What Has Changed With China’s Dividend Tax?

So, in China, it has been the case that since 1994, foreigners who owned shares in a foreign-invested enterprise or joint venture paid no Chinese income tax on their dividends. Chinese individual shareholders in the same company, by contrast, would have paid 20%.

That ended on Sept. 1, 2026, under Announcement 27, issued by the Ministry of Finance and the State Taxation Administration.

The change was very simple. It basically said that dividends paid by a foreign-invested enterprise to any foreign individual are now taxed at 20%, the same as everybody else.

There were a few caveats to the announcement that are worth noting here.

• The first is that the company collects the tax. So it withholds 20% and pays it to the tax bureau by the 15th of the following month. If it doesn’t, the person who received the dividend must declare and pay the tax themselves by June 30 of the following year.

• Second, only individuals are affected. Dividends paid to a foreign company are still taxed at 10% or less, depending on the tax treaty China has with the country in which the company is based. That hasn’t changed.

• And finally, it wasn’t just foreigners who were affected. Residents of Hong Kong, Macao and Taiwan also lost their exemption.

Why Now?

So why now? Well, China has basically given two reasons.

The first is fairness. The argument is essentially this: why should Chinese and foreign shareholders in the same company pay different amounts of tax on the same dividend? Li Xuhong, vice president of the Beijing National Accounting Institute, told CCTV that this was “clearly not fair.”

The second, and potentially more consequential from Beijing’s point of view, is that, according to CCTV, some Chinese companies had been converting into foreign-invested enterprises and then paying out large dividends tax-free. Ge Yuyu of the Shanghai National Accounting Institute told Yicai that some individuals had even dodged the tax by changing nationality.

Although the announcement came as a shock to many in the business community, the change had been on the cards for a long time. The State Council first said it would scrap the exemption back in 2013, as part of a plan to reform income distribution.

 Who the Dividend Tax Applies To

How much you’re likely to be affected by this depends on if you’re a foreign resident in China, or not.

If You’re a Non-China Resident

Most countries tax their residents on dividends they receive from abroad, but they also usually give them a credit for tax they’ve already paid overseas. China has tax treaties with more than 100 countries, and most of these limit how much China can tax a foreign individual’s dividends, often to 10%.

Put those two things together, and the money mostly just moves from one tax office to another.

Take the U.K. as an example. Say you live in the U.K., pay the basic rate of tax and own your Chinese business personally. You take a dividend of 100,000 Chinese yuan.

Before Sept. 1, China took nothing, while HMRC took 10.75%. That’s a total tax bill of 10,750 yuan.

Now, under the U.K.-China tax treaty, China can tax dividends paid to U.K.-resident individuals at 10%. If you claim that rate, China takes 10,000 yuan. HMRC still charges 10.75%, but gives you a credit for the 10% you’ve already paid in China. So you only owe another 0.75% in the UK.

The total is still 10,750 yuan. Nothing has changed.

If You Live Somewhere That Doesn’t Tax Dividends

Unfortunately, if you live somewhere like Hong Kong, Singapore or the UAE, where personal dividend income isn’t taxed, things have changed. China now takes 20%, and there’s no tax bill back home to offset it against. So whatever China takes from your dividend is gone. In effect, you’re paying the full 20% rate.

If You Live in China

Now, if you’re a foreigner who lives in China and owns a business there, you’re not going to be so lucky. The same tax treaty that protects our hypothetical U.K. resident won’t help you. Tax treaties generally protect residents of the other country, and if you’re resident in China, then you’re paying tax in China.

Most countries stop taxing you once you’ve moved abroad, so there’s no tax bill back home to offset the Chinese tax against. Before, you kept the whole dividend. Now, you only keep 80%.

The big exception is Americans. The U.S. taxes its citizens wherever they live, so U.S. citizens living in China may be able to offset the Chinese tax against their U.S. tax bill. But that’s really one for a U.S. tax adviser.

Here’s what that looks like for a small foreign-invested businesses making 1 million yuan in profit. Most small companies qualify as small low-profit enterprises, which pay an effective 5% corporate income tax on profits up to RMB 3 million.

Why the Dividend Tax Does Not Apply to an EOR

It’s worth pointing out here that the new dividend tax doesn’t affect businesses using an employer of record, such as Kinyu’s China Desk. There’s no Chinese company and no Chinese profits to pay out as dividends. Your China team is simply a cost to your business, and your profits stay wherever your business is based.

If you’re weighing up whether you need a Chinese entity at all, China Desk lets you build a team in China without setting one up. For more on how the wider system works, read our guide to China’s taxation system. Or get in touch to talk through your setup.

The post Who Really Pays China’s New Dividend Tax? appeared first on Kinyu.

According to the OECD and the EU Intellectual Property Office, China was the source of 45% of all counterfeit goods seized worldwide in 2021. And one of the main ways to make sure you don’t become part of that statistic is to sign an NNN agreement with your factory.

What Exactly is an NNN Agreement?

