The China Megathread III: It is not a happy everyday

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B-Rad: Aug 8, 2006

MeramJert posted:

China actually only has hourly wages, there's almost no legal concept of a salaried worker, and there are very strict overtime laws. As far as I can tell though, this only comes up when foreign companies get sued by former employees for violating these things.

Really? Tell that to my girlfriend who works for a state-owned company and has to put in 11-12 hour days for a pittance even though she is scheduled for 8.

# ? May 7, 2014 01:51

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# ? May 14, 2024 21:11

fart simpson: Jul 2, 2005; DEATH TO AMERICA

B-Rad posted:

Really? Tell that to my girlfriend who works for a state-owned company and has to put in 11-12 hour days for a pittance even though she is scheduled for 8.

Yeah, enforcement of the existing laws isn't really China's strong suit.

# ? May 7, 2014 01:59

Ceciltron: Jan 11, 2007; Text BEEP to 43527 for the dancing robot!; Pillbug

B-Rad posted:

Really? Tell that to my girlfriend who works for a state-owned company and has to put in 11-12 hour days for a pittance even though she is scheduled for 8.

Your girlfriend should lawyer up. Chinese contract law is no joke!

# ? May 7, 2014 02:00

Traveler: Sep 13, 2006

I thought hourly wage was a capitalistic thing in capitalist countries only. And those who are working in Starbucks, KFC, McDonalds etc in China are paid hourly.

# ? May 7, 2014 02:07

Traveler: Sep 13, 2006

B-Rad posted:

Really? Tell that to my girlfriend who works for a state-owned company and has to put in 11-12 hour days for a pittance even though she is scheduled for 8.

Quit that job then.

# ? May 7, 2014 02:09

fart simpson: Jul 2, 2005; DEATH TO AMERICA

Y'all should read china law blog, you'd know all about this stuff. Also reminder that it's illegal for Tibetan Buddhists to reincarnate in China.

# ? May 7, 2014 02:22

fart simpson: Jul 2, 2005; DEATH TO AMERICA

China Law Blog posted:

Here�s China general system:

1. China does not recognize the concept of a salaried employee (without overtime) as is common in the U.S. for management personnel.

2. The only legal method of payment in China is by an hourly wage. If an employee works beyond the 40 hour week, then the employee must be paid overtime. If the employee works beyond the daily 8 hours, the employee must be paid overtime. That is the way the law works and there are no exceptions.

3. This inflexible approach is set up for the conditions of line workers in a large factory. It does not fit with the way that businesses like yours actually operate.

4. The employee manual we provided you accords with the strict requirements of China�s overtime laws.

5. Companies deal with the overtime issue in various ways, depending on the actual conditions of the company. The most common is to have an informal policy for adjustment. That is, if an employee works too much in any day or week, the employee takes time off in subsequent days or weeks to compensate. This approach does not strictly comply with the law, but I am not aware of any company getting objections if the approach is actually followed. However, it is not something that should be memorialized in the employee manual and there are no guarantees that you will not be facing an overtime action at some point down the road for this.

6. For management personnel, the situation is more complex. It simply makes no sense to expect that management personnel will be paid on an hourly basis in the same way as production workers. Most Chinese companies therefore expect their management personnel to work on the same basis as U.S. style salaried workers. Even though this is common, it still exposes the company for a claim for overtime if there is a later dispute. Again, this is not something that should be included in the employee manual. It should instead be worked out with the manager on a case by case basis.

7. The really difficult issue is with sales staff who travel extensively and maintain irregular work hours. It is best to have a policy where their work hours are adjusted depending on how much time they have spent working in any given week. This is often difficult to do. A number of Chinese companies make no attempt to pay overtime or make any adjustment for this type of worker. As a result of this, these companies are exposing themselves to claims for back overtime in the event of a dispute. Here, the risk is quite real. I have seen a number of cases where this type of worker makes an overtime claim in situations where there is a dispute. Since the employment situation is getting more difficult in China, disputes are becoming more common. You therefore need to take particular care on these issues.

http://www.chinalawblog.com/2012/02/overtime_pay_in_china_what_ya_gonna_do.html

# ? May 7, 2014 02:51

ants on my cum rag: Sep 2, 2011; "Oh God you got the spray gun, DO NOT LOSE IT, you seriously better not screw this up, I'm not kidding"
~~The Battle Hymn of the Contra Tiger Mother~~

quote:

Here�s China general system:

1. China does not recognize the concept of an employee, rather it's built around slave labour

2. The only legal method of payment in China is by hongbao

3. This will be paid as late as possible by an accountant who spends his days flicking snot off his finger and onto the nearby spinning fan.

