Tag: China

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What is Good Guanxi in China’s Culture?

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Learn more about Relationships and Doing Business in China

What is good guanxi (pronounced gwon-she) in China’s culture? 

In some cultures, the task at hand is the primary focus of business. These cultures tend to use clear language and have direct communication styles. It is easy to see whether a product, a transaction, or an activity benefits each party. Relationships are not the primary driver of economic activity.

In China, the main priority in business is building and maintaining relationships rather than focusing solely on completing tasks. The culture in China places great importance on whether a relationship can bring about connections or benefits for both parties. The term “guanxi” embodies these relationships.

Parties that accept guanxi must return it in equal measures. While guanxi can take many forms, it should be seen as given voluntarily. Exemplary forms of guanxi may result in lower obstacles to doing business in China. Guanxi must also be maintained going forward to keep the relationship adequately positioned.

How Should a Company Build Good Guanxi?

A few general guidelines exist for companies that want to do business in China. The company should build a business network with a focus on good guanxi:

  • Introductions should be made by those who already have good guanxi with the prospect
  • First meetings should be in person, not by electronic devices
  • Remember that the relationship is at the personal level, not the organizational level
  • It may take longer to build good guanxi than you might expect
  • Dependability and reliability must be hallmarks of the relationship
  • Trust is with the network and the connections, not with the organization

What are Important Points to Consider for Good Guanxi?

While understanding guanxi will generally help those looking to do business in China, the concept has essential nuances. As a result, working to generate good guanxi may result in poor business relationships. Points to consider include:

  • The downsides to guanxi that sometimes correlate with questionable business practices
  • Fundamentals of business are essential, and good guanxi alone may not provide solutions
  • You must view guanxi across individuals, government structures, and corporate organizations
  • Good guanxi may vary by location, industry, and corporate focus

What Does This Mean?

Companies looking to develop operations or expand business opportunities in China must understand guanxi. China has a distinct culture and rich history, just as all countries do. 

As a result, there is rarely a single answer or a simple guide for a company seeking to do business in China. Research, education, and understanding the importance of business relationships and good guanxi will help companies determine how to proceed with their strategic objectives.

What Should Employers Do?

Companies with plans for business expansion should work with an experienced and knowledgeable Relocation Management Company (RMC). RMCs provide the necessary insight and solutions, including cultural and language training. A trusted RMC can help companies understand China’s culture, history, government, and industrial sectors. Companies should also learn the concept of guanxi and examine how to develop a network of business relationships.

Companies looking to test their expansion efforts in China might benefit from an International Professional Employer Organization. This is a global employment solution where a third party in a foreign country hires employees on your company’s behalf.

Companies contemplating the relocation of newly hired employees or transferees to China ought to assess their relocation schemes to guarantee their competitive edge and ensure that their employees receive top-notch relocation benefits and services.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients understand how they can quickly expand their business operations to new locations. Our team can help your company understand how to develop in China, focusing on good guanxi through relocation or utilizing an International PEO.

Learn best practices from Global Mobility Solutions, the relocation industry, and technology experts dedicated to keeping you informed and connected. Contact our experts online to set up a free consultation.

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Properly managing a visa and immigration program involves meticulous coordination, precise communication, and worldwide interaction with government agencies, corporate personnel, and relocating employees.

At GMS, we provide you with peace of mind in knowing your mobility program is fully compliant and being managed by the best in the industry.

Request a no-pressure, courtesy consultation from a GMS Mobility Pro. We’ll be in touch within 1 business day.

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Global Relocation Global Relocation Challenges Global Relocation Tips Global Relocation Trends Immigration Rules Visas and International Travel

2020 Inbound Immigration to the United States: Where are the Workers Coming From?

indian students in a class room

The U.S. Department of Homeland Security (DHS) reports that 2020 inbound immigration for the Fiscal Year (FY) First Quarter saw over 117,000 foreign nationals enter as new arrivals. This number is the same as the FY 2019 First Quarter figure.

Table 1B in the report shows 6,839 new arrivals in the employment-based preferences category. This total is further delineated by several employment-based classes, including:

First: Priority workers 493
Second: Professionals with advanced degrees, exceptional ability 1010
Third: Skilled workers, professionals, and unskilled workers 3537
Fourth: Certain special immigrants 589
Fifth: Employment creation (investors) 1210

The U.S. Department of Labor (DOL) issues labor certifications for both permanent and temporary employment of foreign workers under several programs:

  • Permanent Labor Certification
  • H-1B Specialty (Professional) Workers
  • H-2A Temporary Labor Certification (Seasonal Agricultural)
  • H-2B Temporary Labor Certification (Non-agricultural)
  • D-1 Crewmembers Certification

Foreign workers hired under these programs represent a portion of the new arrivals for employment-based preferences in the 2020 inbound immigration figures reported by DHS.

