China

CHINA   1. INTRODUCTION This report is completed from training section about sending Pizza hut management staff to new franchise which is located in China. The main business of Pizza hut is in Beijing, thus the Beijing would be more detailed. The background information of economic, politic and social culture will be given and analysed. Furthermore how these local situation effect foreign employee’s daily life will be talked about. The scope of the training section is that help foreign employee adapt to local life as earlier as possible, given this scope of training section, this report will focus on custom of China. Professional management and working skill will be skipped in this time. The scope of this report also represents one of important function of human resource department—measuring the employee and employer’s needs and dealing the staff’s performance (Cater McNamara, 2010). Helping new staff handling new working environment is responsibility of human resource department. 2. CHINA’S ECONOMY In china, economic keeps increasing in stable pattern. We could look this issue in next pattern. 2.1 Import and export According to research, the total value of export of china reached 12180.2 us dollar, it increases 25.7 percent in 2007. The value of import reached 9558 us dollar in the same period, it increased 20.80 percent. And we know, china is one of largest market in the world and it is largest export country as well. 2.2 Inflation China has problem in inflation for long time (BBC, 2010). And it keeps increase recently. The price of daily product is growing, but income of people did not. The economic expert holds different idea. Some of them think it is normal because china is the largest export country; most of products transfer to overseas, thus price increasing is normal result. Others think that Chinese people are affected by inflation. Income did not improved to the same level with the price of good. And government take emergency measure like gain interest can take slow down of inflation but it cannot fix it. 2.3 Unemployment rate Unemployment rate in china always keep high. China has large population; competition for employment is quite fierce. And there is large number of people are under educated. These under educated people are the main unemployment group. 2.4 Interest of bank The interest of deposit in china is 3.3% for long-term (more than one year). The interest of bank is according to the how long you deposit (bank of china, 2010). 3 SOCIAL To gain a clear idea about the social culture of the surrounding society can let the employee benefit from his work environment. In order to achieve this goal, to increase the culture awareness is critical for the individual to get the feeling of belonging to the host country. (Dowling, et al 2008) 3.1 The Population of China China’s population is the largest and most populous country in the world by the mid-2008 which is over 1.3 billion people. The world’s population is about 6.7 billion and China’s population occupies 20% of the total world’s population. That’s mean every one of five people is a resident of China. Because of the tremendous population, Chinese government implemented one child policy in 1979. Hence most people in China born after 1979 is the only one child in their family. By the end of 2010 China’s population is expected to reach 1.4 billion. And china’s total fertility rate which is 1.7 is lower than the necessary total fertility rate for the stable population which is 2.1. In order to keep the stable population in China, the government issued the new policy which stated if two persons married and they both the only one child in their family they can give birth two children. (Rosenbery 2010) 3.2 Ethnic Minorities of China As a large united multi-national state, China is composed of 56 ethnic groups. Among them Han Chinese account for 91.59%of the overall Chinese population and the other 55 ethnic groups account for 8.41%. The Han Chinese can be founded in everywhere in China. Han Chinese is the largest ethnic group in China and also largest in the world. The other 55 minority ethnic groups are distributed the different regions of China. The Chinese government introduced a series of policies to ensure the 56 Chinese ethnic groups live together in harmony. (Chinese Ethnic Groups 2010) 3.3 Build Up Networking in China A good relationship with people can help you get the new network and join in it. Networks became important for both business and social contexts. (Dowling, et al 2008) Especially for the foreigners, making the good relationship with people is necessary for living in the foreign country. In this way you can build up the valuable social and business assets. The main way to establishing the relationship in China is through the tired party. This could be one of your Chinese friends, employees or home country’s friends. Our company always held some simple meeting or trade events; you also can through it to build up the relationship. Understanding the Chinese history and culture and speak some Chinese phrases are also the tool to help build up the relationship. (Dealing with China's culture and business protocols 2008). 