Taxes
Marching on with my top ten reasons I may never live in China again....
If I were to have to live in China again, I think it is a sure thing I would need to pay taxes. I would like to simply be "stationed there", while calling America my base, and flying back and forth to China on a business visa. That would be ideal.
But what company is willing to do that? Because I want business class, My Man. Economy sucks and guess what? My company and your company can afford it. When a company makes millions, a $6000 ticket is chump change.
Does it make me a "target"? Sure does. Because economy is only $1000. But very much depending on the point of view of the CEO, why not just hire a local to do my job? I think fifteen years ago that type of attitude began to very much sink in. I was indeed a target. I've said it before and I shall say it again. Being able to speak Chinese and have a strong professional background in China makes one more a target. More so then the frequency with which one drinks champagne on an airplane.
I've had plenty of senior level execs try and silo me, keep me in the closet, outright bury me within the org chart. This type of behavior definitely led me to start my own business. And it very much led me to ensure I knew my stuff. As the only laowai able to speak Mandarin within a company with Chinese operations, the knives were always out. They were always looking at me for a display of a hint of self entitlement. I've had two bosses actually tell me I wasn't needed in China. Of course they couldn't get on a plane fast enough themselves. One ass actually tried to exile me to Poland. Only when the Polish office gave a "WTF is he coming over for" response did he back down.
Both those losers eventually lost their jobs(after me of course).
I guess what I'm trying to say is soft skills are important. Just don't count on your boss to value them, when it gets in the way of his own KTV schedule. The surest way to respect within an organization is knowing your job inside out. Speaking Mandarin, knowing the culture, having work experience over there..."we got local staff for that".
But I'm now finding some of that is changing(fingers crossed).
American companies, wrong or right, now prefer an American filling this job. Chinese bad press wrong or right(of course wrong), make the laowai more attractive. I see myself possibly having an opportunity to return to China to live, in a professional manner. But I don't want to pay taxes either.
Many a smug laowai brag about living in China, until you ask them how those taxes are coming along. As their company deducts the tax they have no earthly clue if they are paying what they are supposed to pay. And guess what? I'm worried as well! This bothers me even more as I realize many of my Chinese friends at the same time have never paid a cent of tax in their life. The Chinese tax system is grossly inefficient when it comes to collecting tax....unless you are a barbarian. I just don't want to be under that microscope. Simple. This in my view is one of the hidden stresses to living in China.
You just never know what you've done wrong until you hear the knock on the door.
If I were to have to live in China again, I think it is a sure thing I would need to pay taxes. I would like to simply be "stationed there", while calling America my base, and flying back and forth to China on a business visa. That would be ideal.
But what company is willing to do that? Because I want business class, My Man. Economy sucks and guess what? My company and your company can afford it. When a company makes millions, a $6000 ticket is chump change.
Does it make me a "target"? Sure does. Because economy is only $1000. But very much depending on the point of view of the CEO, why not just hire a local to do my job? I think fifteen years ago that type of attitude began to very much sink in. I was indeed a target. I've said it before and I shall say it again. Being able to speak Chinese and have a strong professional background in China makes one more a target. More so then the frequency with which one drinks champagne on an airplane.
I've had plenty of senior level execs try and silo me, keep me in the closet, outright bury me within the org chart. This type of behavior definitely led me to start my own business. And it very much led me to ensure I knew my stuff. As the only laowai able to speak Mandarin within a company with Chinese operations, the knives were always out. They were always looking at me for a display of a hint of self entitlement. I've had two bosses actually tell me I wasn't needed in China. Of course they couldn't get on a plane fast enough themselves. One ass actually tried to exile me to Poland. Only when the Polish office gave a "WTF is he coming over for" response did he back down.
Both those losers eventually lost their jobs(after me of course).
I guess what I'm trying to say is soft skills are important. Just don't count on your boss to value them, when it gets in the way of his own KTV schedule. The surest way to respect within an organization is knowing your job inside out. Speaking Mandarin, knowing the culture, having work experience over there..."we got local staff for that".
But I'm now finding some of that is changing(fingers crossed).
American companies, wrong or right, now prefer an American filling this job. Chinese bad press wrong or right(of course wrong), make the laowai more attractive. I see myself possibly having an opportunity to return to China to live, in a professional manner. But I don't want to pay taxes either.