In plain English, an NNN agreement legally stops a factory from copying your product, sharing your designs with third parties, or going behind your back to sell directly to your customers. Each “N” in the acronym covers a different way an untrustworthy factory could exploit you:

• Non-disclosure: They can’t share your secrets with anyone else. (This is similar to a standard NDA).
• Non-use: They can’t use your designs for anything other than making your product.
• Non-circumvention: They can’t bypass you to sell directly to your customers or partners.

What Makes an NNN Agreement Enforceable in China

There’s a big difference between having an agreement with a factory and having one that’s actually enforceable in China. There are a few things you’ll need to do to make sure your agreement will be upheld in a Chinese court if there’s a dispute.

The first is to be ruthlessly specific. You’re going to want to define exactly what the agreement protects. What products are covered? What confidential information is involved? Are there any restrictions on the factory making similar products for other customers? And as with any contract, vague wording is going to leave room for disputes over what the factory was allowed to do.

The agreement should also ban subcontracting without your written consent. Many factories in China will subcontract parts of their manufacturing process to other factories, often without you knowing. If that happens, your agreement won’t cover those subcontractors.

You also need to confirm which moulds or tooling you own or are paying for, and that they can’t be used for anyone else. Finally, state how long the obligations last, and require the factory to return or destroy your materials when the relationship ends.

Governing Language and Law

In the agreement, you’re going to want to clarify that it’s governed by Chinese law. If there’s a problem, you want to go after the factory in the jurisdiction where its assets and company are actually located. If you go to a U.K. court, for instance, it’s very unlikely that you’ll be able to enforce any action against a Chinese factory.

And because it’s governed by Chinese law, you’ll also need to make sure the agreement is written in both Chinese and English, with the Chinese version controlling in court. A Chinese court would prefer to deal with the case in its own language, and this reduces the chance of an English translation being misrepresented in court and you losing your case because of it.

The final point on governing law and language is that you’ll want the agreement to state that arbitration is preferred in case of a dispute. You can do this through the China International Economic and Trade Arbitration Commission (CIETAC). The reason you should do this is that the proceedings can run in English, and the awards are enforceable across borders.

Reasonable & Enforceable Damages

Actual losses from IP misuse are difficult to prove, so the agreement should set a fixed damages figure in advance. That figure needs to be appropriate. You can’t just put a gazillion dollars on there, because if there’s a dispute and the court thinks the amount is punitive, it will reduce it, possibly to a figure you’d be really unhappy with. You’ll need a lawyer to help you sort that out.

Check Exactly Who You’re Signing With

A common mistake is signing the NNN agreement with a trading company or affiliate rather than the factory itself. If there’s a dispute, the factory can then say it never signed an NNN agreement. So when you’re preparing an NNN agreement, check your contact’s business licence to make sure they are the factory. The agreement needs to use their exact registered Chinese name, and you need to make sure they stamp it with their official registered company chop, not just a signature.

What an NNN Agreement Can’t Do

An NNN agreement is a powerful tool for protecting you against the supplier that signs it, and a well-drafted agreement can also cover the supplier’s affiliates. But an NNN won’t stop unrelated businesses from copying your product.

For this reason, we’d also recommend registering your intellectual property in China. Think of it this way: the NNN agreement protects you against misuse by your supplier, while registered trademarks, patents and design rights give you legal options against other businesses that might infringe on your rights.

It’s worth pointing out that China uses a first-to-file system, so whoever registers a trademark first usually owns it, regardless of who used it first. There have been many cases of factories, agents and distributors registering foreign brands themselves, then blocking the real owner’s goods or demanding payment to hand the mark back. Registering IP in China can take up to a year or more, so this is something you want to do before you approach any factories, not after.

Enter the Chinese Market Safely with Kinyu

An NNN agreement and registered IP are powerful tools for protecting your product and your brand. But without oversight on the ground, people could be violating those agreements without you knowing. We always suggest complementing both with either a sourcing office or an experienced team on the ground in China. That way you can verify suppliers, manage factory relationships and monitor production, and catch problems much sooner than you could remotely.

We can help set up this kind of on-the-ground infrastructure for you and make sure you’re hiring the right people to oversee your supply chain. If you’re preparing to share designs with a Chinese supplier, get in touch with Kinyu to discuss how to protect your product before production begins.

The post China NNN Agreements Explained appeared first on Kinyu.

Suzhou is a manufacturing city first and a trading city second. It borders Shanghai to the east, and its workforce skews towards electronics, equipment manufacturing, biomedicine and R&D. It also has one of China’s longest-established foreign business communities, including Singapore in Suzhou Industrial Park and German firms in Taicang.

Here’s what you need to know before hiring.

Quick Facts 

Who Should Consider Hiring in Suzhou?

If you need a production, R&D or supply-chain base within easy reach of Shanghai’s ports, airports and headquarters, Suzhou is one of the strongest options in China. The city hosts 317 foreign-invested R&D centres and 238 recognised regional headquarters and functional units of multinationals.