3.4 Language “The ability to speak a foreign language can improve the expatriate’s effectiveness and negotiating ability.”(Dowling, et al 2008) Chinese language has over 400 dialects such as Mandarin, Cantonese and Pekingese. The official language of China is Mandarin. The people in China from different province got different dialects. Even the people from the different city, town and village have their own special dialect as well. Most people can speak both Mandarin and their local language or dialects. Nevertheless Chinese written language is same throughout all of China. (Dialects 1998). English is becoming more and more common in the large cities such as Beijing and Shanghai. Most young generation in China can speak English due to the English education in school. (How to deal with language differences 2008) 3.5 Numbers to Avoid Some business people in China are sensitive to number, especially in the southern of China. Lucky numbers:  3 when pronounced in Chinese, sounds similar to the word for  6 when pronounced in Cantonese is similar to the word for happiness.  8 when pronounced in Chinese, sounds like a similar word which means prosperity.  168 when pronounced in Chinese, sounds like a similar phrase which means money flowing in easily. Unlucky numbers to be avoided:  4 when pronounced in Chinese, sounds like the word for death  250 when pronounced in Chinese, sounds like the word for dumb/stupid. (Dealing with China's culture and business protocols 2008). 4 GOVERNMENT IN CHINA The Chinese government is viewed by quite a few political scientists as one of the previous five Communist states (along with Vietnam, North Korea, Laos, and Cuba), but simple classification of china political structure since the 1980s are no longer potential.[9] The government has been variously illustrated as communist and socialist. contrast to its closed-door policies until the mid-1970s, the liberalization of the china political is such that the administrative climate is less restrictive than before, nevertheless the PRC is still far from the liberal democracy practiced in most of Europe or North America, and the National People's Congress has been described as a "rubber stamp" body. With 2.3 million active troops, the People's Liberation Army (PLA) is the largest military in the world.[98] The PLA consists of an army, navy, air force, and strategic nuclear force. It was declared in 2007 that the PLA budget was $70 Billion. China has recognized diplomatic relations with 165 countries in the world. It is one of five permanent associate of the United Nations Security Council. . The current government of china is owned by President Hu Jintao and its Premier is Wen Jiabao. 4.1 Business with Chinese Every time you do a business with Chinese guy you have to be formal and it is constantly done in a fancy restaurant. Most Chinese business man drinks first before the deal occurs in south of china and in north its other way around, people drink and celebrate when the deal is done. 4.2 Avoid giving gift Never give a clock as a gift to Chinese. Because clock represents in mandarin pronunciation as “attend upon a dying parent or other senior member of one’s family” 4.3 Religious Affiliation Predominantly: Buddhism, Taoism and Confucianism (Ancestor Worships). Minorities: Christianity (3% -4%), Islam (1.5%), others Note: State atheism, but traditionally pragmatic and eclectic. 4.4 Chinese Cuisine Regional Cuisines Overseas Cuisine Religious| Cuisine Ingredients and types of food 5 DEMOGRAPHIC OF PEOPLE’S REPUBLIC OF CHINA Population: 1,321,000,000 (2007 est.)(rounded) Growth rate: 0.629% (2008 est.) Birth rate: 13.71 births/1,000 population (2008 est.) Death rate: 7.03 deaths/1,000 population (2008 est.) Life expectancy: 73.18 years (2008 est.) –male: 71.37 years (2008 est.) –female: 75.18 years (2008 est.) Age structure: 0-14 years: 20.1% (male 142,085,665/female 125,300,391) (2008 est.) 15-64 years: 71.9% (male 491,513,378/female 465,020,030) (2008 est.) 65-over: 8% (male 50,652,480/female 55,472,661) (2008 est.) 6 USEFUL INFORMATION FOR EXPATRIATES WORKING IN CHINA 6.1 CONTRACT The Labour Law requires the establishment of an employment or labour contract between the employer and employee for the purposes of recording an employer-employee relationship (Deacons, 2005). For expatriate workers who want to work in China, they have to get a clear statement on the length of employment in the contract - an important factor that affects on expatriates’ intention to stay or leave (Adler, N.J. 2008) (Figure 1). In addition, some work-related factors need to be taken into account such as the salary details, payment dates and currency they are paid in, taxes that will be deducted from the pay, the terms of overtime work and holiday policies. Also, they have to make sure that any ‘extras’ such as housing, travel expenses and mobile phone costs are