in the implementation of health insurance than with basic old-age pension and unemployment insurance. The consequences of this, however, are confusion with regard to responsibilities and administration as well as unequal treatment of the insured in the individual provinces and regions. Only persons in an employee relationship are insured.147

1. Employer and employee contributions

Basic health insurance consists of a combination system of funds and individual accounts that are usually administered by the health insurance authorities at city and district level and coordinated nationwide. The financing must correspond to the Chinese state finances and the capabilities of the companies in order to secure the sick treatment of the workers.148

The basic health insurance is financed by employer and employee contributions (Section 23 SVG). Pensioners do not pay any contributions; however, if they have not yet reached the number of contribution years determined by the state, they can pay the contributions for the missing years (Section 27 SVG). The employer's monthly contribution rate is 6-12% of the total wages paid to the employees of the respective company.149 Of these 6-12%, around 30% flow into the individual accounts of the employees, while the rest is accumulated in a general sickness fund (solidarity fund). The contribution rate for employees is 2% of their total wages. These 2% are booked in full on the individual account.150 The capital in the individual accounts earns interest like three-year savings deposits, whereby capital and interest are the property of the employee and can be inherited (cf. §§ 31f. IPRG). However, there is no assessment ceiling at national level. The contribution rates for both parties can be corrected in accordance with economic developments. In order to take local conditions into account, both the respective amount of the contribution rates and the exact distribution of the employer's contribution are determined locally.151 In some cities, such as Zhongshan, the employer contribution is much lower than 7% and the employee contribution is much lower than 2%.152

2. Services

The benefit rates of the basic health insurance for employees are based on the provisions of the State Council (Section 26 SVG; see Section 5 (1) Provisional Method). The respective municipal administration determines the scope of benefits by adopting implementation guidelines on the insured diseases, payments for medication and cost accounting procedures.153 The performance level of the basic health insurance has to correspond to the development of the gross national product of China.154 The treatment costs to be borne by the basic health insurance fund are settled directly between the social security body and the respective medical facility or pharmacy (Section 29 SVG).155 If a third party is responsible for paying the treatment costs, the treatment costs are to be paid in advance by the health insurance fund, even if this third party cannot be identified. The competent authority is then entitled to recourse against the third party (see Section 30 (2) SVG).156

The treatment costs, which exceed 10% of the average local wage (mainly for the payment for inpatient and outpatient treatment of some seriously chronic illnesses, costs for hospital stays, i.e. expensive illnesses), are largely covered by the solidarity fund, although the beneficiary has to make a certain contribution , the amount of which may vary from region to region. The highest payment limit is basically four times the annual salary. Treatments that cost less than 10% of this wage (costs for outpatient treatments and diagnoses) are to be borne by the individual accounts used for capital accumulation or by the expat himself. Health costs that exceed the maximum payout limit can be covered by private health insurance.157 The expat therefore has to pay for health costs that exceed four times the average previous year's wage.158 Additional restrictions have been introduced in various provinces and cities directly under the government. In Beijing, for example, for a hospital stay costing over RMB 10,000, expats have to pay one fifth of these costs from their individual account or out of their own pocket.159 The low health insurance benefits are insufficient for serious illnesses.160 Services (medical examinations, treatments and hospital stays) are only provided in certain hospitals and with specified doctors. The basic health insurance does not cover treatment costs that have to be paid from the funds of the occupational accident insurance (§ 30 No. 1 SVG), treatment costs outside the PRC (§ 30 No. 4 SVG), costs for cosmetic surgery or care by private nurses. The medicines paid for by the basic health insurance are set in a positive list by the State Council. The basic health insurance bears the costs for mechanical apparatus and devices that take over internal body functions, such as pacemakers, but not glasses, dentures and body replacements.161 In spite of the lists of the medications to be reimbursed and the treatment to be reimbursed, there is still room for maneuver about the type of treatment and the quality of the medication, which is difficult for laypeople to assess. In addition, the entire pharmaceutical market, which is primarily operated by the hospitals, is overpriced, since the doctors and hospitals increase their salaries or their budget in this way, which is disadvantageous for the patient.162

E. Maternity insurance (pregnancy insurance)

The maternity insurance163 As an independent branch of insurance, it does not belong to health insurance.164 The municipalities are responsible for maternity insurance. However, not every municipality has set up maternity insurance. In this case, the host company is obliged to fully reimburse the employee for the treatment costs associated with pregnancy and childbirth.165

1. Financing

The maternity insurance is only financed by the deployment company (Section 54 SVG). The employer contribution is between 0.5% and 1% depending on the location (no employer contribution at all in Dongguan).166 However, the contribution rate varies from region to region, as it is set by the local government (city or district government) in order to adapt it to local conditions. However, it must not exceed the maximum limit (1% of the total wages of all employees in the government territory) (Section 4 of the Maternity Directive of 1994).167 A fund for maternity insurance is set up through the employer's contributions, which ensures that employees receive economic compensation and the necessary health care for the time of childbirth and childbed.168