What Suzhou is not is a low-cost or small-commodity location. Its minimum wage of 2,660 yuan sits just below Shanghai’s national high of 2,740 yuan. If your operation is mainly buying and shipping consumer goods, or depends on the lowest possible labour costs, other cities will suit you better.

Talent Profile

Suzhou’s talent pool is shaped by industry rather than trade. The city’s total talent pool reached 4.25 million under the last five-year plan, including more than 160,000 high-level professionals and 452,000 high-skilled workers. The city government aims to add 350,000 graduates with college diplomas or above in 2026.

English Proficiency 

Jiangsu scores 485 on the EF English Proficiency Index, above the Chinese mainland’s 464 but behind neighbouring Zhejiang (506). EF also ranks Suzhou separately, at 473, below Nanjing (512) and Shanghai (508). English is generally strongest among engineers and managers at foreign-invested firms.

Salaries

The minimum wage is 2,660 yuan per month ($395) and 25 yuan per hour ($3.71) for part-time work, effective from Jan. 1, 2026. All of Suzhou, including Kunshan, Taicang, Changshu and Zhangjiagang, falls under Jiangsu’s highest (Class 1) band.

Urban per-capita disposable income reached around 90,000 yuan in 2025, about 30% above the Jiangsu urban average of 68,956 yuan.

Social Insurance

Suzhou follows Jiangsu’s provincial social insurance framework. The contribution base (the salary figure used to calculate contributions) is bounded by floor and ceiling values set by the province each year. For 2026 the range is 5,025 – 25,127 yuan, published on 8 October 2026 and backdated to 1 January. Employers can settle any shortfall caused by the new limits by 31 December 2026 without late fees.

Example:

• If you hire someone at 8,000 yuan per month, their pension contribution is calculated on their full salary. If you hire someone at 30,000 yuan per month, it is calculated as if they earn 25,127 yuan (the maximum base). If you hire someone at 4,000 yuan, it is calculated on 5,025 yuan (the minimum base).

Here’s how the contribution rates break down in Suzhou:

Housing Fund

Both employers and employees contribute to the housing fund in Suzhou. The contribution rate is set between 5% and 12%, with both parties using the same rate. Each company chooses one rate, applied uniformly across all employees. The base runs from July to June: for 2026–27 the ceiling is 40,600 yuan (three times the city’s average monthly wage), and the floor is linked to the minimum wage.

To understand how these figures impact your company payroll cost, please use our salary calculator! 

Leave Policies

Suzhou follows Jiangsu’s provincial leave rules. Public holidays don’t count towards the leave below. Under Jiangsu rules, marriage, maternity, paternity and parental leave count as days worked, so pay and benefits are unaffected.

Sick Leave

Sick leave entitlements depend on the employee’s length of service and medical documentation. Under the Jiangsu Wage Payment Regulations, sick-leave pay cannot be lower than 80% of the local minimum wage, or 2,128 yuan a month in Suzhou. An employer that pays at this floor must also cover the employee’s own share of social insurance and housing fund contributions.

The post Hiring in Suzhou: Labour Laws, Salaries and Best Practices appeared first on Kinyu.

Four out of five times the researcher was able to join those meetings as an AI notetaker by simply requesting entry, according to Nate Nelson at Dark Reading. Affected organisations included government agencies in 23 countries, HubSpot, Mitsui Fudosan, the University of Tokyo and UC Berkeley.

AI notetakers are so ubiquitous that we tend to overlook the high degree of trust we give to them. This is third-party software that processes the names, voices and other personal information of your employees and clients, turning meetings into searchable corporate data. Many of them usually require access to company calendars, email and contact lists as well.

Despite this, I’ve yet to be in a meeting where somebody asked for the bot to be removed. Like with passwords and two-factor authentication, it’s probably going to take a few more years (and a few more high-profile incidents) before we become more careful.

Cross-Border Regulations

For companies with teams in China, the problem is as much as an HR/data security compliance issue as it is a cyber security issue.

First, there’s the obvious issue that many popular Western choices (Zoom AI, Otter, Fireflies) don’t work in China without a VPN. Plenty of people use these platforms inside China, but they’re usually foreigners with permanent VPN access, and not ideal for local employees.

The more serious consideration is the law, because China treats cross-border data transfer seriously. But not everything is treated the same way.

Most data a business moves in and out of the country is not restricted at all. Price lists, product specifications, factory schedules and marketing material leave freely, with no filing and no approval.

The problem is that popular Western cloud AI notetakers such as Otter, Fireflies and tl;dv process or store meeting data outside the Chinese mainland. If a China-based employee uses one of these services to record a meeting, personal information contained in that meeting may therefore be transferred across China’s borders.

Thankfully, the exemption most likely to help you is the one for transfers necessary to human resources management, which can cover recording your own staff, but only if your China labour rules and employment policies actually document it.

If a China-based client is on the line, however, their personal information would not fall within this HR-specific exemption.

Having said all that, we could not find a publicly reported Chinese enforcement action specifically involving a foreign company using an AI meeting notetaker. So, you might want to take this as our overly cautious reading of the law. Or you might take the view that the rules exist and simply haven’t been tested yet.