stated in the employment contract. Source: Google Image Most importantly, expatriates have to check in advance on what terms they can leave their job and the company’s procedure if it decides to terminate their employment. For maternity leave, the law in China states that women 25 years and older are entitled to four months off work after giving birth and whom under 25, they’re only entitled to three months (Labour Law of People’s Republic of China, 1995) FIGURE 1: FACTORS MODERATING PERFORMANCE 6.2 BASE SALARY and ALLOWANCES Base salary and allowances are critical components of an international compensation program (Adler, N.J. 2008). Table 1 shows the salary information of Human Resource Department of Hudson Corporation - one of the world’s leading professional recruitment and talent management solutions providers - in Hong Kong, Shanghai, and Singapore. These up-to-date salaries might be considered a general indication only because salaries can differ due to industry type and company size. However, expatriates might see these salary ranges very useful to get a ‘big picture’ of base salary in China. TABLE 1: SALARY INFORMATION OF HUMAN RESOURCE REPARTMENT Source: Hudson’s salary information report Salaries depend on the position and industry, but many expatriate salaries in China range from US$ 25,000 – 100,000 per year. Besides, the employment package will depend on whether a certain ideal expatriate worker is hired from abroad or locally. For instance, if an Australian is employed, he/she can expect a salary according to Western European or US-standards and a full range of benefits as following: Standard bonuses month salary or less Standard raises -vary from year to year -normally between 5-15% Housing/ Accommodation allowance up to US$1500 per month Healthcare private healthcare insurance plan offered Holidays/Vacations -3-5 weeks paid vacation -sometimes includes a yearly return flight to home country -A round trip air ticket once a year Evacuation insurance Yes Tax coverage Yes Language lessons payment Yes Mobile phone/Car Yes * *In high-level positions, he/she will a car and/or driver, or at least have travel to and from work reimbursed Source: Working Conditions in China (Dan, 2007) 6.3 TAX According to China Income Taxes and Tax Laws, any non-Chinese passport holder working for a local company, a foreign company or a wholly foreign-owned enterprise in China needs to pay tax (China Tax System, 2009). Employees who live and work in China for more than 183 days a year, will be liable to pay Chinese taxes on all income received whilst in the country. Personal income tax is charged on a sliding scale, ranging from 5% to 45%. If an employee also receives income from overseas, they will be taxed in China on their worldwide income, with a tax credit given against any tax already paid in other countries (China Tax System, 2009). • The first RMB 4,800 pay each month is tax free. • Tax payable = (Your salary – RMB 4,800) • Tax is deducted from an employee’s pay each month by the employer and is then paid to the government TABLE 2: THE MONTHLY TAX ON INCOME Source: China Tax System 6.4 WORK PERMITS/VISA Expatriates who want to work in China should first approach an employer who has an employment license for foreigners, issued by the relevant labour administrative bureau (Sang, S 2009). According to Sang Simon – a lawyer of a law firm in Shanghai, China - these are the procedures for applying for work in china: 1 Before the employee entering china, the employer should apply for Employment License first in municipal Labor and Social Security Bureau Reception Center of Employment Affairs of Foreigners. 2 The employer shall apply a letter of Z visa notification go through formalities 3 The employer shall mail the document above and original Employment License to the employee overseas 4 The employee shall apply forthwith for Z visa at Chinese embassy/consulate/Visa office in Employees’ nation with a letter of Z visa notification and original Employment License, and other required document of government within 30 days from date of the letter issue. 5 After entering China with Z Visa, the employee shall make Physical examination at Shanghai Entry-Exit Inspection and Quarantine Bureau 6 If passing the Physical examination, the employer shall apply for the Employment Permit 7 Registrant temporary residence in Police Station where the employee Resident 8 Foreigner shall go through formalities for the residence permit at Shanghai Entry-Exit Inspection and Quarantine Bureau within 30 days from date of entrance. The application should be made on the employee’s behalf by the employer Source: How to Get an Employment Work Permit and Visa in China Working Visa (Z) is issued to foreigners who will be employed in China and their accompanying family members. It is an entry visa and as such must be exchanged for a Residence Permit within 30 days of entry into China. The residence permit is tied to the employer. If an employee changes employers whilst in China, they will have to apply for a new residence permit ((Sang, S 2009). 