2. Services

The benefits only apply to pregnancy and childbirth. The recipients of benefits are the employees (mothers) and spouses of these employees who are not employed. The medical costs of pregnancy, a pregnancy allowance and other costs determined by laws and other legal provisions are paid (Section 54f. SVG), i.e. the grants for childbirth and the costs of medical treatment during childbirth and breastfeeding. Pregnancy allowance is available to female employees on maternity leave, to all employees on vacation due to a birth planning operation, and to female employees in other cases stipulated by laws and regulations. Pregnancy allowances are calculated and paid according to the average monthly wage paid by the company in the previous year (Section 56 SVG). Additional benefits include continued wage payments during maternity leave of a maximum of 90 days (during the period of childbirth and the puerperium).169 The continued payment of wages should generally correspond to the average wage of the previous year (Section 5 of the Maternity Directive of 1994). In practice, however, only half or even less is sometimes paid.170 Maternity insurance only applies to married women giving birth to their first child. Single women and those who give birth to their second child are therefore not entitled to any maternity insurance benefits. Compliance with the one-child policy is to be achieved by means of the regulations of maternity insurance.171

F. Unemployment Insurance

Unemployment insurance is based on the "State Order No. 258 Regarding Unemployment Insurance" issued by the State Council in 1999172according to which workers and employees in urban companies are subject to unemployment insurance, i.e. obliged to pay into unemployment insurance.173 Pursuant to Section 97 SVG and Section 3 Provisional Method, all foreign employees are now also subject to unemployment insurance. Securing the basic needs of the unemployed and promoting re-employment are the two most important functions of unemployment insurance.174

1. Funding and contributions

Unemployment insurance is financed through payments from employers and employees as well as interest income, local government budget funds, and state subsidies175 and so-called other money legitimately taken up in the unemployment insurance fund (cf. § 44 SVG).176 The amount of the contributions for employers is currently 2% of the gross monthly total wages of the host company (sometimes however 1% and only 0.4% in Shenzhen) and for employees usually 1% of their individual net wages (however not applicable for some cities like Shenzhen and Zhongshan) .177 However, these contribution rates are not completely rigid; there is no contribution assessment ceiling at national level. In the event of a major change in regional unemployment, the provincial governments can, in consultation with the provincial government concerned and with the permission of the State Council, correct the percentage of the unemployment insurance contribution in their administrative area.178

2. Services

In connection with the question of the use of services179 The problem with unemployment insurance is that when the employment contract is terminated, the work permit and thus also the residence permit expire. As a result, there is no right to stay after losing a job.180 The expat therefore does not receive any benefits from the Chinese unemployment insurance.

G. How are Chinese Pension Benefits drawn?

If the former expat receives benefits from Chinese social insurance and is domiciled in Switzerland, he must submit a proof of life or proof of life issued by the Chinese embassy or consulate in Switzerland to the social security body responsible for paying his benefits at least once a year has been notarized and legalized by the responsible body in Switzerland and has been legalized by the Chinese embassy or consulate (see Section 7, Paragraph 1, Provisional Method). If the beneficiary enters the PR China legally, he can prove his or her state of life to the social security body without having to provide proof of life from the Chinese embassy or the Chinese consulate in Switzerland (see Section 7, Paragraph 2, Provisional Method). However, the beneficiary does not have the right to lodge a complaint (administrative objection under social security law) regarding the payment of benefits, since the assertion of this right of appeal stipulated in Section 83 (1) and (2) SVG is Chinese citizenship181 assumes why it has not been included in the "Provisional Social Insurance Method for Foreigners Employed in China".182

Although the beneficiary is based in Switzerland, the Chinese social security benefits are also taxed in the PR China, as the DBA China183 no OECD-MA 21184 contains corresponding general clause.185 After all, this income is exempt from taxation in Switzerland. However, when setting the tax for the other income of the pension recipient, Switzerland can apply the tax rate that would apply if the income concerned were not exempt from taxation (Art. 23 No. 2.a DTA China).

IV. Double insurance for Swiss posted workers in the absence of a social security agreement between Switzerland and the PR China

A. Continuation of the subordination under the AHV / IV

In principle, employees who are employed abroad by their employer for a certain or indefinite period are no longer automatically subject to AHV / IV.186 Since there is no social security agreement between Switzerland and the People's Republic of China, the posted worker, i.e. the employee who works in the People's Republic of China for a limited period - regardless of his or her nationality - has the option of remaining insured with the AHV / IV / EO.187

1. With declaration of continuation

The posted worker can continue the AHV / IV under the following cumulative conditions (Art. 1a Para. 3 lit. a AHVG in conjunction with Art. 5-5c AHVV; Art. 1b IVG):

- Payment of wages by employers in Switzerland;188
- Immediately before starting work abroad, uninterrupted insurance with the Swiss AHV for at least 5 preceding years (crediting of insurance periods in the EU / EFTA) (Art. 5 AHVV);
- Consent and self-commitment of the employer to settle the contributions on the total earned income of the posted worker, i.e. also on the wage payments abroad, here: in the PRC, for the same activity.189

If, within 6 months of taking up employment in the PR China, the posted worker and his employer submit the written application signed by both of them to the AHV compensation office responsible for him (Art. 5a, 5b AHVV),190 the insurance continues without interruption (Art. 5b para. 1 AHVV) if the requirements of Art. 5 AHVV are met. After this period has expired, the insurance can no longer be continued (Art. 5b (2) AHVV).191 If the seconded person has signed the application to the AHV compensation office, but it has not yet been sent, the seconded person can still be subordinated.192