2020 Inbound Immigration: Countries of Origin

New arrivals in the employment-based preferences are part of the category of “Lawful Permanent Residents.” DHS notes that thirty-seven percent of new lawful permanent residents arrived from six top countries of origin:

  • Mexico
  • People’s Republic of China
  • Vietnam
  • The Dominican Republic
  • India
  • The Philippines

According to the Migration Policy Institute (MPI), immigrants from Vietnam usually arrive to the U.S. through family reunification, not through employment channels. The same holds true for immigrants from the Dominican Republic.

By comparison, MPI notes that Chinese nationals received the second-largest number of H-1B visas in FY 2018, after Indian nationals. For Indian nationals, MPI reports that nearly half of the immigrants from India obtained lawful permanent residence through employer sponsorship.

2020 Inbound Immigration to the U.S. from India: Where are the Employment Centers?

The top 5 states where more than half of the 2020 inbound immigration from India reside are:

  • California
  • New Jersey
  • Texas
  • New York
  • Illinois

The top 4 counties that serve as destinations for 2020 inbound immigration from India are:

  • Santa Clara County, California
  • Middlesex County, New Jersey
  • Cook County, Illinois
  • Alameda County, California

The two counties in California comprise the bulk of Silicon Valley. Cities in Santa Clara County include San Jose, Mountain View, and Palo Alto. Alameda County includes the Bay Area cities and towns across the bay from San Francisco: Berkeley, Oakland, Hayward, Fremont, and Pleasanton.

Middlesex County in New Jersey includes the cities and towns of Edison, Woodbridge Township, New Brunswick, Sayreville, and South Amboy. This county is known for its long history of innovation.

Cook County in Illinois includes the cities and towns of Chicago (a high-tech hub), Evanston, Schaumburg, Des Plaines, Oak Lawn, Orland Park, and Elk Grove Village. Chicago is the third largest city in the nation.

According to MPI, immigrants from India have a much higher educational attainment compared to other immigrants and the U.S. population as a whole. This is due to how they enter the U.S.: either as international students, or as H-1B visa workers at jobs requiring a university degree. For FY 2016, immigrants from India accounted for 74% of the H-1B visa petitions (both initial and continuing employment) approved by the U.S. Citizens and Immigration Services (USCIS).

New National Education Policy in India Focuses on Technology

India’s Union cabinet has proposed significant changes to the country’s national education policy. The goal is to align education to the requirements of today’s workforce and employer needs. The policy recommends that education include teaching coding in school from the sixth standard onward. Ultimately, the policy aims to impart mathematical thinking and an interest in scientific topics in students. This trend has impacted 2020 inbound immigration from India.

The national education policy is being revamped to further align with India’s Sustainable Development Goals (SDGs). The SDGs were adopted by United Nations member countries in 2015 to serve as a call to action to eliminate poverty, protect natural resources, and bring prosperity and peace to all by the year 2030. SDGs aim to transform the world and strengthen universal peace.

What Does 2020 Inbound Immigration Mean for Employers?

Employers should learn about the current immigration trends and how they might impact their future ability to hire foreign nationals. While India has seen much success as the nation works to reach their SDGs, many other nations are also investing in education.

Also, several nations are pursuing significant educational reforms, including:

  • Mexico
  • Pakistan
  • Papua New Guinea
  • Poland
  • Vietnam

This may lead to greater competition from foreign nationals of these nations for immigration to the U.S. and the many opportunities this presents to them and their family members.

Where Can Your Company Get Help to Leverage 2020 Inbound Immigration?

Global Mobility Solutions has a team of global relocation experts who can help your company understand how to leverage immigration trends to benefit your talent acquisition and relocation programs. Our team’s knowledge and access to visa and immigration resources is unparalleled in the industry. We have helped thousands of companies navigate the U.S. visa program and H-1B visa lottery process reach successful results.

Conclusion

Global Mobility Solutions’ team of global relocation experts has helped thousands of our clients understand how to attract and hire the best candidates for job openings. Our team can help your company learn how to leverage visa programs and other creative solutions to hire foreign nationals. As a result, your company will have greater success with corporate objectives and be able to benefit from 2020 inbound immigration.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

New SafeRelo™ COVID-19 Knowledge Portal

GMS recently launched its new SafeRelo™ COVID-19 Knowledge Portal featuring a number of helpful resources including:

  • Curated selection of news and articles specific to managing relocation programs and issues relating to COVID-19
  • Comprehensive guide to national, international, and local online sources for current data
  • Program/Policy Evaluation (PPE) Tool for instant relocation policy reviews

Contact our experts online to learn more about how your company can benefit from the 2020 inbound immigration to the U.S., or give us a call at 800.617.1904 or 480.922.0700 today.