4. The employee manual we provided you is a right laugh.

5. Companies deal with the overtime issue in various ways, depending on the actual conditions of the company. The most common is to not pay you at all.

6. For management personnel, the situation is more complex. It simply makes no sense.

7. The really difficult issue is with sales staff who travel extensively and maintain irregular work hours. It's best to wrap it in red tape and forget about it.

Fixed that for you.

# ? May 7, 2014 03:15

The Great Autismo!: Mar 3, 2007; by Fluffdaddy

This is why you are an all-star poster.

# ? May 7, 2014 03:18

fart simpson: Jul 2, 2005; DEATH TO AMERICA

The Worst Muslim posted:

Fixed that for you.

Hmm, yes.

# ? May 7, 2014 03:22

angel opportunity: Sep 7, 2004; Total Eclipse of the Heart

Ceciltron posted:

Your girlfriend should lawyer up. Chinese contract law is no joke!

# ? May 7, 2014 05:17

blinkyzero: Oct 15, 2012

kwantingus posted:

I thought hourly wage was a capitalistic thing in capitalist countries only. And those who are working in Starbucks, KFC, McDonalds etc in China are paid hourly.

China is proof that you can disregard hourly wages commonly and still be capitalist as hell.

# ? May 7, 2014 09:25

bad day: Mar 26, 2012; by VideoGames

I'm kind of in disbelief about the hourly wage, I've lived here 5 years and never met a single person who only works 8 hours a day, or gets overtime pay. Most people work 6 days a week, even.

# ? May 7, 2014 14:07

Jimmy Little Balls: Aug 23, 2009

My girlfriend will go to work for 2 hours at most to practice dancing maybe 3 or 4 days out of a month and she gets 3000RMB, I want her job.

# ? May 7, 2014 14:43

SB35: Jul 6, 2007; Move along folks, nothing to see here.

Jimmy Little Balls posted:

My girlfriend will go to work for 2 hours at most to practice dancing maybe 3 or 4 days out of a month and she gets 3000RMB, I want her job.

Is she a ~~stripper~~ exotic dancer? Club girl?

# ? May 7, 2014 14:54

Jimmy Little Balls: Aug 23, 2009

I don't speak much Chinese and she doesn't speak much English so I'm not sure exactly what she does and even my friends who speak fluent Chinese aren't really sure, she works for a make up company and the closest guess is some sort of events coordinator who also models and dances sometimes.

# ? May 7, 2014 15:04

angel opportunity: Sep 7, 2004; Total Eclipse of the Heart

quote:

I don't speak much Chinese and she doesn't speak much English so I'm not sure exactly what she does

wtf

# ? May 7, 2014 15:09

fart simpson: Jul 2, 2005; DEATH TO AMERICA

bad day posted:

I'm kind of in disbelief about the hourly wage, I've lived here 5 years and never met a single person who only works 8 hours a day, or gets overtime pay. Most people work 6 days a week, even.

There might be different enforcement for foreign and domestic companies. I can't find the post right now, but one of the China Law Blog posts mentioned he'd seen tons of cases in recent years where former employees sued their American companies for not paying overtime, and the companies either lost or settled out of court over 99% of the time. This is from a different but related post:

China Law Blog posted:

Our experience says that if a Chinese ex-employee ends up pursuing legal (or governmental) remedies against its American employer, the American employer is going to lose virtually every time. Arguments like the following have virtually no chance of prevailing:
1. This person was an independent contractor, not an employee.
2. This person was a terrible employee.
3. This person and my company had an agreement that the position would be for only two months.
4. We specifically told this person never to work overtime.
5. This person�s high salary was based on our agreement that he/she would not get paid for overtime.
6. This person�s high salary was based on our agreement that we would not make pension payments.
My sense (and it is just a sense because we have not heard about or been involved in enough cases to be able to base anything on empirical data) is that because the US employer will lose just about every time, the best strategy is nearly always to negotiate an agreement with your soon to be ex-employees if at all possible. The fact that this article seems to conclude that this is what the large multinationals have been doing lends further credence to this.