2. With a declaration of membership

The AHV / IV legal effects of the posting (cf. Art. 1a Para. 3 lit. a AHVG in conjunction with Art. 5-5c AHVV; Art. 1b IVG) do not extend to the family members accompanying the posted employee, ie those who are not gainfully employed Husband and non-employed spouse or non-employed registered partner and non-employed registered partner (PartG) as well as their children.As a rule, they lose their insurance cover when they give up their Swiss place of residence.193 You can, however, join the AHV in accordance with Art. 1a Para. 4 lit. c AHVG in conjunction with Art. 1b IVG (Art. 5j-k AHVV). The insurance continues without interruption, provided that the declaration of membership is submitted within 6 months of departure to the PR China (Art. 5j, Paragraph 1 of the AHVV) by registered letter to the AHV compensation office, where the AHV contributions are made for you be billed. Once they have signed up, they are insured and exempt from the obligation to contribute, provided that the posted employee pays at least CHF 950 AHV / IV / EO contributions per calendar year from employment. If the posted worker, i.e. at least one parent, is insured with the AHV, the children can receive any child or orphan's pensions from the AHV / IV and, as a rule, also IV benefits for minors where necessary. As a result, you receive benefits without being insured yourself. As long as they have their place of residence and stay abroad, the child is only insured if they have signed up for voluntary insurance in accordance with Art. 2 AHVG.194 If the declaration of membership is submitted later, the insurance begins on the first day of the month following the declaration of membership (Art. 5j (2) AHVV).

B. Old-Age and Survivors' Insurance (AHV)

1. Employer and employee contributions

The contribution rate for the Swiss employer and the posted worker is 4.2% of the earned income195 (Art. 5 Para. 1, Art. 13 AHVG). The employer also has to pay administrative costs, which vary depending on the compensation office.196 The AHV contributions of the spouses or registered partners who are not gainfully employed are determined taking into account their possible pension income and their assets (Art. 28 AHVV).

If the remuneration is split between the sending employer and the foreign host company, the employer must pay all of the AHV / IV contributions on the total wage,197 i.e. the entire wage must be paid in Switzerland.198

2. Services

The AHV grants old-age pensions199 or survivors' pensions.200 A minimum contribution period of one year is required in the AHV (cf. Art. 29 Paragraph 1 AHVG).201

a) Retirement benefits

The AHV old-age pensions are paid out on completion of the 65th (men) or 64th (women) year of age (Art. 21 (1) AHVG). The pension can be withdrawn for a maximum of 2 years in advance (with a pension reduction determined according to certain principles, but at the same time supplementary benefits can be drawn if the relevant requirements are met). The pension can be postponed for a maximum of 5 years (with an increase in the postponed retirement pension by the actuarial equivalent of the benefit not drawn).202 Aids (hearing aids or wheelchairs) or a contribution to costs are given to AHV retirees with their place of residence and habitual residence in Switzerland (cf. Art. 43ter AHVG).203

b) Survivors' benefits

Survivors' pensions are granted to widows, widowers and orphans (Art. 25 AHVG). The divorced spouse is also considered a widow or widower under strict conditions (Art. 24a AHVG). The cohabiting partner is in no case deemed to be entitled to benefits (see BGE 125 V 215).204 Stricter requirements apply to widowers than to widows (Art. 23, 24 para. 2 AHVG). In the case of registered partnerships, based on Art. 13a ATSG, equality with the widower takes place. For orphans, the entitlement is limited up to the child's 18th birthday. If the child is still in education at this point in time, the orphan's pension will continue to be paid, but no later than until the age of 25.205

C. Disability insurance (IV)

1. Employer and employee contributions

The contribution rate on income from gainful employment is 0.7% each for the Swiss employer and the posted worker (Art. 2f. IVG).

2. Services

IV benefits are daily allowances, pensions and helplessness allowances (Art. 42 IVG). Entitlement to IV daily allowances exists while integration measures are being carried out (see Art. 12-14a, 22-25 IVG). The daily allowance is 80% of the last earned income without any health restrictions; for children there are additional amounts (child benefit) (Art. 23 and Art. 23bis IVG).206 Persons who were not employed before the onset of disability are not entitled to IV daily allowances. If the (reasonable) integration measures do not lead to the restoration of employability (integration not possible), IV pensions are paid if the person concerned has been unable to work on average at least 40% without any significant interruption and is at least 40% disabled at the end of this year (Art. 28 para. 1 IVG). Depending on the degree of disability, different pensions can be claimed: with 40% a quarter pension, with at least 50% half a pension, with at least 60% a three-quarter pension and from at least 70% a full pension (Art. 28 para. 2 IVG). The pension is granted at the earliest 6 months after the entitlement to benefits has been asserted at the IV office (Art. 29 Paragraph 1 IVG). The pension ends when the statutory retirement age is reached (age 64 for women or age 65 for men); At this point in time, it is replaced by an AHV retirement pension.207 The disability pension is calculated according to the principles applicable to the AHV pension. Children who would receive an orphan's pension from the AHV in the event of the death of the disabled person receive an IV children's pension (Art. 35 IVG). In the IV, however, a three-year minimum contribution period must be met, while in the AHV a minimum contribution period of one year is sufficient (Art. 36 IVG; Art. 29 Para. 1 AHVG).