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Global Mobility Global Relocation Global Relocation Challenges Talent Mobility Visas and International Travel

Asia Relocation Trends: What Does the Future Hold?

Petronas Towers, also known as Menara Petronas is the tallest buildings in the world from 1998 to 2004.

As global economics combine with geo-political forces, Asia relocation trends reflect changing business priorities. Past trends led China to become a major destination for manufacturing, jobs, and relocation. However, recent trends show multinational companies are moving production outside of China. The US-China trade war is often cited anecdotally as a reason for this shift, and there is some evidence to support this claim.

The US-China trade war is only part of the reason for changes in Asia relocation trends. Economic factors in China such as rising costs as well as shifts in company market shares also impact talent mobility. Changing demographics also impact how companies might pursue global expansion. These forces lead companies to find new locations for manufacturing facilities in Asia.

Asia Relocation Beyond China

There are several countries, regions, and zones seen as viable alternatives to China for manufacturing and operating facilities. Several of these countries are members of the Association of Southeast Asian Nations (ASEAN), consisting of ten members:

  1. Brunei
  2. Cambodia
  3. Indonesia
  4. Laos
  5. Malaysia
  6. Myanmar
  7. The Philippines
  8. Singapore
  9. Thailand
  10. Vietnam

Spotlight on Malaysia: Asia Relocation Trends

Kuala Lumpur is the national capital and largest city in Malaysia. The city of Putrajaya is the seat of the federal government. Malaysia has an estimated population of over 30 million people. The country is multi-ethnic and multi-cultural. Approximately 50% of the population is ethnically Malay, and there are large segments of Chinese, Indian, and native populations.

Malaysia Economy and Growth Supports Asia Relocation Trends

Malaysia is a relatively open state-oriented and industrialized market economy. The country has a strong economic record, with Gross Domestic Product (GDP) rising on average 6.5% from 1957-2005 on an annual basis. Malaysia’s economy in 2014–2015 was one of the most competitive in Asia, ranking 6th in Asia and 20th in the world.

In 2014, Malaysia’s economy grew 6%, the second highest growth in ASEAN behind the Philippines’ growth of 6.1%. The economy of Malaysia in terms of gross domestic product (GDP) in April 2019 was estimated to be $999.397 billion, the third largest in ASEAN and the 25th largest in the world. Malaysia is projected to achieve high-income country status by 2024.

Overview: Kuala Lumpur Industrial Sector

Most of Kuala Lumpur’s industrial sector consists of facilities that are comparatively small in size. Larger facilities are located outside of the city, due to the high cost of land and buildings. Costs are often significant drivers of Asia relocation trends. Manufacturing constitutes about two thirds of the city’s industrial establishments, with service industries accounting for the other one thirds.

Kuala Lumpur Manufacturing Industries include:

  • Foundries
  • Metal and fabricated metal products
  • Paper and paper products
  • Plastics and plastic manufacturing
  • Printing and publishing

Kuala Lumpur Service Industries include:

  • Motor vehicle repairs
  • Storage facilities
  • Warehouses

City Plans: Become an International Commercial and Financial Center

Kuala Lumpur has a vision to become a world-class city. To do this, the city is focusing on the knowledge economy, and this will affect Asia relocation trends. As a result, Kuala Lumpur is investing in new technologies, examining building and infrastructure requirements, and developing a highly skilled labor force. Training facilities are noted as available in the Technology Park Malaysia, and other educational venues such as the German-Malaysian Institute. Overall, Kuala Lumpur remains highly competitive in terms of costs as compared to nearby cities such as Singapore and Hong Kong. The city has been following the Kuala Lumpur Structure Plan 2020, and the economy has grown significantly, benefiting from Asia relocation trends.

What Does This Mean?

Kuala Lumpur is one of many dynamic and successful cities in Asia competing for investment, jobs, and technology. As these cities compete with each other, many are investing in the necessary infrastructure to attract knowledge economy firms. Also, skills training and education for the local workforce are increasing. Cities are also focusing on design and amenities to attract workers and firms that will help transform their economies.

What Should Employers Do About Asia Relocation Trends?

Employers pursuing global expansion plans should review Asia relocation trends. Several ASEAN countries may have positive economic aspects and desirable locations for a variety of operations, including manufacturing and services. Cities such as Kuala Lumpur are actively pursuing investments within the knowledge economy. Nations in Asia are increasingly becoming viable alternatives to China for corporate expansion.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients understand how to determine a number of optimal locations for global corporate expansion. Our team can help your company understand how to leverage Asia relocation trends to support corporate growth initiatives.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Contact our experts online to learn more about Asia relocation trends, or give us a call at 800.617.1904 or 480.922.0700 today.