Also, this blog is pretty entertaining for reading how stupid American businessmen can be:

China Law Blog posted:

A U.S. company forms its Wholly Foreign Owned Enterprise (a WFOE) in China and builds a really nice factory there. Then, with a couple weeks to go before its factory is set to begin operations, it learns that China is not going to let them import the key chemical needed for their product. This company had spent nearly a year and nearly a million dollars getting the United States environmental protection agency to approve this particular chemical in its product and they just assumed that because this chemical had been deemed safe in the United States, it could use it in China without having to prove a thing to anyone there. It had never even occurred to this company that China has its own environmental regulations and its own Environmental Protection Agency and that China would require this chemical to go through China testing and would not just accept U.S. EPA testing standing alone. Does anyone think this US company would have thought it could import a chemical into the United States simply because the chemical was on an approved list in China?

# ? May 7, 2014 15:10

Arglebargle III: Feb 21, 2006

Jimmy Little Balls posted:

I don't speak much Chinese and she doesn't speak much English so I'm not sure exactly what she does and even my friends who speak fluent Chinese aren't really sure, she works for a make up company and the closest guess is some sort of events coordinator who also models and dances sometimes.

Cool bro sounds uncomplicated.

# ? May 7, 2014 15:13

angel opportunity: Sep 7, 2004; Total Eclipse of the Heart

ChinaLawBlog posted:

A U.S. company forms a sweatshop in China and builds a really oppressive factory there. Then, with a couple weeks to go before its factory is set to begin operations, it learns that China needs a bribe in order to import the key chemical needed for their product. This company had spent nearly a year and nearly a million dollars lobbying the environmental protection agency to let this potentially harmful chemical in its product and they just assumed that because they had bribed the necessary parties in the US, that they wouldn't have to bribe anyone in China. It had never even occurred to this company that China requires kickbacks for foreign companies to exploit its cheap labor.

# ? May 7, 2014 15:15

Jimmy Little Balls: Aug 23, 2009

systran posted:

wtf

We know enough of each others languages to have basic conversations, just need to look up words occasionally. Can't really have conversations that are too in depth but we have lots of friends who are pretty much fluent in both languages who can help out if we ever have any problems. Being with her forces me to use Chinese so I'm improving much faster than I was before, and her English is getting better too.

# ? May 7, 2014 15:17

Traveler: Sep 13, 2006

Jimmy Little Balls posted:

We know enough of each others languages to have basic conversations, just need to look up words occasionally. Can't really have conversations that are too in depth but we have lots of friends who are pretty much fluent in both languages who can help out if we ever have any problems. Being with her forces me to use Chinese so I'm improving much faster than I was before, and her English is getting better too.

Nice language exchange

# ? May 7, 2014 15:32

ants on my cum rag: Sep 2, 2011; "Oh God you got the spray gun, DO NOT LOSE IT, you seriously better not screw this up, I'm not kidding"
~~The Battle Hymn of the Contra Tiger Mother~~

"Yes, Me and Ping Pong here love each other very much"
"什么意思� What does that mean?
�It's all about love and understanding each other"
"你是谁？� Who are you?
"Look, when two people go into a relationship it's important to establish communication, and I think we make do"
"求你给我回家� Please let me go home

# ? May 7, 2014 15:45

angel opportunity: Sep 7, 2004; Total Eclipse of the Heart

Oh yeah, that's cool. But are you sure that she thinks that you are just having fun for a year? Let me tell you something about Chinese women...

# ? May 7, 2014 15:51

blinkyzero: Oct 15, 2012

systran nailed it about the business, which was stupid for thinking it wouldn't have to bribe its way past a pay-to-play government.