[...]



1 Completed on 07/06/1990. Approved by the Federal Assembly on June 18, 1991. Came into force through the exchange of notes on September 27, 1991 (status: September 27, 1991).

2 This was preceded by two and a half years of negotiations (Aiolfi, Handel, p. 31).

3 Aiolfi, Handel, p. 31. With the entry into force of the FTA, the PR China simultaneously loses its status as a preferential developing country under the General System of Preferences in favor of the developing countries (APS) (Henschel / Hulliger / Bolliger, p. 9).

4 SECO, factsheet of April 29, 2014, p. 1. The free trade agreement signed by Federal Councilor Johann Schneider-Ammann on July 6, 2013 between the PR China, the world's second largest economy, and Switzerland comprises 1,152 pages (by Senger, Chinese-Swiss Free Trade Agreement, p. 517). At the same time, Federal Councilor Schneider-Ammann and the Chinese Minister for Human Resources and Social Security signed a bilateral agreement on labor and employment issues (SECO, factsheet of April 29, 2014, p. 1). The contract includes provisions on labor rights and environmental protection. However, human rights organizations miss explicit references to human rights, which is why they strongly criticized the agreement. The protection of human rights has been anchored in the constitution of the People's Republic of China since 2004, but, as in the period from 1937 to 1945, the CCP did not initiate this for humanistic reasons, but rather to resolve the “main contradiction” “need for modernization against backwardness ”(Scruzzi, p. 7; von Senger, Sinomarxismus, p. 244). On the “main contradiction” “China versus Japan” (1937-1945): von Senger, Sinomarxismus, pp. 237-240.

5 Helble, p. 38. However, this assumes that the Chinese border authorities implement the contract accordingly. The traded goods must meet high requirements with regard to the rules of origin. The rule here is that a significant part of the added value must take place in the country itself. For industrial goods, for example, domestic processing of at least 40% is required. However, minor changes to a product, such as ironing textiles, repackaging goods or removing dust, do not add value. However, only 20% of exports will be immediately exempt from tariffs. For heavy goods such as watches, food, pharmaceutical and chemical products, transition periods of five, ten or even twelve years apply (Helble, p. 38; Aiolfi, Freihandel, p. 30).

6 The FTA is not applicable to the special administrative areas of Hong Kong, Macao and Taiwan (Henschel / Hulliger / Bolliger, p. 9, note 2).

7 Henschel / Hulliger / Bolliger, p. 9.

8 Neither the EU nor the USA enjoy comparable privileges in trade with the People's Republic of China. The agreement not only brings lower customs duties - Switzerland Global Enterprise (Osec) expects savings of up to CHF 5.6 billion by 2028 - but also creates new terms and conditions. It offers Swiss companies operating in the PR China more legal security and thus enables a higher degree of planning. With regard to the protection of intellectual property, a particularly central point for the Swiss pharmaceutical industry, the FTA contains provisions that go beyond the WTO directive on “trade-related aspects of intellectual property rights” (trips). An evolution clause has also been built into the agreement, which makes it possible to make improvements to important issues (Aiolfi, Freihandel, p. 30).

9 The FTA of the PR China with Iceland dates from 2013 (Aiolfi, Handel, p. 31).

10 von Senger, Sino-Swiss Free Trade Agreement, p. 517f. “With the FTA, China wants to make Switzerland a stepping stone to Europe. With this idea, China is reacting to the increasingly difficult relationship with the EU states ”(Zhang, p. 19). Both the Chinese Prime Minister Li Keqiang and the Chinese party and state leader Xi Jinping mentioned in connection with the preference given to Switzerland in the conclusion of the FTA that, with the recognition of the PR China, founded in 1949, Switzerland was one of the first Western countries which had established diplomatic relations with the PRC. At the reception of the then Swiss Federal President Ueli Maurer in July 2013, Xi Jinping placed the FTA in the context of the two 100-year goals, which shows the long-term importance of the agreement from a Chinese perspective. On the one hand, by the 100th day of the founding of the CCP (2021), a society with modest prosperity, which will bring benefits to more than a billion people, is to be completed; Gross domestic product raised to the level of an emerging country and modernization essentially implemented (von Senger, Sino-Swiss Free Trade Agreement, p. 518; ders., China, p. 19; Coduri / Keller). Cf. Christof Forster, Switzerland as a flexible lone fighter in the Far East, in: NZZ from 07/19/2013, p. 19. - Switzerland is also the first western country to originate legal texts that have been translated into Chinese. These are excerpts from the work "Le droit des gens", which the Neuchâtel Emer de Vattel (1714-1767) published in Neuchâtel in 1758. In 1839, i.e. before the first opium war (1840-1842), the imperial commissioner Lin Zexu had some passages from de Vattle's book translated into Chinese in order to arm himself with additional arguments in his violent measures against the British opium sales in China Foreigners should make sense (von Senger, Sino-Swiss Free Trade Agreement, p. 537). See further: von Senger, Sino-Swiss Free Trade Agreement, pp. 520-536.

11 SECO, factsheet of April 29, 2014, p. 1.

12 Ziegler. The entry into force of the new double taxation agreement requires the approval of the parliaments of both contracting states. In Switzerland, the new DTA is subject to an optional referendum (Ziegler). The referendum period for the federal resolution on the approval of a new double taxation agreement between Switzerland and China from June 20, 2014 expires on October 9, 2014.

