International discussions on ending double contributions under way

Social insurance payments, for foreigners in China and Chinese citizens working overseas, will be simplified under international agreements currently being discussed, a senior social security official said.

"We've held three rounds of talks with Japan and one round with France, and we have also held initial discussions with Sweden and Belgium," said Xu Yanjun, deputy director of the Social Insurance Administration under the Ministry of Human Resources and Social Security, in an exclusive interview with China Daily.

Xu said 11 countries, including Finland, Singapore, Denmark, Spain and Switzerland, have expressed their willingness to negotiate with China since a regulation, which stipulates that all foreigners working in China will be covered by social security, took effect on Oct 15, 2011.

China's Social Insurance Law allows foreign workers to enjoy retirement, medical, work-related injury, unemployment and maternity insurance similar to those for Chinese citizens.

Workers and employers in China collectively pay endowment, medical and unemployment insurance but employers are responsible for paying for work-related injury insurance and maternity insurance.

Germany and South Korea have signed reciprocal agreements with China.

The agreement between China and Germany exempts workers from the other country from paying endowment and unemployment insurance.

The deal with South Korea exempts workers from paying endowment insurance, Xu said.

"The two agreements have benefited 4,500 Germans and 2,000 Koreans working in China, as well as 10,700 Chinese working in those two countries," he said.

Agreements such as these are common practice in other countries as they help avoid double payment of social insurance contributions.

Negotiating teams are made up of each country's social security and foreign affairs departments, he said.

"Negotiations mainly focus on the type of insurance the deal might cover. Each party has their own considerations. It normally takes a year or two to complete the negotiations and sign the deal," Xu said.

Maiko Niwa, who works at a media firm in Beijing, welcomed the possibility of an agreement.

She contributes jointly with her company for medical insurance and she will begin to pay endowment insurance in June.

"I hope the agreement that the Chinese and Japanese governments are discussing will exempt me from paying endowment insurance because it's a burden and I don't know how long I will stay in China. Besides, I have already participated in similar insurance schemes in Japan," Niwa said.

She hopes that the medical insurance policy will continue because it is convenient to go to hospitals covered by Chinese insurance and she can have some of her medical charges reimbursed.

A Swedish citizen also welcomed the benefits an agreement would bring.

"It will be good news if it is signed because I think there is little possibility of me retiring in China," said Eskil Hallstrom, 27, who works at a Beijing public relations company.

But he wants medical insurance exempted because his private insurance he bought in Sweden covers medical expenses in China.

Workers in China pay 8 percent of their wages, and employers pay an amount equal to 20 percent of workers' wages each month, to pension accounts. Workers must contribute to the pension for at least 15 years to collect it after retiring.