Recommendations

So, what would our advice be for cross-border teams?

1. Use Copilot on Microsoft Teams for Cross-Border Meetings

For anything cross-border, use the global version of Microsoft Teams. Most companies with employees in China are on Teams already, so use Copilot to transcribe your meetings. It doesn’t remove the legal grey zone around AI notetaking, but it doesn’t complicate things either: Microsoft is already your processor, and there is no new vendor in the chain.

Microsoft stores Teams and Copilot data based on your company’s Microsoft 365 setup, but different types of meeting data can be stored in different places. Check your data location before relying on Copilot for China-related meetings.

If you are using Teams, we would also suggest blocking third-party notetakers at tenant level, in Entra ID and the Teams admin centre. This prevents staff and clients from bringing their own notetakers into your meetings.

Also note that we mean the global Microsoft 365 tenant, not a 21Vianet-operated one. The China-operated version lacks an AI notetaker.

Western tools

2. Use Chinese Software for China Only Meetings

For meetings conducted entirely within China, consider China-based services such as Tencent Meeting AI Assistant, Feishu Miaoji, DingTalk AI, iFlytek Tingjian and Tongyi Tingwu.

It would also be wise to use one of these tools if you need an AI notetaker for a meeting with a Chinese client.

It is worth noting, though, that while this solves your China compliance problem, using the same tools for cross-border meetings risks running you into another country’s rules by putting data onto Chinese servers. If a China-based AI notetaker records a meeting involving U.K. employees, you also need to consider U.K. rules on sending personal data to China.

Chinese tools

3. Set Up a Tiered Meeting Rule

International law firm Mayer Brown also suggests implementing a tiered meeting rule. Routine meetings can be recorded using your approved tools. Legal advice, HR investigations, performance conversations, trade secrets and board deliberations get no AI notetaker at all.

This is clearly sensible for data security generally, but particularly so for staying in compliance with cross-border data rules. A voice print is one thing, but conversations that include employees sharing personal information such as ID card numbers are another area entirely.

If you really do need a record of a sensitive meeting, use a transcription tool configured to process the audio locally on the device, such as MacWhisper with an appropriate local model.

Local-only tools

For meetings that should not touch anyone’s cloud.

Finally, put in place a one-page policy, in English and Chinese, naming your approved tools, the retention period, your no-AI zones, and giving every employee explicit permission to remove an uninvited bot from a meeting.

The post Which AI Notetaker Should You Use for Your China Team? appeared first on Kinyu.

The rules, which took effect on 1 July, stop short of making these workers ordinary employees. But they close a gap that had left millions with almost no recourse when employers withheld their wages or a workplace injury put them out of work.

If you employ staff in China, it’s worth knowing these new rules. This is because your most experienced staff will hit retirement age well before their international counterparts.

Before the reform began, men retired at 60, women in office and professional jobs at 55, and women in manual jobs at 50. The increases started in January 2025 and run for 15 years, but even when they finish at the end of 2039 the ages will only reach 63, 58 and 55.

So a Chinese woman on a factory floor crosses the line more than a decade before her British counterpart.

The rules are called the Interim Provisions on the Protection of Basic Rights and Interests of Over-Age Workers, and five government bodies signed off on them in May, led by the labour ministry. That is a lot of signatures on one document, and it suggests the government intends to enforce it.

The arithmetic behind the new rules are straightforward: China’s workforce is shrinking and its retired population is growing fast. The pension system cannot absorb that ratio indefinitely. The government’s answer is to keep more older people working. That means raising the retirement age and making post-retirement work viable, rather than something people fall into informally.

The rules are good news for older workers, though they may add costs for employers. The higher retirement age could also pull grandparents out of a childcare system that depends heavily on them. Fewer available grandparents could mean fewer babies.

What Was Broken

Before these new rules, Chinese law stripped you of employee status the moment you reached retirement age or started drawing your pension.

There was one exception: Since January 2025 you can stay on as a normal employee for up to three more years, but only if your employer agreed. So most people who carried on working — and millions did — did it on a service contract, which is closer to being a freelancer than an employee.

The problem was service contracts sit outside labour arbitration. They carry no minimum wage floor and no work injury cover. Workers had to sue in a civil court, which is slow and expensive enough that most never bothered.

The result was predictable. Wages went unpaid, people were put on jobs they were not fit for, and injuries went uncompensated. Working past retirement age in China was, in short, a bad deal.

Judges could see the problem, and China’s top court had already started chipping away at it, creating dedicated categories for over-age employment disputes in 2025 and telling lower courts to stop automatically treating pensioners as freelancers. The new rules do the same job properly.

What the New Rules Do

Short of full employee status, the rules establish four protections that apply whatever the contract says:

Pay: At least the local minimum wage, paid in money rather than goods or accommodation, at least once a month and on time.

Hours and Leave: Normal working-hour limits apply and overtime is generally not allowed, but where it happens anyway it is paid at the full legal rate.