13 Ackeret, Renminbi-Hub, p. 17. The swap agreement has an initial term of three years and a volume of Renminbi-Yuan 150 billion (CHF 21 billion) for the purchase and repurchase of Renminbi and Swiss francs between the two central banks . At the same time, the Swiss central bank receives an investment quota of Y15 billion (CHF 2 billion) in the Chinese interbank bond market. This enables the National Bank to invest its foreign exchange reserves in mainland China in renminbi bonds in the future, thereby diversifying it further. Such agreements with the PBoC are necessary due to the not freely accessible Chinese capital market and the not freely convertible Chinese currency. However, the People's Republic of China is striving to internationalize the renminbi yuan and promote the global spread of the currency, which ultimately makes it necessary to open the capital market. Worldwide, the yuan has ousted the Swiss franc from the 7th place of the most traded currencies (Ackeret, Renminbi-Hub, p. 17; Fischer, p. 15).

14 Ziegler.

15 translated by Hyo-Sun Lee, ZChinR 18/4 (2011), pp. 322-326. This is the Decree of the Ministry of Human Resources and Social Security No. 16 published on 06.09.2011. The Provisional Method was discussed and adopted at the 67th Board meeting of the Ministry of Human Resources and Social Security. It was announced after approval by the State Council and carried out from October 15, 2011 (“Provisional Method”, p. 322). To enact: § 12 Provisional method.

16 When using the masculine form, the feminine is also meant.

17 Brkic, p. 34.

18 Ruch / Möller, p. 51.

19 In the German translation of Section 3 (2) Preliminary Method, there is no mention of being subject to accident insurance. According to Dr. iur. Barbara Darimont about a translation error. In the Chinese text, the accident insurance is listed in the margin. Foreigners therefore also have to take part in accident insurance.

20 Wignjosaputro, p. 10; Darimont, Social Insurance Act, p. 269. Contrary to the wording of the German translation of Section 3 (2) Preliminary Method, it is the companies that participate in the social insurance branches and have to pay the social insurance contributions - not the employees. There is also a translation error here. There is nothing in this paragraph in the original Chinese text about the payment of employees. However, they have to pay their contribution to the basic old-age pension, basic health and unemployment insurance. Accident insurance and pregnancy insurance are borne solely by the company. The information comes from Dr. iur. Barbara Darimont.

21 Territory: that is directly controlled by the government of the People's Republic, i.e. the currency area of ​​the Renminbi. Outside the area accordingly means: abroad, Taiwan, Hong Kong and Macao (SVG, p. 303, note 5).

22 in: ZChinR 18/4 (2011), pp. 302-321.

23 The census showed that almost 600,000 foreign citizens live in the PRC (Wignjosaputro, p. 10).

24 According to PricewaterhouseCoopers, there have not yet been any uniform regulations for foreigners. In some places foreigners (including Chinese compatriots from Taiwan, Hong Kong and Macau) were obliged to join the social security system. Elsewhere, on the other hand, foreigners did not even have the opportunity to do so (Villing, p. 4).

25 Wignjosaputro, p. 10.

26 Such an agreement eliminates the double burden of employers and employees through the obligation to contribute to the social security systems of the employing state and of the state in which the employment is temporarily carried out (Koch, p. 86).

27 Darimont, Social Insurance Act, p. 269.

28 This does not apply if there is a social security agreement. So far, the PR China has only concluded social insurance agreements with the Federal Republic of Germany and the Republic of Korea (= South Korea) (Darimont, Social Insurance Act, p. 269).

29 Reintgen.

30 Ruch / Möller, p. 51.

31 Anslinger. The free trade zone in Shanghai is intended to facilitate foreign investments through simplified or completely eliminated bureaucratic procedures, both for investments and in the commercial business of customs clearance. It should also offer tax relief, at least initially. In addition, it should be easier to set up branches or upgrade existing branches. Foreign companies do not need a permit to set up a company like in the rest of the PRC, they just have to register the company, which takes about two to three weeks and not two to three months as is usual in the PRC. This makes it easier for foreign banks to open branches and eases certain restrictions on them, such as the credit deposit rate. Bank joint ventures can also be dominated by foreign partners. The catalog includes a total of 18 sectors in which regulations are easier than those in the rest of the People's Republic of China. The Shanghai free trade zone goes further than the special economic zones established more than thirty years ago as pilot projects of the reform era, especially Shenzhen near Hong Kong.The 29 square kilometer free trade zone in the very east of Shanghai, in the Pudong developing region, is to become a training ground for major reforms that have been talked about for a long time. However, projects that fall on the negative list must still be approved. The current version of the negative list is so extensive that in fact most of the projects are recorded. Six sectors, primarily from the service sector, are to be further opened up to foreign investors in the free trade area, e.g. the financial sector. However, the hurdles for entrepreneurial activities therein are still great (Anslinger; Ackeret, Freihandelszone, p. 25; Ackeret, China rehearsing reform step, p. 18).