Jimmy Little Balls posted:

We know enough of each others languages to have basic conversations, just need to look up words occasionally. Can't really have conversations that are too in depth but we have lots of friends who are pretty much fluent in both languages who can help out if we ever have any problems. Being with her forces me to use Chinese so I'm improving much faster than I was before, and her English is getting better too.

fearcotton and I have talked about this quite a lot before. Neither of us can fathom dating someone, let alone marrying someone, when there isn't a common language both parties are fluent in. Not knocking it, we just don't really understand how that works. Being able to discuss anything and everything without any difficulties is pretty much the most important part of our own marriage.

blinkyzero fucked around with this message at 15:57 on May 7, 2014

# ? May 7, 2014 15:54

Arglebargle III: Feb 21, 2006

All businesses are stupid for thinking they won't pay for their class traitorism.

# ? May 7, 2014 15:56

blinkyzero: Oct 15, 2012

Arglebargle III posted:

All businesses are stupid for thinking they won't pay for their class traitorism.

Oh look, another red. :argh:

# ? May 7, 2014 15:59

SB35: Jul 6, 2007; Move along folks, nothing to see here.

MeramJert posted:

There might be different enforcement for foreign and domestic companies. I can't find the post right now, but one of the China Law Blog posts mentioned he'd seen tons of cases in recent years where former employees sued their American companies for not paying overtime, and the companies either lost or settled out of court over 99% of the time. This is from a different but related post:

Also, this blog is pretty entertaining for reading how stupid American businessmen can be:

Man, I love China Law Blog it's right up there with the now slightly less useful Sinocism newsletter. Some of the best China content around.

# ? May 7, 2014 16:59

caberham: Mar 18, 2009; by Smythe; Grimey Drawer

systran posted:

Oh yeah, that's cool. But are you sure that she thinks that you are just having fun for a year? Let me tell you something about Chinese women...

I think income and age are always big factors. If she's having a budding career and moving up while you are hovering around the same contract year after year - yeah she's probably going to be the one calling the shots. Then there's also the difference in socio-economic class. Now non Chinese are in a weird position but sooner or later everyone gets sized up and will see how well people will mesh with each other.

But yeah, but you should rather be the party pooping unsuave guy bringing up "the talk" than running along ambiguities. Don't be that rear end in a top hat leading the other person on for short term gratification.

# ? May 7, 2014 19:24

NaanViolence: Mar 1, 2010; by Nyc_Tattoo

caberham posted:

But yeah, but you should rather be the party pooping unsuave guy bringing up "the talk" than running along ambiguities. Don't be that rear end in a top hat leading the other person on for short term gratification.

Caberham is correct. On the other hand, if you aren't willing to be that rear end in a top hat, someone else certainly will be. That's one of the saddest things I realized while living in China.

# ? May 7, 2014 19:52

blinkyzero: Oct 15, 2012

MeramJert posted:

Y'all should read china law blog, you'd know all about this stuff. Also reminder that it's illegal for Tibetan Buddhists to reincarnate in China.

China law blog is best blog: http://www.chinalawblog.com/2014/04/four-common-china-law-mistakes-to-avoid.html

quote:

3. Lawyers often call us for �tips� on handling an arbitration in China (usually with CIETAC). We always quickly ask whether the contract calls for the arbitration to be in English or whether the lawyer calling us (or some other lawyer) on the case is fluent in Chinese. This virtually always elicits a really long silence and then they say something about how they had just assumed that their case (usually set for hearing in a month or two) would be in English.

If you do not specify that your China arbitration is going to be in a language other than Chinese, it will be in Chinese. This mistake stems from the American lawyer�s inability to grasp that China is not all that different from the rest of the world. I mean, would anyone ever think that an arbitration in Kansas City is going to be in Chinese even though the contract calling for arbitration there is silent on the language of the arbitration?

My cousin's firm in Shanghai used to rent him out to U.S. firms trying to handle litigation in China because even a lot of big NYC and Boston organizations have absolutely no one who can speak Chinese, let alone understand even the beginnings of Chinese law. This was still true as of a couple years ago when he moved home to the States with his wife to raise their daughter (and he still works for the Shanghai firm via teleconferencing because the demand is still that large).

He had a choice in the late 80s between going to Japan with his J.D. and taking that path or going to China. Everyone was telling him to go to Japan. Considering the time, not surprising, but going against the grain has served him really, really well.