Safety: The job has to suit the worker’s physical condition, and employers cannot hand them work that puts their health at risk.

Work Injury Insurance: The employer must enrol them and pay the premium, with the worker contributing nothing. The detail is still to come, though: the rules say the work injury measures for over-age workers will be issued separately, so how this works in practice will depend on later guidance and on local implementation.

There must also be a written agreement covering hours, pay, safety and insurance, so handshake deals are no longer enough.

Workers can now take these four categories to labour arbitration rather than a civil court. That route is faster and cheaper, and it was closed to them before. They can also report pay and hours violations to their local labour bureau. Separately, trade unions now have a duty to monitor employers and help workers bring claims.

Pension and medical insurance, however, remain optional. Workers already drawing benefits keep them, and others can pay in themselves. Employers may contribute but are not obliged to.

And anyone using China’s flexible option to delay retirement is not covered at all, staying an ordinary employee under ordinary law.

What it Costs Employers

These rules cost money, and employers will price that in. On minimum wage alone, firms that had been paying over-age workers 2,000 yuan ($296) a month must now top up to the local floor — 2,520 yuan in Shenzhen for example. Work injury premiums, previously zero, are added on top, as is overtime.

Analysts cited by Caixin expected the rules to raise business costs and trigger a temporary contraction in hiring of older workers.

The opposing reading, from the Shaanxi Yongjiaxin firm, is that the rules cut costs by capping employer liability. Over-age workers get the four protections, but they still do not count as ordinary employees. On that reading, it means no sick pay, no severance and no permanent contracts. Before the provisions, courts in some places were treating these workers as ordinary employees anyway, exposing firms to all of it.

Both can be right. Compared with what many employers were getting away with, costs go up. Compared with the risk of a judge deciding you had an employee all along, they go down.

What it Costs Everyone Else

One area where this could have an effect is China’s birth rate, though researchers disagree about how much.

Grandparents are, in practice, a significant part of China’s childcare infrastructure. Formal childcare is expensive and thinly distributed, and intergenerational care is a long-standing family norm. Research using China Family Panel Studies data found that families relying on grandparental childcare had roughly four times the odds of having a second child compared with those that did not.

Keep grandparents at work and that surely raises the cost of having a child. One 2025 study modelled what a five-year delay in retirement would do and found that families would have slightly fewer children.

One finding runs the other way, though. A study of internal migrant families found that when parents retired, their children’s fertility intentions fell by 34.4%. The mechanism was income rather than time. Retirement ends the flow of money from one generation to the next, household finances tighten, and the tighter they get, the weaker the intention to have children.

So there are two forces pulling in opposite directions: retired grandparents have time but less money, working grandparents have money but less time, and which one wins depends on the family. That’s a question nobody has settled.

The post China’s New Rules for Hiring Retirees Explained appeared first on Kinyu.

Looking back, the odds of success were not high, but my thirst for understanding this country was so strong that I used to hoover up every insight I could get from my business partner and childhood friend.

We set up two businesses: one a cross-border e-commerce business selling imported goods into China, the other a supply chain finance business providing advanced tax rebates to exporting manufacturers. I knew very little about either. Although the supply chain finance business did well, the e-commerce venture closed within six months, and it taught me a key lesson:

China’s market is big, but the competition is greater.

Over the last 10 years I have seen how innovative ideas get hijacked and markets flooded in the relentless race for share. For me it started with shared bikes — remember Ofo and Mobike? But now you see it in every corner of business: coffee shops, restaurants, cars and gadgets.

As someone lucky enough to have been born and raised in an economically developed country, the rat race on steroids from entrepreneurs who started with a lot less than me is fascinating to watch, but not something I could ever compete in, no matter how high my ambition. The competition is stronger than ever right now, which is why Chinese companies are looking to “go global” into less saturated markets.

Like most foreign businesses in China, I learnt to find the gaps. My time here can be split into a pre-Covid and a post-Covid era.

Pre-Covid was defined by learning and exploring. Living in Changsha, Shanghai and Beijing during those years, I tried many different businesses and initiatives, and worked with many different partners.

Beijing was a huge learning curve, and I was fortunate to be there at the height of the Belt and Road Initiative, working on projects to rebuild Iraq. I cannot stress enough how important living and experiencing life in Beijing is to understanding China, and I encourage more people to spend time there.

I stopped at nothing to gain experience and learn. I even found myself discussing the plight of Basra’s water challenges on Iraqi national television! The pale complexion on my face says it all.

Building relationships and collaborating with Chinese EPC firms taught me a great deal about China and about doing business here. One manager from a state-owned firm taught me something that still shapes our HR business today:

In the West, you have a project, so you search for the people. In China, there are a lot of people, so you search for the project.

China’s population is vast. The demographics are changing, of course, but everywhere I look I see construction, infrastructure projects and all manner of jobs. Is it simply the largest job creation scheme the world has ever seen?

All this learning — and supporting companies to work and do business in China — proved important training for one of the largest events in my life, and everyone’s: Covid-19.