32 Arnaud.

33 Swiss Chinese Chamber of Commerce, p. 11.

34 Baudenbacher, p. 428f.

35 Schoettli, Country Gazette China, p. 2.

36 In detail on the NPC and its Standing Committee: Bu, pp. 25-28.

37 Wignjosaputro, p. 8.

38 Ruch / Möller, p. 51.

39 Tänzler-Motzek, p. 57; Wignjosaputro, p. 12f.

40 The CCP has its own organizational structure that is independent of the state organs. The Politburo and its Standing Committee, currently with nine members, form the highest circle of power; it is chaired by the general secretary (Bu, p. 29). On the leadership role of the CCP in detail: Liu, pp. 74f .; McGregor, pp. 1-33.

41 See Guido Mühlemann, China’s Multiple Legal Traditions, pp. 64-66; ders., Understanding Chinese Law. Why a Cultural Approach is essential, in: Sandra Hotz / Ulrich Zelger (eds.), Art and Culture. Analyzes and perspectives from assistants at the Law Institute of the University of Zurich, Vol. 12, Zurich / St. Gallen 2010, p. 353f.

42 von Senger, Future Goals, p. 10; Liu, p. 61.

43 Wignjosaputro, p. 13. Cf. Barbara Darimont / Dongmei Liu, The health care system of the People's Republic of China: Between privatization and public health care, in: International Social Security Review, Vol. 66, 1/2013, p. 97 -116; Barbara Darimont, Poverty: Introduction and Analysis, in: Ulrich Becker / Frans Pennings / Tineke Dijkhoff (eds.), International Standard-Setting and Innovations in Social Security, Alphen a / d Rijn 2013, pp. 135-138, 199-203 ; dies., Social Protection of Migrants in China, in: Ulrich Becker / Frans Pennings / Tineke Dijkhoff (eds.), International Standard-Setting and Innovations in Social Security, Alphen a / d Rijn 2013, pp. 345-360.

44 Kissinger, p. 538; Wignjosaputro, p. 3. In the PR China, a married couple can only have one child. The one-child policy was introduced nationwide in 1978, two years after the death of Mao Zedong, in order to keep the rapid population growth after the founding of the People's Republic under control (1949-1978: from 0.54 billion to 0.95 billion) bring to. To date, a married couple is only allowed to father one child in the cities. If they give birth to a second child, they have to accept significant sanctions. A maximum of two children are allowed in the countryside. Violations are punished with heavy fines. Sometimes a forced termination of pregnancy occurs (Bu, p. 98f .; Lee, p. 125; Schoettli, Asiaten, p. 58). Cf. Markus Ackeret, China's middle class is only a promise, in: NZZ from July 29, 2014, p. 21.

45 Darimont, Social Insurance Law, p. 120.

46 Olin Liu, chief economist at the Chinese investment bank China International Capital Corporation, considers the establishment of a social system with health and old-age insurance based on the western model to be a determining factor in increasing consumption (Hosp, p. 29).

47 According to Article 1, Paragraph 1 of the current (2011) constitution of December 4th, 1982, the PR China is "a socialist state under the democratic dictatorship of the people, led by the working class and based on the alliance of workers and peasants." Article 1, Paragraph 2 of the Constitution also stipulates: “The socialist system is the basic system of the PRC. The sabotage of the socialist system is forbidden to any organization or individual. ”The statutes of the Chinese Communist Party (CCP) also state:“ The Chinese Communist Party is the vanguard of the Chinese working class and at the same time the vanguard of the Chinese people and the Chinese nation [ ...] ". According to the constitution of the PRC, the CCP leads the state. In addition, the leadership role of the CCP is laid down in the preamble to the constitution, paragraph 7 (von Senger, Sinomarxismus, pp. 220f.). On the statute of the CCP (partially amended at the XVIIIth Congress of the Communist Party of China and adopted on November 14, 2012) (in German translation): http://german.china.org.cn/china/archive/cpc18/2012-09 /27/content_26653640.htm (visited on 08/05/2014). On the constitution of the PR China (in German translation): http://www.verfassungen.net/rc/verf82-i.htm (visited on 08/05/2014).