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Global Opportunities for Growth with the China Belt and Road Initiative

The China Belt and Road Initiative recently hosted its second forum. Over 5,000 delegates from over 150 countries, including  the leaders of 37 nations, attended the forum held in Beijing in April 2019. The infrastructure project began in 2013 as a way to rebuild several historical trading routes across Europe and Asia that had been lost over the years, previously known as the “Silk Road.” The road was basically a widespread network of routes that connected China to other nations in the Far East, Middle East, and Europe. The Han Dynasty opened trade with the West along these routes in 130 B.C. However, the routes were closed over 600 years ago when the Ottoman Empire boycotted trade with China.

China’s New Silk Road Created by the China Belt and Road Initiative

China’s “New Silk Road” is a signature project for President Xi Jinpeng. The project is officially known as the “One Belt, One Road” (OBOR) initiative. In addition to large infrastructure projects across the region, the hope is that trade along these routes will increase. China is looking for a global resurgence in a push to expand the country’s international influence. Some initiatives preceded the OBOR, such as China’s flagship economic corridor development with Pakistan. China is seeking to become the center of global economic activity, with all of the power and influence this status will bring. Additional benefits of the China Belt and Road Initiative include:

  • Opportunities to absorb China’s current excess industrial capacity
  • Access to new capital for large state firms that already carry a significant amount of debt
  • State banks avert any financial crises arising from large state firm’s non-performing loans
  • Larger State Owned Enterprises gain pathways to develop into internationally competitive firms

International Cooperation for the China Belt and Road Initiative

China has been developing strong international ties with nations critical to the success of its Belt and Road Initiative. China’s success is clearly seen in its interactions with the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NBD) for BRICS nations. In fact, China has long been considered one of the top emerging international markets. With the NDB headquarters in Shanghai, China’s influential role as a financial center among the BRICS nations is a certainty. BRICS nations include:

  • Brazil
  • Russia
  • India
  • China
  • South Africa

Increasing Imports from Nations Participating in the China Belt and Road Initiative

At the April forum, President Xi Jinping chose to address criticism of the China Belt and Road Initiative by publicly supporting several trade-oriented policies and frameworks. Specifically, China will:

  • Focus on the highest quality and sustainability for projects undertaken by the China Belt and Road Initiative
  • Increase its imports from developing countries to spur investment in those nations
  • Reduce existing barriers to trade to further open China’s markets to international imports
  • Implement structural changes to promote foreign investment in China

President Xi Jinping’s message on trade included a focus on implementation of trade and international agreements. While agreements can easily be made, implementation has been challenging without a sustained commitment from China to ensure full follow-through. As a result, such issues can be extremely difficult to understand and resolve, including:

As of the 2nd Forum, the nation has signed over 170 China Belt and Road Initiative agreements with 125 nations. China’s total investments may reach upwards of $1.3 trillion by the year 2027.

What Does the China Belt and Road Initiative Mean for Employers?

Employers in nations where the China Belt and Road Initiative projects are in planning stages may be able to leverage opportunities to participate directly or indirectly in various parts of the initiative. Although China’s focus is for its State Owned Enterprises to benefit from these projects, local firms in the countries will benefit as the projects come to fruition. The benefit may arise through direct investment in project-related activities. Alternatively, it may arise through increased trade resulting from the China Belt and Road Initiative.

What should Employers do?

Employers currently located in countries where China Belt and Road Initiative projects are planned or underway should investigate opportunities where they might be able to participate. They should also review future production plans that might need adjustment for potential increased trade opportunities with China.

Employers should review their talent acquisition and management programs to ensure they remain competitive to attract and retain new hires and transferees. Some countries may face talent shortages, so employers should look into global relocation as a solution to find and hire qualified employees. Relocation Management Companies (RMCs) can provide expert assistance to employers to benchmark their relocation policies and add enhancements that attract talent.

Employers not currently located in countries participating in the China Belt and Road Initiative might consider these countries as a strategic location for future corporate expansion. The services of an International Professional Employer Organization (PEO) may be useful to help an employer enter these countries and quickly test the local market.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients develop relocation programs that attract and retain qualified employees to various destinations. Our team can help your company determine how to attract and retain new hires needed to leverage opportunities arising from the China Belt and Road Initiative.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts. Contact our experts online to discuss your company’s relocation program needs in countries that benefit from the China Belt and Road Initiative, or call us at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

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Global Relocation Global Relocation Tips Global Relocation Trends

What are the Top Emerging International Markets for Global Relocation?