My wife and I decided to remain in China. Many foreign business people had left for Chinese New Year, or in response to the initial scare of lockdown. Through that period of uncertainty and global crisis, I was able to support companies on the ground as they navigated supply chains that were becoming increasingly opaque. We supported businesses across every sector, from electronics, energy and medical equipment to clothing and furniture.

Although I had built a solid foundation for doing business in China, I realised it was not sustainable. In reality I was only scratching the surface of these industries, and I did not have the deep product or engineering capability to challenge suppliers when necessary.

So I decided to pivot: I could hire the people who did. That is how Kinyu SCM was founded — a supply chain company with people-focused solutions. We know enough to understand the challenges within our customers’ supply chains, and to build the right hiring strategy around them. We moved to Guangzhou to base our operations in one of China’s manufacturing heartlands.

Today we have seven offices, hire more than 50 strategic supply chain professionals across multiple industries, and manage over $170 million in trade each year while adding significant value for our customers. Relationships matter, but who you go into business with is a decision with lasting consequences for both your professional and personal life. People say it all comes down to trust — which brings me to another key lesson I have learnt in China:

Trust comes in two forms: trust in someone’s integrity, and trust in someone’s ability. For a successful business relationship, both must be present.

While my school friend brought me to Changsha, the biggest impact on my journey in China — and on my life — has of course been my incredible wife and business partner, Mia. We have made all the important decisions together, many of them life-changing. I am so grateful for all the support she has given me, and continues to give me, as we build our business and our family together.

Here’s to another 10 years.

The post Reflections on 10 Years in China appeared first on Kinyu.

Sany Heavy Industry, the world’s fourth-largest construction equipment manufacturer, is headquartered here. So is Zoomlion, its domestic rival and one of the world’s leading crane producers. A third major player, CRRC Zhuzhou, sits just 40 km away. Together with a dense supplier cluster, these companies have turned Hunan province into the source of more than 30% of China’s construction machinery output.

BYD, CATL, and a string of EV suppliers have opened facilities in recent years, building on an existing automotive base. The city’s universities — including Central South University and Hunan University, two of China’s leading engineering schools — give the talent pipeline a depth that many comparable cities cannot match.

Here’s a breakdown:

Quick Facts 

Who Should Consider Hiring in Changsha?

Changsha is a strong choice for companies in construction machinery, industrial equipment, new energy vehicles, and advanced manufacturing that need access to engineering talent at costs well below Shanghai or Shenzhen.

The city’s defining feature is its concentration of heavy industry alongside genuine engineering depth. Sany and Zoomlion alone employ tens of thousands of engineers, technicians, and production workers in Changsha, and their presence has created a deep pool of specialist suppliers and trained labour that companies in adjacent sectors can draw on.

The university cluster adds a distinctive advantage. Central South University and Hunan University are consistently ranked among China’s top engineering institutions, and between them they produce a steady pipeline of mechanical engineering, materials science, and computer science graduates who largely stay in the city.

Changsha is also China’s entertainment capital outside Beijing. Hunan Satellite Television — the country’s second most-watched channel — and its streaming arm Mango TV (200 million registered users) are both headquartered here, making the city a hub for media and content roles.

New energy is a growing draw. BYD operates a major plant in Changsha with an annual production capacity of 300,000 vehicles, part of a broader pattern of central China cities targeting over 1 million vehicles annually.

Changsha is less well suited for companies for sectors dependent on proximity to coastal ports or financial centres.

Key Employers

English Proficiency 

Changsha scores 511 on the 2025 EF English Proficiency Index — fourth highest among all Chinese cities tracked, behind only Hangzhou (515), Beijing (514) and Nanjing (512), and above Shanghai (508). Hunan province as a whole scores in the “moderate proficiency” band.

Salaries

Changsha uses a two-tier minimum wage structure within the municipality:

• Urban core districts (Yuelu, Furong, Tianxin, Kaifu, Yuhua, Wangcheng): 2,200 yuan/month, 22 yuan/hour
• County-level cities (Changsha County, Liuyang, Ningxiang): 2,000 yuan/month, 20 yuan/hour

According to the Changsha Statistics Bureau, the average annual wage for non-private sector employees in Changsha was 125,162 yuan in 2024 (approximately 10,430 yuan/month) — the most recent city-level figure available.

Hunan province as a whole recorded 102,468 yuan in 2025, with Changsha consistently running above the provincial average due to the concentration of state-linked engineering firms and heavy industry employers like Sany and Zoomlion.

Social Insurance

Social insurance is China’s mandatory employer-and-employee contribution system, covering pension, medical, maternity, work injury, and unemployment. Changsha follows Hunan province’s social insurance framework. How much you contribute depends on each employee’s salary, but there are floors and ceilings — you don’t pay on the full salary if it’s very low or very high.