48 Schoettli, Geld, p. 38f .; Vogelsang, p. 612f .; Wignjosaputro, p. 4.

49 Zajac, pp. 70f. The rule of the CCP should be legitimized. Thus, in the first place in the relevant provision of the statutes of the CCP, Marxism-Leninism is emphasized. The "Sinization of Marxism", a formulation which Mao Zedong is said to have coined for the first time in 1938, means the expansion of Marxism with Chinese elements. Sinomarxism is expressly referred to in the CCP's statutes as the "guideline of action". According to Harro von Senger, the CCP is "not oriented towards Confucianism or any philosophical system that underpins capitalism." Rather, the CCP looks at Marxism-Leninism, the Mao-Zedong ideas (= the collective name for adaptations of Marxism-Leninism to Chinese conditions that originated primarily from Mao, but also from other leaders of his generation), the Deng-Xiaoping theory (= Theory of Deng Xiaoping [1904-1997], the de facto ruler in the PRC in the years 1979-1997: Sticking to the socialist path, the dictatorship of the proletariat, the leadership of the CCP, Marxism-Leninism and Mao Zedong Ideas) and the important ideas of "triple representation" (by Jiang Zemin, General Secretary of the Central Committee [Central Committee] of the CCP [1989-2002], President of the PRC [03/27/1993-15.03.2003] and Chairman of the Central Military Commission of the Chinese People's Liberation Army [PLA] [1990-2004]: Decision of the CCP on the needs of the development of China's advanced productive forces, on the direction of progress in China's advanced culture and about the fundamental interests of the vast majority of the Chinese people; cf. Statute of the CCP of October 21, 2007, General Program, Paragraph 1) as the guideline for its actions (Statute of the CCP, General Program, Paragraph 2) (von Senger, Sinomarxismus, pp. 221-224). Economic growth and solid progress in increasing private wealth are the most important elements in the CCP's leadership of the country (Schoettli, Asiaten, p. 55). Although the CCP is not oriented towards Confucianism, it “with its emphasis on hierarchies and loyalties [...] cannot escape the charge of being responsible for an authoritarian conception of society, even if the principle of 'humanity' is decisive here “(Senn, p. 217). A central value in Confucianism is mutual obligations. This also applies to the state and to the relationship between subject and ruler. On the one hand the subject has the duty to be obedient to the authorities, on the other hand the ruler has the duty to see to it that the land and the people are well. If he neglects these duties, he forfeits his right to rule, i.e. he loses his "mandate from heaven" (Schoettli, Asiaten, p. 56). “If we want to correctly assess the role of the state in the economy of today's People's Republic,” Schoettli concludes, “we have to say goodbye to the Western understanding of the state and society and to familiarize ourselves with the Confucian understanding of the state. For most of what is happening in China and has happened during the previous two centuries must be seen in the light of Confucianism ”(Schoettli, Asiaten, p. 358). Like Confucianism, Marxism-Leninism basically emphasizes social practice and gives instructions for this. "From Confucianism's endeavor to be a guide to action in the world, a straight path leads to the statement by the CCP that it sees Marxism-Leninism as 'the guideline for its actions' (CCP Statute, General Program, para. 2 ) considered ”(von Senger, Sinomarxismus, p. 248). Regarding the statute of the CCP (partially amended at the XVIIIth Party Congress of the CCP and adopted on November 14, 2012) (in German translation): http://german.china.org.cn/china/archive/cpc18/2012-09/27 /content_26653640.htm (visited on 08/05/2014). This explains the efforts of the current government of China to emphasize continuity with the past: “The renewal of official veneration of Confucius, though representing an about-face for the Communist Party, is not that hard to understand. It fits in with a general tendency by the current regime to emphasize continuity with the past "(Wasserstrom, p. 13). Since 2004 the Chinese government has supported the establishment and financing of “Confucius Institutes” in many parts of the world (ibid., P. 15). On Confucianism: Senn, pp. 202-211. On the fairly smooth connection of Marxism with traditional Chinese ideas: von Senger, Moulüe, pp. 40-44; ders., Introduction to Chinese Law, Munich 1994, p. 10ff .; ders., Recent Developments in the Relations between State and Party Norms in the People’s Republic of China, in: Stuart R. Schram (Ed.), The Scope of State Power in China, London et al. 1985, pp. 199ff.

50 Wignjosaputro, p. 6.

51 In contrast to the West, where politics has to subordinate itself to the law (“rule of law”), according to Sinomarxism, the original source of law is material existence, and the law of the People's Republic is therefore a “superstructure product”. As such, the law is an instrument of party politics (“rule by law”). The law of China is therefore neither an autonomous subject nor an autonomous discipline, but always subject to the CCP's socialist regime. This follows from Article 1 of the constitution of the PRCh (1982/2011) in connection with the statute of the CCP (2007) (Senn, p. 199; von Senger, Sinomarxismus, p. 232). One should therefore not underestimate the "role of 'scientific socialism' in the PRC [...], because it is usually strategic and tactical considerations that lead to the enactment or repeal of certain legal norms" (von Senger, Sinomarxismus, p . 225). The instrumentalization of the law with regard to political objectives has a long tradition in China. Even the representatives of the "law school" or "Legism" (also: "Legalism": fajia, 2nd half of the 1st millennium BC) considered "law as a [...] tool of the ruler" ( Zhengyuan Fu, China's Legalists. The Earliest Totalitarians and Their Art of Ruling, Armonk (New York) / London 1996, p. 57, quoted in Senger, Sinomarxismus, p. 247). On the legalistic tradition (Legism) as a partial basis for the reception of communism in China, "insofar as today's state, punitive and centralistic thinking has been prepared by it" (Senn, p. 217): Senn, p. 214-217.

52 The definition of a new "main contradiction" in 1978 was the trigger for the establishment of a comprehensive Chinese legal system that has since been established. The aim was to encourage foreign business people to invest and transfer technology to the PRC, which required a more or less functioning legal system and was not possible without the guarantee of human rights that would at least rudimentarily protect the individual against state encroachments (von Senger, Sinomarxismus, p. 243f. ). Cf. Harro von Senger, The Wave of Codification in the People's Republic of China - Problems for Chinese and European Legal Practitioners (Series of the Europa-Institut der Universität des Saarlandes No. 161), Saarbrücken 1989. - The norm that defines the "main contradiction" and thus the " Main Task ”is called the“ CCP Political Line ”. All other norms, especially legal ones, are influenced by it. All further contradictions (“secondary contradictions”), which are at different levels of importance, are grouped around the “main contradiction”. To resolve the “main contradiction”, party norms of different ranks and legal norms are issued for the regulation of the “secondary contradictions”. The neglect of a "secondary contradiction" can endanger the solution of the "main contradiction" if it is tightened. “Secondary contradictions” are therefore to be resolved simultaneously with the “main contradiction” in such a way that their solution is helpful for resolving the “main contradiction” and does not interfere with it (von Senger, Sinomarxismus, p. 239f.). Regarding party norms: Harro von Senger, Introduction to Chinese Law, Munich 1994, p. 290ff. - Regarding the legal norms: ibid., P. 43ff.

