MBA China

China Immigration Policy Changes Could Damage MBA Job Prospects

New amendments to China's immigration policies could halt MBA career opportunities in China. Government legislation now affects the country's right of entry for students, interns and professionals.

Image credit: Yee Yiu

Image credit: Yee Yiu

This is a post by Jaime Rodríguez Santiago, a new member of the BusinessBecause team.

The amount of internationals hoping to stay in China over a long period of time has become one of the main issues of debate and legislation for the Chinese government. Experts on the field assure that China’s immigration policy was never designed to handle the large number of immigrants entering the country. 

The number of non-Chinese passing through airports, sea ports and land crossings has been increasing 10 per cent annually since 2000, according to official data. The 2010 national census records almost 600,000 foreign nationals residing in the mainland. On Thursday, BusinessBecause reported that China's top business schools were recruiting more international MBA students than ever before. Many MBAs are drawn to the better job prospects on offer in one of the world's top economies.

But new law and visa regulations that came into effect on July 1 and September 1 respectively are “the first new border control policies since 1986”, reflecting a scrutiny process prompted by the increase in immigrants. 

According to Stacy Kwok, a partner at the Shanghai office of consultancy PricewaterhouseCoopers, “China is starting to look like other developed countries” in terms of trying to normalize immigration procedures. But there’s a certain degree of uncertainty due to long history of complex relationships that China has had with internationals. 

“Immigration is treated as a sensitive issue related to foreign affairs,” said Gary Chodorow, chief specialist in immigration law at Frederick H. Wong’s Beijing Office. “Historically, the vast majority of the Chinese visa rules have not been published, and the government has not gone out of its way to make public these rules.”

The lack of informative transparency has created several problems for employees and employers alike. Companies inexperienced in recruiting non-Chinese are “put off” by the paperwork required to make their foreign hires legal, and many decide to take “shortcuts”. Uninformed employees agree to roles such as internships and part-time language teaching without fully understanding their legal status. 

“Normally the school has copies of the foreign teachers’ credentials on display, to show the [students’] parents that we’re genuine,” said Stephen (alias), a part-time expat English teacher in Shanghai, in an interview with China Economic Review .“But when I came in two weeks ago, all those papers had been taken down... it turns out the police had visited the school earlier that day and the school had to hide everything.”

Others are not capable of avoiding the authorities. According to Stephen, a fellow language professional at a different institution was recently deported for being in the country on the wrong visa. 

With the intention of providing clearer guidelines, the Chinese government implemented new visa regulations that came into effect on September 1. Under the new system, the number of ordinary visa classifications has expanded from eight to twelve in a effort to allow for a more focused categorization of immigrants. According to CER, some are “practical” distinctions.

For example, under the former visa system the F visa was applicable to foreign citizens who come to China for commercial and non-commercial purposes, including: “Business activities, scientific and culture exchanges, short-term study and internships". With the new regulations, the F visa will only be issued to foreign visitors coming to China for “non-commercial purposes”, such as cultural exchanges and inspections. Meanwhile, a separate M visa will be added and will be issued to foreigners coming for business and trade purposes.

However, some terms such as “illegal employment” - defined as “working without authorization of beyond a permitted scope” - have always been the subject of intuitive understanding. 

Some commentators say that the new processes impact legitimately foreign employment in China, as claimed by Harry Spencer, a British restaurateur with operations in Shanghai. Complications arising from going through paperwork resulted in his Scottish head chef’s arrival in China to be delayed by several weeks. 

Despite the ambiguity in some concepts, violations won’t go unpunished. Foreigners found to be working without the correct papers face fines of between US$816 and $3,265. Additionally, he or she can also be detained for five to 15 days, and can be deported in “serious” cases. In the case of employers (including foreign-invested companies),  law establishes that all income earned from “illegal employment” will be impounded, in addition to fines ranging from US$ 1,630 to $16,300. 

Regulations have also divided the current X student visa into the X-1 visa and X-2 visa. The X-1 visa applys to “foreigners coming to China for a long-term study period" (greater than 180 days), while the X-2 applies to “foreigners coming to China for a short-term study period” (less than or equal to 180 days). 

In the case of internships, new conditions indicate that foreigners who come for a period of up to six months, to complete an internship, must enter on a special business (F) visa for interns. However, the procedures for obtaining such an internship visa are relatively complicated, and one strict condition is that “the intern cannot receive any kind of payment”; even indirect allowances or reimbursement of expenses may be identified as remuneration by the Public Security Bureau (PSB, China’s police), and therefore become subject to administrative punishment.

According to Roos, Tabbers & Ye, the new internship regulations “conflicts” with some bilateral treaties that China has signed with several developed countries which provide income tax benefit to qualified interns, but the position generally held by the PSB is that “such intern-salary-friendly treaty clauses have not been locally legalized in China”, and therefore interns should not be paid. 

In spite of the new immigration policies, Chinese government officials are “keen” to welcome global talents. The new R visa category aims to attracting senior-level foreign professionals, whose skills are “urgently needed” in China. Still, terms like “specialized talents” lack of a solid definition. This deficiency makes allowances for subjective interpretations. 

References:

China Releases Final Draft of New Visa and Residence Permit Regulations for Foreigners. (2013, July 25). China Briefing. 

Roos, M., Tabbers, R., & Ye Z. (2013, August 6). Companies Targeted for Illegally Hiring Foreign Interns. Retrieved September 7, 2013, from http://www.rplawyers.com/1289

New visa law prods door open for foreigners. (2013, August 26). China Economic Review. 

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Jaime Rodríguez Santiago
Author:
Jaime Rodríguez Santiago
Published:
Monday 9th September 2013 17:16:00 GMT

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