Many companies look to emerging international markets for corporate growth initiatives. Entering a growing market on the upswing provides a number of advantages. Costs for expansion are usually lower in emerging international markets, as the local economy has not reached its full potential. Companies gain significant advantages through:

  1. Lower costs for land, buildings, rent, and equipment
  2. Exposure to foreign investment with high potential
  3. Market diversification enabling growth in new markets to balance stagnation in other markets
  4. Enhancement of the company’s global reputation
  5. Learning new cultural perspectives that may enhance growth initiatives

What are the Top Emerging International Markets?

The four largest emerging international markets are Brazil, Russia, India, and China. These four countries are known by the acronym BRIC. The BRIC nations have several features in common, including a government focus on economic growth, well developed financial markets, and strong interest in international trade initiatives. However, they share some challenging issues, such as currency issues and fluctuations.

Addition of South Africa to BRIC

South Africa joined the BRIC nations and represents the “S” in BRICS. The addition of South Africa is due in part to the other nations’ desire to forge closer ties with Africa’s leading economy. The first five-member BRICS summit was held in 2011. By 2020, BRICS countries expect to contribute nearly half of all global Gross Domestic Product (GDP) growth.

New Development Bank for Emerging International Markets

The New Development Bank (NBD) for BRICS is seen as a success story for this group of large economies. NBD’s general strategy document for the period 2017-2021 calls for the bank to place two-thirds of its loans into sustainable, “green” infrastructure and renewables over the next five years.

Brazil

  • 2nd largest producer of iron ore in the world
  • Large producer of ethanol (more than Europe and Asia combined)
  • Rich natural resources

Russia

  • Leading exporter of oil and natural gas
  • Strong growth in commodities
  • Significant free market reforms driving economic growth

India

  • Leading producer of food and farm goods
  • Known for information technology and business process outsourcing
  • Growing demographic and workforce trends

China

  • Leading exporter of consumer goods
  • Mid-range producer of value-added manufacturing products and assembled goods
  • Government plans to achieve dominance of high-tech sectors to lead emerging international markets

South Africa

  • Diverse economy driven by domestic consumption
  • Abundant natural resources
  • Largest economy in Africa with world-class and progressive legal framework

What are Success Strategies for Emerging International Markets?

In order to achieve success, companies should define a plan for how they will approach entering new markets. Proven success strategies include:

  • Leveraging trade associations, events, and government agencies that can support the endeavor
  • Conducting market research on all aspects of the local culture, businesses, and strategic fit
  • Building a network of strong relationships to help open doors in the new markets
  • Identifying strategic partners that can work with you in the local markets
  • Planning for contingencies and flexibility to respond to local market nuances
  • Commit for the long term so the emerging international markets become integral to your business

What Does This Mean?

Companies looking to enter emerging international markets should follow proven success strategies. As a result, they will gain valuable market information, develop strong relationships, and define a robust and executable market-entry plan. Companies should determine whether one or more of the BRICS nations should be on their target list for market entry.

What Should Employers do About Emerging International Markets?

Companies looking to enter emerging international markets should review their relocation programs. A qualified Relocation Management Company (RMC) with knowledge and experience can provide a number of helpful resources. As a result, companies will maintain a strong competitive advantage in relocation for new hires and transferees. A global relocation program that provides the highest level of relocation benefits and services for employees will help companies attract highly skilled and talented candidates.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients understand how they can use global relocation to enter emerging international markets. Our team can help your company understand how to leverage global relocation to any of the BRICS nations and gain all the advantages these markets offer your company as well as your new hires and transferees.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to discuss your company’s interest in global relocation to emerging international markets, or give us a call at 800.617.1904 or 480.922.0700 today.

Request your complimentary relocation policy review

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United States Economy

Leveraging the Growth of World Economies for Corporate Success

Petronas Towers, also known as Menara Petronas is the tallest buildings in the world from 1998 to 2004.

How can a company grow and achieve corporate success as world economies change? Many companies think the answer is to determine how best they can get their products into these growing markets. While this seems straightforward, international trading laws, customs, and tariffs may drastically alter a company’s chances for success.

Local Market Preferences

Additionally, products should be suited to markets to ensure success. For example, clothing choices that are common in the United States would not necessarily find success in other markets. Another example is water filtration technology, where advanced markets seek to improve water taste and appearance, while emerging markets may seek to increase access to potable water or focus on basic filtration to ensure safe drinking water supplies.

Local tastes and preferences should always be considered to help ensure corporate success. Many successful businesses have struggled and failed to achieve success in their international growth initiatives. Much of this could have been prevented with stronger test marketing programs and in-depth local marketing research.

Alternate Routes to Success

Companies pursuing world economies as part of their corporate growth and success strategy might consider alternate routes to reach these markets. This may provide them with valuable market information to help increase their chances for success. Such information may include geographic area, general types of target customers and their demographics, information about local competitors, and information about government regulations, taxes, and requirements.