53 Statute of the CCP, General Program, Paragraph 9. The "main contradiction" is first reflected as a basic norm in the constitution of December 4th, 1982, which stipulates that the main task of the nation is to promote the development of socialist modernization with the concentration of all forces. After Mao's death (1976), the "main contradiction" formulated by the 8th Congress of the CCP (1956) was reverted, albeit in a slightly different formulation. Since 1978 the Chinese people have been tasked with solving the “main contradiction”, “need for modernization versus backwardness”. In the period marked by this “main contradiction”, which has lasted since 1978 and is planned to run until 2049, the word “people” includes all Chinese who willingly participate in the development of socialist modernization, also as individual traders or as millionaires. In defining the main contradiction, the CCP put the "material needs of the people" first and subsequently focused the expression "material needs" very narrowly, i.e. on increasing the gross domestic product. On July 1st, 1979, for example, the first foreign trade law of the People's Republic of China, the joint venture law, was promulgated because the main contradiction cannot be resolved without foreign investment and technology. The joint venture law and the entire foreign trade law up to the WTO accession of the People's Republic of China on December 11, 2001 appear as instruments to resolve the main contradiction, as do the standards for the introduction of the so-called “socialist market economy”. The solution of important "secondary contradictions", such as between the development of the economy and environmental and nature protection, was temporarily neglected. Therefore, until recently, environmental protection law was overshadowed by the considerably expanded domestic and foreign trade law (von Senger, Sinomarxismus, pp. 242-249). For the specific wording of the definition of the “main contradiction” from the 8th Party Congress (1956): Harro von Senger, Party, Ideology and Law in the PR China, Bern / Frankfurt aM 1982, p. 28. - On the constitution of the PR China (in German translation): http://www.verfassungen.net/rc/verf82-i.htm (visited on 08/05/2014).

54 Senn, p. 199; von Senger, Sinomarxismus, p. 248f.

55 Business law as an extremely dynamic area of ​​norms is seen to a large extent as relevant to the main contradiction and is therefore experiencing a possibly radical reorientation from "period" to "period", in contrast to more static norm areas such as road traffic law, in which the direct connection with the "main contradiction" is not so obvious (von Senger, Sinomarxismus, p. 240f.).

56 So far there has been a lack of coordination of the individual insurance branches (unemployment insurance, occupational accident insurance, health insurance, maternity insurance, old-age pension insurance) (Souheur, p. 33).

57 The previous old-age pension insurance and health insurance can mostly only be used by those who are registered in a city. At least the government has succeeded in obliging all non-state companies to pay into the state pension funds, so that the coverage of the nationwide employees is now around 30% (Lee, p. 125f.).

58 The "Harmonious Society" has been propagated by the government as a model for Chinese society since 2005 (Wignjosaputro, p. 13).

59 Darimont, Social Insurance Act, pp. 266-268, pp. 274; Wignjosaputro, p. 8.

60 Peter Hefele / Eileen Lemke, 3. Schoettli, Geld, p. 34. The “material needs of the people” to be satisfied according to the “main contradiction” defined since 1978 have been used by the leadership of the People's Republic of China until recently in the sense of a interpreted in percentages of high annual growth in gross domestic product."The fact that, for example, clean air and clean water could be a 'material need of the people'" has only recently become apparent to the Chinese leadership, especially when it comes to legal enforcement measures "(von Senger, Sinomarxismus, p. 250).

61 Ackeret, growth target, p. 21; Hefele / Lemke, p. 3.

62 See Li, pp. 267-290 ("Legal Risks for Foreign Investment in the Insurance Industry").

63 Ackeret, China's retiree.

64 Münzel, p. 280.

65 The CPC Politburo is subordinate to the State Council (McGregor, p. 15).

66 Darimont, Social Insurance Act, p. 267.

67 Bu, p. 29.

68 Xu, pp. 133f .; Ruch / Möller, p. 51.

69 Bösch, p. 41.

70 Ruch / Möller, p. 53.

71 There are, for example, 4 general social security norms for general social security: Provisional method for reporting social security contribution payments from 19.03.1999 (printed in: Official Journal of the State Council 1999, No. 13, pp. 21f.); Method for monitoring and checking social security contribution payments from 19.03.1999 (printed in: Official Journal of the State Council 1999, No. 13, p. 522ff.); Rules for collecting social security contributions from January 14th, 1999 (German with reference to source in: Münzel [ed.], Chinas Recht January 22nd, 1999/1); Provisional method for social security registration from 19.03.1999 (printed in: Official Journal of the State Council 1999, No. 13, p. 514ff.).

72 Wignjosaputro, pp. 11f .; Münzel, p. 281.

73 Darimont, Social Insurance Act, p. 267.

74