According to the Hunan Human Resources and Social Security Bureau’s 2025 notice, contributions work as follows:

• If an employee earns less than 4,072 yuan/month — contributions are calculated as if they earn 4,072 yuan
• If an employee earns between 4,072 and 20,361 yuan/month — contributions are calculated on their actual salary
• If an employee earns more than 20,361 yuan/month — contributions are calculated as if they earn 20,361 yuan

Here’s how the contribution rates break down:

Housing Fund

The housing fund is a separate mandatory saving scheme on top of social insurance. Both the employer and employee contribute a percentage of the employee’s salary into a personal account the employee can eventually use toward housing costs.

Unlike social insurance, the rate isn’t fixed: each company chooses a single rate between 5% and 12%, and that rate applies equally to the employer contribution and the employee contribution.

The contribution is calculated on the employee’s actual salary, subject to a floor and ceiling (Changsha Housing Provident Fund Management Centre, 2025):

• If an employee earns less than 2,100 yuan/month — contributions are calculated on 2,100 yuan
• If an employee earns between 2,100 and 31,291 yuan/month — contributions are calculated on their actual salary
• If an employee earns more than 31,291 yuan/month — contributions are calculated on 31,291 yuan

To understand how these figures impact your company payroll cost, please use our salary calculator! 

Leave Policies

Changsha follows Hunan province’s leave framework. Hunan sits broadly in line with the national average:

Sick Leave

Sick leave entitlements depend on the employee’s length of service and supporting medical documentation. Sick-leave pay cannot be lower than 80% of Changsha’s applicable minimum wage.

High Temperature Subsidy

Changsha implements Hunan’s mandatory high temperature subsidy for employees working in hot conditions from June to September.

• Employers must pay the subsidy when employees work outdoors at temperatures of 35 C or above, or indoors in workplaces that cannot be cooled below 33 C
• The subsidy is 300 yuan per month (June–September), paid in cash
• Cooling drinks, food, or other in-kind provisions cannot substitute for the cash payment

Changsha summers are hot and notoriously humid, with temperatures regularly above 35 C from late June through August. Build these triggers into summer planning for logistics, construction, and outdoor service roles.

Ready to Hire in Changsha?

Ready to hire in Changsha without setting up a local entity? Talk to us about our China-focused EOR service and start onboarding talent in weeks.

The post Hiring in Changsha: Labour Laws, Salaries and Best Practices appeared first on Kinyu.

Add in a long-standing SCO Demonstration Zone for trade with Central Asia and a deep bench of Korean and Japanese manufacturing investment, and Qingdao stands out as one of northern China’s most internationally connected cities.

For employers, that means access to a genuinely diverse talent pool at a cost base that remains among the lowest of any coastal Chinese city. Here’s what you need to know before hiring.

Quick Facts 

Who Should Consider Hiring in Qingdao?

Qingdao suits companies in marine engineering and shipping, home appliances and electronics manufacturing, automotive components and biopharmaceuticals. It’s also a natural base for firms trading with South Korea, Japan or Central Asia, thanks to its ferry links, tax-treaty benefits and dedicated cross-border settlement infrastructure. Its universities and research institutes make it a strong option for R&D functions tied to marine science and materials.

Talent Profile

Qingdao’s workforce reflects its industrial mix: heavy manufacturing and appliance production sit alongside marine science, port logistics and a growing services sector. The city’s universities, including Ocean University of China and China University of Petroleum, feed a steady pipeline of engineering and technical graduates.

English Proficiency 

Shandong scores in the “moderate” band on the EF English Proficiency Index, scoring 497 — behind only Hong Kong, Zhejiang and Jiangxi. EF doesn’t break this down to city level, so there’s no Qingdao-specific score, but the provincial figure suggests English isn’t as weak a spot for the region as its industrial reputation might imply.

Bilingual proficiency is common in Qingdao, though it skews toward Japanese and Korean rather than English, a legacy of the city’s deep manufacturing and trade ties with both markets. So while general language skills are strong, employers hiring specifically for English-language roles should still expect a smaller pool than in other cities like Shanghai, and may need to pay a premium accordingly.

Salaries

Shandong’s minimum wage is set on a tiered basis. Qingdao’s urban core — Shinan, Shibei, Huangdao (West Coast New Area), Laoshan, Licang, Chengyang and Jimo districts — sits in the province’s top wage tier at 2,400 yuan per month (around $330) as of 2026, while the outlying county-level cities of Jiaozhou, Pingdu and Laixi sit one tier lower, at 2,210 yuan per month. This puts Qingdao’s core districts ahead of most inland Shandong cities but below the minimum wage rates seen in Shanghai, Beijing or Shenzhen.

In practice, wages for skilled manufacturing and engineering roles run well above the statutory floor, particularly around Qingdao’s West Coast New Area and Chengyang district, where competition for talent from Haier, Hisense and their supply chains keeps pay competitive.

Social Insurance

Qingdao sets its own social insurance contribution bases within Shandong’s provincial framework. The contribution base (the salary figure used to calculate contributions) is bounded by a floor and ceiling that are updated annually, based on the prior year’s average local wage.