Which World Economies are the Fastest Growing?

Looking forward over ten years, the face of the world’s economic leaders will change. By 2030, the leading world economies will reflect the rise of Asia as a dominant economic force.

According to a Standard Chartered report, by 2030 Asian Gross Domestic Product (GDP) will account for approximately 35% of the global GDP. India is seen as the largest driver of this growth in Asia. This is due to the introduction of several reforms including the Indian Bankruptcy Code and a new National Goods and Services Tax (GST). Also, six of the largest world economies will be in Asia:

  1. China (Asia): $64.2 trillion
  2. India (Asia): $46.3 trillion
  3. United States (North America): $31 trillion
  4. Indonesia (Asia): $10.1 trillion
  5. Turkey (Europe/Asia): $9.1 trillion
  6. Brazil (South America): $8.6 trillion
  7. Egypt (Africa/Asia): $8.2 trillion
  8. Russia (Eastern Europe): $7.9 trillion
  9. Japan (Asia): $7.2 trillion
  10. Germany (Western Europe): $6.9 trillion

How can a Company Grow with World Economies?

There are several ways a company can grow with world economies. The traditional route of exporting goods into these markets has its limitations. As a result, examining alternatives is a valuable pursuit.

One way is to consider business expansion with a local operation. This may entail setting up a legal entity such as a Wholly Foreign Owned Enterprise, a foreign subsidiary, or a local distributor. A company might acquire a physical location through sale or lease. Staffing decisions may be made either through relocation, local direct hiring, or a combination of both. All of these activities may take a significant upfront investment in both time and funds.

Another way is to consider the services of an International Professional Employer Organization (PEO), an “Employer of Record” solution. International PEO is a global employment solution where a third-party in a foreign country hires your employees, acting on your behalf. The International PEO becomes an extension of your Human Resources Department. They manage all of the traditional HR functions including:

  • Payroll and Tax Withholdings
  • Remittances to Local Authorities
  • Benefits
  • Health and Social Security-Related Programs
  • Onboarding
  • Health Insurance
  • Pensions
  • Terminations and Separations

International PEO lets a company add full-time team members to their global operations within a matter of days. Companies can easily test new markets for their products without making significant investments in time or funds.

What Does This Mean?

The growth of world economies means that companies may have greater opportunities to find new markets for their goods and services. This also means that companies should examine market data from emerging economies. This information will help them determine if their products and services should be tailored to meet local demand. Companies may consider investing in local market research, conduct test marketing trials, and examine alternate routes to conducting business in world economies.

What Should Employers Interested in World Economies do?

Companies that are looking to leverage the growth of world economies should work with a Relocation Management Company (RMC) that has knowledge and experience in helping companies expand into new markets. Choose an RMC that provides ongoing employee support services, supplier management, relocation benefits, and expense management.

The RMC should also provide access to helpful solutions such as International PEO for companies looking to enter new markets to ensure:

  • Full compliance with local requirements on international employment.
  • The company expends the lowest monetary cost to save funds for use on other corporate objectives.
  • They spend the least amount of time so the company can identify and pursue valuable opportunities.

Conclusion

GMS’ team of global relocation experts has helped thousands of our clients understand how to grow their company’s international employment to leverage the growth of world economies. Our team can also help your company understand how to work with an International PEO. As a result, this will help your company gain all of the benefits this solution provides for international employment.

GMS was the first relocation company to register as a .com. The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Global Mobility Solutions is proud to be named and ranked #1 Overall, and #1 in Quality of Service by HRO Today’s 2019 Baker’s Dozen Customer Satisfaction Survey.

Contact our experts online to discuss your company’s international employment needs, or give us a call at 800.617.1904 or 480.922.0700 today.

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Global Relocation Global Relocation Challenges Global Relocation Tips Global Relocation Trends Visas and International Travel

China Residency Rules May Increase Taxes on Foreign National Employees

Attractive young man standing near the glass fence outdoors with cityscape in the background

China residency rules are changing with the implementation of a new law. The People’s Republic of China Individual Income Tax law has abolished the 5-year tax exemption period during which a foreign national employee does not have to pay income tax on their worldwide earnings. As a result, foreign national employees working in China may face higher taxes on their earnings.

What are the Current China Residency Rules?

Currently, foreign national employees have an exemption for five years before they must pay income tax on their worldwide earnings. Until the five year requirement is met, they only owe income tax on their earnings in China. Also, the current China residency rules require five full years before tax on worldwide earnings takes effect. Foreign national employees with absences are able to avoid the tax requirement if they break residency with one of the following scenarios:

  1. Have an absence of 30 or more days continuously on a single trip during the year.
  2. Have an absence of 90 or more days over multiple trips during the year.