# ? May 7, 2014 21:21

Baddog: May 12, 2001

Jimmy Little Balls posted:

My girlfriend will go to work for 2 hours at most to practice dancing maybe 3 or 4 days out of a month and she gets 3000RMB, I want her job.

Jimmy Little Balls posted:

I don't speak much Chinese and she doesn't speak much English so I'm not sure exactly what she does and even my friends who speak fluent Chinese aren't really sure, she works for a make up company and the closest guess is some sort of events coordinator who also models and dances sometimes.

Come on man. 2 hours, 3 or 4 days a month. She's someones mistress. Maybe the 3rd or fourth one if shes only getting 'called in' 3 times a month to 'plan events'.

# ? May 8, 2014 02:40

Arglebargle III: Feb 21, 2006

One thing that I've gotten out of the last 10 years is that whatever middle aged adults tell you to do when you're 18, you probably should not do that.

# ? May 8, 2014 02:52

Ailumao: Nov 4, 2004

tbh I know a few models in Chengdu and they really do model and only work that much. They post things on wechat like "im bored" with a pic of their legs or a Starbucks coffee and get about 90000 replies of 好看

# ? May 8, 2014 02:55

Tom Smykowski: Jan 27, 2005; What the hell is wrong with you people?

You got classy friends if they only say 好看

# ? May 8, 2014 04:03

vanity slug: Jul 20, 2010

Magna Kaser posted:

tbh I know a few models in Chengdu and they really do model and only work that much. They post things on wechat like "im bored" with a pic of their legs or a Starbucks coffee and get about 90000 replies of 好看

nice bragpost

# ? May 8, 2014 08:31

Arglebargle III: Feb 21, 2006

Guestbob posted:

nice broguepost

WSJ posted:

quote:

BEIJING�With credit tight in China, companies in industries beset by overcapacity are turning to an unconventional source for cash�other companies�in a new rising risk for the country�s financial system.

These company-to-company loans, known as entrusted lending, have emerged as the fastest-growing part of China�s shadow-banking system, which provides credit outside of formal banking channels. Net outstanding entrusted loans increased by 715.3 billion yuan ($115.4 billion) in the first three months of 2014 from a year earlier, according to the most recent data from China�s central bank.

The increase in entrusted loans last year was equivalent to nearly 30% of local-currency loans issued by banks�almost double the portion in 2012. The jump is all the more pronounced since China�s total social financing, a broad measure of overall new credit, shrank 561.2 billion yuan over the same period, largely because other forms of shadow credit declined as Beijing sought to rein in runaway debt growth.

The growing popularity of such company-to-company lending offers a fresh�and to regulators, troubling�look at the rapid buildup of debt in China. In its latest report on the country�s financial stability, issued Tuesday, the central bank singled out entrusted lending as a problem, saying it is being used by banks to evade regulatory restrictions on lending. Banks, while generally not risking their own capital directly, act as middlemen in these transactions.

China�s debt levels have climbed in recent years at a pace similar to increases in the U.S., euro zone and South Korea before those economies fell into their most recent recessions. The concern among some economists and analysts is that debt will continue to balloon in China, exposing the country to greater financial risks as its economy slows down.

Officials at the People�s Bank of China, the central bank, have warned that much of the intercompany lending is flowing to sectors where the regulators have urged banks to reduce lending: the property market, infrastructure and other areas burdened by excess capacity. In central Shanxi province, 56% of entrusted loans in the past few years have gone to power producers, coking companies and steelmakers, among others, according to a recent paper byYan Jingwen, an economist at the PBOC.

Access to entrusted loans allows struggling companies to hang on longer than they otherwise could, delaying the consolidation that the government and some economists say is needed in a swath of industries.

Big publicly traded companies with access to credit�such as the shipbuilder Sainty Marine Corp., China Shipbuilder and specialty-chemicals producer Zhejiang Longsheng Group �are among the most active providers of entrusted loans. These companies, instead of investing in their core businesses, lend funds at hand to cash-strapped businesses at several times the official interest rate.

Companies provide funds to make the entrusted loans. To get around an official ban on direct lending to other companies, they need to use an intermediary�typically a bank�to lend the money out.