6.5 WORKING HOURS According to Labour Law of People's Republic of China, the standard working time is 40 hours per week. Workers should be paid 1.5 times the regular wages for each hour over 40 hours worked during regular working, and double time for hours worked during weekend. Workers should receive - RMB 350 for the first 40 hours (or RMB 2.18/per hour), - RMB 262.4 (RMB 65.6 per week) for the overtime during regular work days (4 hours per day, 5 days a week at time and a half), and - RMB 418.6 for the hours worked on Saturday and Sunday, compensated at double time (12 hours per day for four weeks) 6.6 PUBLIC HOLIDAYS Besides the regular days off (Saturday and Sunday), China has 16 legal festivals Spring Festival, Qing Ming Festival, May Day, Dragon Boat Day, Mid-Autumn Day, National Day, and New Year's Day. The other nine are for special industries or specific people like Women's Day, Arbor Day, Youth Day, International Nurse Day, Children's Day, Anniversary of the Founding of the Chinese Communist Party (the Party's Birthday) and Army Day of the Chinese People's Liberation Army, Teacher's Day, and Journalists' Day. Some people have a half day off on the following national holidays or anniversaries. Women have half day off on Women's Day. Young people over 14 years of age have a half day off on Youth Day. Children under 14 years old have a day off on Children's Day. Active members of the army have a half-day holiday on Army Day. People celebrate these special national days but they do not have time off: Arbor Day, International Nurses' Day, Anniversary of the Founding of the Chinese Communist Party, Teachers' Day, and Journalists' Day. TABLE 3: PUBLIC HOLIDAYS SCHEDULE IN CHINA Source: Travel China Guide 7 CHARACTERISTIC OF CULTURE According to Characteristics of Culture Model, expatriates have to learn how to adapt to new working environment especially things such as food culture and chopsticks culture 7.1 CHINA FOOD Colorful, aromatic and delicious are characteristics of China's varied cuisines 1. Jiaozi, or dumpling, is a traditional and popular food with a long history in China. There is a popular saying in China: "There is nothing more delicious than Jiaozi." so you could imagine how much Chinese love it. 2. Long noodle is the symbol of longevity in China, 3. Fish is always served to symbolize accumulations of prosperity and wealth with the New Year's Eve meals. 4. There are other foods and snacks, which symbolize good wishes under special circumstances. These include duck, chicken and melon seeds 7.2 CHOPSTICKS CULTURE 1. Chopsticks reflect gentleness. Chinese consider a knife and fork to represent a sort of violence, and to resemble cold weapons. 2. If you find an uneven pair at your table setting, it means you are going to miss a boat, plane or train. 3 Dropping chopsticks will inevitably bring bad luck. 4 Never stick your chopsticks upright in the rice bowl, since that usually appears on the funeral and is deemed extremely impolite to the host and seniors present. 5 Don't tap on your bowl with your chopsticks, since that will be deemed insult to the host or the chef. 6 Crossed chopsticks are, however, permissible in a dim sum restaurant. The waiter will cross them to show that your bill has been settled, or you can do the same to show the waiter that you have finished and are ready to pay the bill. 8 EVALUATION RESULTS Most of participants evaluated the presentation from medium to excellent scale. They felt interested in chopsticks culture, eating habits, and numbers avoided. In addition, they also found the You Tube clips interesting and useful. In the result, 90% of participants were willing to live and work in China if they get the chance and will absolutely apply knowledge and information provided in order to be adaptive in new working environment 9. RECOMMENDATION Taken all of these into account, it is recommended that company should have local staff of china to help new staffs; due to limitation of information, hiring the local people can help company improve knowledge about china. And then Training section is mere first step, HR department have to do the follow up action to make sure staff can work probably after they arrived in china. It is import to inform staff that they can get help as long as they need. 10. CONCLUSION This report introduced the basic information of china. In the economic part, there are development pattern, inflation, export and import and payment. Through this part, staffs make sense about their living fees and payment. Then social culture introduction can help staffs know how to behaviour themselves when they dealing social relationship with local people. And some other information likes tax, medical care and weather is necessary as well. This report do not only give information, the goal of this report is that helping staff get in to new life and make sense about new working condition through these information. 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