What are the New China Residency Rules?

The new China residency rules eliminate the full year requirement for residency starting January 1, 2019. Instead, foreign national employees who are a resident in a People’s Republic of China-treaty country, and who work in China more than 183 days in a given year, will owe taxes on worldwide earnings. Foreign national employees receive an exemption for China income tax if they do not exceed 183 days residing in China.

Foreign national employees from a non-treaty country have a much shorter China tax exemption of only 90 days. After 90 days, these employees would owe tax to China on their worldwide earnings.

What Should Employers Expect?

Employers in China should expect that the new China residency rules may require employees to pay taxes on their worldwide earnings to China if they exceed 183 days residing in China during a year. Also, there is no mention of any five year period to determine residency, so employees may face immediate tax obligations.

What Should Employers do?

Employers should review their current employment situations in China to determine how the new China residency rules will impact their company and their employees residing in China. They should also provide information to their employees residing in China so the employees can prepare for possible tax obligations accordingly.

Conclusion

Global Mobility Solutions’ team of global relocation experts has helped thousands of our clients with their country-specific employment, visa, and residency requirements. We can help your company understand how to respond effectively to new China residency rules.

Learn how your company can mitigate the impact of China residency rules and resulting tax impacts on employees from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online to discuss your company’s relocation program needs, or give us a call at 800.617.1904 or 480.922.0700 today.

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Labor Force Talent Management Talent Mobility

China’s Labor Force Declines While Economy Transforms

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China’s labor force is in decline. After fifty years of continued expansion, the labor force in China declined last year. Although China still has over 20% of the world’s labor, the decline is indicative of how China’s economy is transforming.

Several other countries with major economies have declining labor forces similar to China’s labor force decline. Countries with declining labor forces include:

  • Italy
  • Japan
  • Russia
  • Spain

Since 2013, many other countries and regions with major economies, as well as several developing countries, have seen their labor forces expand. Countries and regions with expanding labor forces include:

  • European Union
  • India
  • Mexico
  • Turkey
  • United States

Additionally, China is increasingly expanding its level of capital stock. Whereas in 2000 the U.S. capital stock per person was 12 times the level in China, by 2014 the ratio had fallen to 3 times. Recent investment by China has probably pushed the ratio even lower. China is quickly moving on par with the U.S. level of stock per person, even as China’s labor force declines.

What does this mean?

The government in China continues to promote the nation as one that mainly exports lower-value consumer goods and finished products. However, this does not reflect the reality of China’s investment in capital stock. The decline in China’s labor force will further erode the country’s ability to use labor to support its growth as a trading partner of lower-value consumer goods and finished products. The U.S. is currently a trading partner that exports higher-value capital goods and intermediary goods to China. The future for China’s economy will be in this same higher-value market of goods.

What should employers expect?

Employers in China should expect to find it increasingly difficult to recruit and hire as China’s labor force continues to decline. Those with plans to expand into new markets should take this into account as they develop their hiring plans and corporate objectives. Employers should also expect the economy in China to increasingly expand into higher-value capital goods and intermediary goods. There may be significant opportunity in China for companies looking to expand in this market of goods.

What should employers do?

Employers finding difficulties in hiring and recruiting for positions in China should consider highlighting their relocation program’s benefits in their recruiting materials to counteract the effect of China’s labor force decline. The healthcare industry has been facing critical talent shortages for several years. Healthcare employers have responded in several ways, including:

  1. Providing Exceptional Candidate Experiences
  2. Using Data to Enhance Recruiting
  3. Recruiting for Cultural Fit
  4. Creating a Superior Employer Brand
  5. Speeding the Process to Keep Candidates Engaged

Relocation Management Companies (RMCs) are ideal sources for information on global candidate recruitment and relocation. Pre-Decision Services are critical for employers as they provide valuable information about a candidate’s ability to accept a position and be successful. Assessment data can be paired with structured interview questions to better understand the candidate’s interests, goals, and motivations.

Conclusion

GMS’ team of corporate relocation experts has helped thousands of our clients develop relocation programs that attract and retain qualified employees. Our team can help your company by using industry best practices to design your relocation program for the greatest appeal to positions in China. This will increase your company’s ability to attract and retain new employees as China’s labor force declines and its economy transforms.

GMS was the first relocation company to register as a .com. It also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation™ technology platform.

Contact our experts online to discuss your company’s relocation program needs, or give us a call at 800.617.1904 or 480.922.0700 today.