Banks, which in theory shouldn�t use any of their own funds in the process, make money by charging fees to both the lending company and the borrower, and they don�t have to record the loans on their balance sheets. However, in practice, some banks have disguised loans made with their own capital as entrusted loans, thereby helping them skirt regulatory limits on lending, according to officials at China�s central bank. That has helped banks hide �credit risks,� the PBOC said in the Tuesday report��

Ohhhh poo poo.

Shamelessly stolen from the other china thread. No, the other other one. In D&D. But not the one you're thinking of, the other one in D&D.

Arglebargle III fucked around with this message at 09:49 on May 8, 2014

# ? May 8, 2014 09:15

TheBalor: Jun 18, 2001

That's not good. That could spread any eventual shock in housing across the economy even more quickly, since good companies would be dragged down by collapsing businesses that owed them money.

edit: Hahah, holy poo poo. The interest rate right now is 6 percent, and these companies are taking out entrusted loans at several times that. So, what, 12-32%?

Gold standard! Safe as houses!

TheBalor fucked around with this message at 11:29 on May 8, 2014

# ? May 8, 2014 11:18

Arglebargle III: Feb 21, 2006

Yup and the size of those numbers is worrying. $115 billion increase in the last three months, although it's unclear from the wording what exactly they're measuring that against. $115 billion is a lot of money; I wonder how much the shadow banking sector is estimated to be in total... so I went and found it. $5.8 trillion, which is not great but actually not what you'd expect if China was on the brink of following the US's complete financial meltdown act. A $115 billion in increase in the first three months of 2014 would be a 2% increase, but the terms aren't worded clearly enough to be sure whether it's a 2% annual increase or a 2% increase in real terms. I'm leaning towards 2% only in the first three months judging by the fact that it grew 50% last year. :stare:

businessweek posted:

Just how big is China�s shadow banking sector? According to JPMorgan Chase (JPM) it is as large as 36 trillion yuan ($5.86 trillion). That�s equivalent to 69 percent of China�s gross domestic product and almost double what it was two years earlier. �It is the rapid growth in shadow banking (instead of its size) that could generate systemic risk,� JPMorgan�s Chief China Economist, Haibin Zhu, wrote in a May 3 economic research note.

Zhu points out that there is no clear definition of what makes up shadow banking. That means estimates for the size of China�s sector have ranged from as low as 2 trillion to 3 trillion yuan (as in a report last November by the Financial Stability Board, the body set up by the world�s top economies after the global financial crisis) to 30 trillion yuan. �There has been considerable discussion on the rapid growth of the shadow banking system in China, and as a consequence, the buildup of risks in China�s financial sector,� writes Zhu. �Nevertheless, the term �shadow banking� is at best vaguely defined in China.�

For his �broad definition� of shadow banking, Zhu does a good job of breaking down its constituent parts. The largest portions come from trust companies that �invest client funds according to a pre-specified objective, purpose, amount, maturity, and interest rate,� and wealth management products, that �emerged in China as a way to bypass regulation on maximum deposit rates, and are typically short term (less than six months),� writes Zhu. Those together make up about 28 percent of gross domestic product. The remainder comes from sources that include securities firms, finance companies, pawnshops, and underground lending (�informal lending activity in which individuals lend directly to each other,� which amounts to 4.8 percent of GDP), writes Zhu.

$5.8 trillion is not an encouraging number but it's actually not comparable to the US shadow banking sector which hit an astonishing $20 trillion in 2008, which was significantly larger than the actual banking sector. The Chinese banking sector is something like $16 trillion so the ratio is a lot better. But who knows how big shadow banking in China really is, with Li Keqiang on the record saying that China's economic numbers are all lies and JP Morgan not being exactly the most honest or most farsighted people? I think the size of the US shadow banking sector wasn't really identified until after 2008 because people weren't calling financial derivatives a form of shadow banking which in retrospect it was.

Arglebargle III fucked around with this message at 12:13 on May 8, 2014

# ? May 8, 2014 12:07

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# ? May 14, 2024 21:11

TheBalor: Jun 18, 2001

I think the difference is that China's shadow banking industry is mainly just China. The US's shadow banking sector is probably hiding some nasty poo poo for the entire world.

# ? May 8, 2014 14:42

The Something Awful Forums > Discussion > Ask/Tell > Tourism & Travel > The China Megathread III: It is not a happy everyday

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