Many a smug laowai brag about living in China, until you ask them how those taxes are coming along. As their company deducts the tax they have no earthly clue if they are paying what they are supposed to pay. And guess what? I'm worried as well! This bothers me even more as I realize many of my Chinese friends at the same time have never paid a cent of tax in their life. The Chinese tax system is grossly inefficient when it comes to collecting tax....unless you are a barbarian. I just don't want to be under that microscope. Simple. This in my view is one of the hidden stresses to living in China.
You just never know what you've done wrong until you hear the knock on the door.
A big wow.... great post.
ReplyDeleteI will bring up several points of yours.
1. Tax:
Last few years China got much stricter on collecting it. The EU companies do not even try to do famous salary split anymore (salary paid partly with RMB in China, partly offshore). Nowadays it is a China contract, with full salary paid in China.
Any deviation from this is an invitation for trouble. And you're right - foreign foreigners are under magnifying glass when it comes to this.
In a nutshell it's a high tax without much to be gained in exchange. As you also mention, the Chinese pay jack's shit for the tax.
2. Not needing the foreigner in China + being siloed by foreign company's HQ:
Been there, done that. 6k USD flight ticket is peanuts indeed, but if you (as a China-based employee) request same treatment as guys who fly in from HQ for a week of pleasure in China, you will provide the HQ guys an ammo to shot you with... i.e. they will make sure that your salary and expenses will get questioned by CFO who works at HQ and there will be discussions on replacing you with an English-speaking Chinese who is cheaper than you.
From perspective of HQ it's a double win: CFO gets to report savings, and the VP who booted you out gets rid of you + gets to hire agreeable Chinese "yes-man" who never reports bad news to the HQ, and can act as a corporate shield when there is any fuck-up on the horizon.
BONUS POINTS for setting up a bribing system between HQ based VP and the China based Chinese GM.
3. Importance of soft-skills:
Here's an idea for a post for you. The importance of the soft-skills of a China-based foreigner when dealing with foreign HQ... By being surrounded by the Chinese, the foreigner in question is put in disadvantage. There is lot of formerly China-based foreigners who had really hard time to switch back to corporate in their home countries. One will not know how to play the right corporate game, how to behave etc.
It's hard to hone such skill while being based in China. Hard to make friends with HQ-based CFO. Simply speaking, if any VP in HQ wants to get rid of China hand - they have a whole swiss-knife multitude of options for choosing to do so. Bury you under KPI's, metrics, soft skills deficiencies, up to the dollar value put on your work by a CFO. One simply cannot win this battle.
The problem is that even if the China-based foreigner knows their job very well, and can speak Chinese - you still are likely to be replaced by a Chinese. No way around it.
4. Recent bad press around China for sure is a plus point for hiring a foreigner instead of Chinese. But is it really?
We all know how systematic the bribery is in organisations run by the Chinese GM in China. It did not stop the HQ to replace you with such person in the first place... why would bad political situation be the trigger to suddenly start replacing Chinese with Foreigners?
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How did you make the transition to doing your own business? Did you have a customer network ready? Did you advertise online?
First of all thank you for the comment and I apologize for my delay getting back to you! There is indeed alot to unpack here.
DeleteLet me do my best:
Tax: I think you are exactly right here. It would be a big problem for me, or anyone else living in China, but particularly for American citizens as they do not effectively pay into their Social Security system. I do not know how it is for other countries. I do know that if an American lives in Hong Kong, one can still indeed pay into the SS. From China, I would expect it to be much more difficult. I do think the best way to get around it is by simply flying there "frequently". But that airfare does indeed add up.
The expense of keeping a foreigner over there does indeed make one an easy target. Every time a new CFO or controller would come on board, the first thing they want to do is "impress" the boss by replacing a seemingly overpriced barbarian with a local. I recommend a contract.
What is ironic is that I've seen on a few occasions expats in very large corporations live in China for close to a decade. Usu an engineer. Almost never a Sourcing Guy like myself. No one ever accuses an engineer of corruption.
Regarding your soft skill comment I think you are exactly right. I was in China so damn long at one point that I really knew nothing about what was really happening. And I when I came home I was quite frankly ignored by the rivals of my boss. Their cliche eventually won the internal power struggle. One really must be involved with the Home Ofc politics. It is very important. Or simply move from small company to small company.
Lastly, regarding your thoughts on being replaceable despite the recent spate of bad news for Chinese within America, I would think it is probably the same in your native country as well. America, more perhaps than any other country, is very willing to displace it's own employees for native employees, and that makes sense, as long as the operation is within a nation governed by strong laws. However, I feel most corporations have simply "shrugged" at the news, unless it is one of their own. But back home I feel it does indeed give me an advantage I haven't had in a long, long time. We shall see. Thank you again for your comments!