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Categories
Global Relocation Global Relocation Tips Immigration Rules Visas and International Travel

Shanghai China: Changes to Applications for China Working Visas and Working Permits

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The Shanghai Municipal Human Resources and Social Security Bureau has implemented several rule changes to the processes for obtaining China Working Visas and Work Permits. These changes should make the process easier and quicker for applicants.

Who Does This Affect?

  • Companies currently planning to send a transferee to China
  • Companies with transferring employees in the process of submitting applications for working visas and work permits

What are the Documents a Transferring Employee Needs to Have to Enter China?

A Working Visa is required to enter China for working purposes, and is valid for only 30 days. Upon entry, the Working Visa document must be replaced within 30 days by a Resident Permit, which allows foreigners to reside in China. A Resident Permit replaces the Working Visa on the transferring employee’s passport and allows them to remain in China legally, as well as travel abroad without any restrictions during their employment. A Foreigner’s Work Permit is a document that is delivered to the transferring employee after they have contacted and proceeded accordingly with the local Chinese authorities.

What are the Changes to the Process?

In April 2017, two previous types of Work Permits were combined into a single and unique Foreigner’s Work Permit. The Foreigner’s Work Permits are divided into three distinct categories: A, B, and C.

Foreigner’s Work Permit Categories

  • A: High-End Foreign Talents, professionals including scientists, science and technology leading talents, international entrepreneurs, special talents, and other foreign high-end talents urgently needed for economic and social development.
  • B: Foreign Professional Talents, in line with the Foreigners Employed in China Guide Catalog and the corresponding demands of economic and social development.
  • C: Other Foreigners, employed to meet the demand of the domestic labor market in line with the state policies and regulations.

The process changes work in tandem with China’s new Working Permits Points System, which allows applicants to apply online, a simple and quick process. In November 2017, further adjustments were made to the Working Permits Points System, along with a new segmentation of working areas in China.

What Does This Mean?

The new online application system should make the process simpler and easier for applicants to apply for China Working Visas and Work Permits. The Working Permits Points System is easy to understand and helps applicants quickly understand if they fall into one of the three distinct categories.

Conclusion

Global Mobility Solutions’ team of global relocation experts can help HR teams determine the best plan and course of action on how to submit applications for China Working Visas and Work Permits. Global Mobility Solutions can also help you pursue additional options if the Working Permits Points System is not viable for a transferring employee. Contact our experts online or give us a call at 800.617.1904 or 480.922.0700 today.

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Categories
Global Relocation

Setting up a Multi-Currency Account for Transferees at Banks in China

Two women analyzing documents while sitting on a table in office. Woman executives at work in office discussing some paperwork.

U.S. employers with transferees in China should ensure their employees are setting up a multi-currency account at local banks. A multi-currency account is required for quick and easy access to funds in the local currency. Transferees who do not have a multi-currency account face a number of issues including excessive currency conversions, higher fees, and delayed access to funds.

What is the Currency Conversion Issue?

Currently, transferees with ongoing allowances and expense reimbursements are paid with funds sent by our finance team in the local currency, Chinese Yuan Renminbi (CNY). Local banks in China are then converting these funds back into U.S. Dollars (USD) prior to depositing the funds into the transferee’s local account. These local banks in China convert the currency on their own initiative, and our team cannot control or change the local bank’s process. In order for transferees to access these funds for use, they must pay a fee to have USD converted back into CNY. The excessive currency conversions result in higher fees to the transferee, thereby reducing their funds and delaying immediate access.

What does this mean for you?

There are a few solutions that may resolve the currency conversion issue and reduce the excess bank fees. Our global relocation experts recommend that clients discuss the importance of setting up a multi-currency account with their transferees.

The steps to set up a multi-currency account are:

  1. The transferee must set up their account as a multi-currency account at their local bank in China.
  2. The transferee must complete the necessary documentation with their local bank to claim funds in the local currency, CNY.
  3. Once both of these steps have been completed by the transferee at their local bank in China, the transferee must send confirmation to our finance team in order to have the information recorded in their file.

However, even if all of these steps are followed, a few local banks in China may still perform the currency conversion. If this continues to be an issue for the transferee, another solution is to set up local payments with our Asia-Pacific (APAC) regional office.

Conclusion

Global Mobility Solutions’ team of global relocation experts provides guidance and can help HR teams communicate the importance for transferees of setting up a multi-currency account at banks in China. Contact us online or give us a call at 800.617.1904 or 480.922.0700 today.

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About

Contact Us

About Us

GMS Client Login

Privacy Policy

Other Services

Our Technology

Global Relocation

Group Moves

U.S. & Canadian Relocation

Address

Global Mobility Solutions
15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904
Available 24/7/365

About

Contact Us

About Us

GMS Client Login

Privacy Policy

Address

Global Mobility Solutions
15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904
Available 24/7/365

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