Beijing Municipality, Improving and Strengthening the Administration of the Allocation and Utilization of Funds Connected to the Rights and Interests of the Staff and Workers of the Chinese Party by Foreign Investment Enterprises Circular

Issued: November 20 2000

Main contents: The Circular aims to replace the standards set out in a 1986 regulation by which foreign investment enterprises (FIEs) contribute to the medical, pension and other welfare funds of their Chinese staff and workers with new standards provided for in later regulations (Section One). These later regulations provide specific requirements regarding employer contributions to the premiums and funds for old age insurance, supplemental old age insurance, medical insurance for serious illnesses, unemployment insurance, and work-related injury insurance (Section Two). For instance, while the 1986 regulation requires contribution to the Chinese staff and workers¡¦ medical funds at 7.5% of total payroll, FIEs now need only allocate an amount at 2.5% of the average monthly payroll as medical insurance premiums for serious illnesses (Item Two, Section Two). In respect of the welfare funds, education funds and housing reserve funds of the Chinese staff and workers, the Circular requires FIEs to make timely and full contributions in accordance with the existing legislation (Section Three). Regarding the management of such funds, the Circular requires FIEs to set up supporting accounts to give full reflection of the sources and uses of the funds (Section Five). The allocation, use and balance of various funds connected to the rights and interest of Chinese staff and workers will be subject to external audit (Section Six).
Related legislation: Ministry of Finance, Improving and Strengthening the Administration of the Allocation and Utilization of Funds Connected to the Rights and Interests of the Staff and Workers of the Chinese Party by Foreign Investment Enterprises Circular, 1999; Beijing Municipality, Implementation of the«Labour Administration of Sino-foreign Equity Joint Ventures Provisions» Supplementary Provisions, 1986; Beijing Municipality, Old Age Pension Insurance of Urban Workers of Enterprises Provisions, Apr 6 1998, CLP 1998 No.8 p13; Beijing Municipality, Social Pooling of Medical Expenses for Serious Illnesses for Local Urban Enterprise Staff and Workers Provisions, 1995; Beijing Municipality, Unemployment Insurance Provisions, Sep 14 1999, CLP 1999 No.9 p11; Beijing Municipality, Premiums of Work-related Injury Insurance for Enterprise Workers Provisions, 1999; Beijing Municipality, Transmission of the «Ministry of Finance, Several Financial Issues Relating to the Reform of the Housing System for Chinese Staff and Workers of Foreign Investment Enterprises», 1995; Beijing Municipality, Questions Relevant to the Establishment of Housing Reserve System Provisions, 1995; Beijing Municipality, Establishment of Staff and Workers Housing Reserve Funds in Beijing's Foreign Investment Enterprises Provisions, 1993; Administration of Wage Income in Foreign Investment Enterprises Tentative Procedures, Feb 14 1997, CLP 1997 No.9 p30; Beijing Municipality, Transmission of the«Ministry of Finance, Financial and Accounting Administration of Foreign Investment Enterprises During Liquidation Relevant Provisions» Circular, 1995.