Example: 

• Qingdao’s monthly contribution base for 2025/26 runs from a floor of 4,504 yuan to a ceiling of 22,518 yuan per month — one of the lowest ceilings of any major coastal Chinese city.
• A senior engineer earning 40,000 yuan per month has social insurance calculated on the first 22,518 yuan only; the remainder attracts income tax but no further social insurance contribution.

Here’s how the contribution rates break down:

Combined, employer social insurance and housing fund costs in Qingdao typically run to roughly 33–45% of gross salary, depending on industry risk category and the housing fund rate a company selects. Qingdao’s pension contribution rate in particular runs higher than many other coastal cities, so it’s worth budgeting for the top of this range rather than the bottom.

Housing Fund

Both employers and employees contribute to the housing fund in Qingdao, typically at a matched rate of between 5% and 12%, with each company selecting one rate to apply uniformly across its workforce. The contribution base is bounded by a local floor and ceiling, adjusted annually alongside the wider social insurance figures.

To understand how these figures impact your company payroll cost, please use our salary calculator! 

Leave Policies

Qingdao follows Shandong’s provincial leave rules, set under the Shandong Population and Family Planning Regulations.

Note for employers: Shandong’s 158-day maternity entitlement, like Guangdong’s, splits into two funding streams — the 98-day basic period is covered by maternity insurance, while the 60-day reward period is generally paid by the employer. With marriage and paternity leave both now well above the national baseline, factor the increased entitlement into team and budget planning.

Sick Leave

Sick leave entitlements entitlements depend on the employee’s length of service and medical documentation. Sick-leave pay cannot be lower than 80% of Qingdao’s local minimum wage.

High Temperature Subsidy

Shandong operates a mandatory high temperature subsidy that applies in Qingdao. Employers must pay it to employees who work in high-temperature conditions between June and September.

• The subsidy is typically paid monthly, at a rate set by the provincial government and reviewed periodically.
• It must be paid in cash and cannot be substituted with cooling drinks or other supplies.
• The subsidy is in addition to the employee’s normal wage and cannot be counted as part of the minimum wage.

Qingdao’s coastal climate is milder than inland Shandong, but summer heat still affects outdoor roles in shipping, construction, and logistics. This is a real compliance point for any employer with staff working outside or in non-air-conditioned facilities.

Ready to Hire in Qingdao?

Ready to hire in Qingdao without setting up a local entity? Talk to us about our China-focused EOR service and start onboarding talent in weeks.

The post Hiring in Qingdao: Labour Laws, Salaries and Best Practices appeared first on Kinyu.

The good news is, once you break it down, it’s perfectly manageable. In this guide, we’ll walk you through how the system actually works, the tax rates in China you’ll pay, how the Chinese mainland compares with Hong Kong, and what it all means for foreign businesses.

How Does China’s Taxation System Work?

In China, the national government sets tax rules, while local governments collect them. The State Taxation Administration (China’s equivalent of HMRC) oversees the system, while local tax bureaus handle the day-to-day admin: registrations, filings and collection. So while the headline rules are mostly the same everywhere, how they’re applied can vary slightly from city to city.

The taxes themselves fall into three broad buckets:

Your obligations depend on your residency, your entity type (WFOE, joint venture, representative office) and what your business does.

Business-Relevant Tax Categories

Of the 18 or so taxes China levies, most businesses only ever deal with a handful:

• Corporate Income Tax (CIT) is the big one. This is tax on your company’s profits, and every registered business in China pays it.
• Value Added Tax (VAT) is charged on sales of goods and services, much like U.K. VAT.
• Individual Income Tax (IIT) isn’t a company tax as such, but if you employ staff (or pay yourself a salary), you’ll be withholding this from wages every month.

Beyond those, there are situational taxes you may bump into depending on what you do: stamp duty on certain contracts, consumption tax on specific goods, customs duties if you import, and local surcharges that piggyback on your VAT bill.

What Are the Tax Rates in China?

Corporate Income Tax Rates

China’s Corporate Income Tax is 25%. But many businesses pay far less:

• Small and low-profit enterprises pay an effective rate of just 5% on annual taxable income up to 3 million yuan (roughly £330,000), under a preferential policy running to the end of 2027.
• Qualifying high-tech enterprises pay a reduced 15% rate, though you’ll need official certification, and it has to be renewed.

Vat Bands

VAT in China is charged at different rates depending on what’s being sold, not who’s selling it, so a single business offering both goods and services may need to apply more than one rate across its own invoicing. Many exports are zero-rated, which is a meaningful benefit for foreign businesses using China as a manufacturing or sourcing base to sell onward internationally.

Worth knowing: If your annual sales are under 5 million yuan, you’re likely a small-scale taxpayer rather than a general one. Small-scale taxpayers pay a flat simplified rate of 3% on turnover instead, with no input VAT deduction.

Individual Income Tax

China’s system is progressive: the more you earn, the higher the band, across seven brackets. It’s technically the employee’s tax bill, not the company’s, but as the employer you’re responsible for withholding it from wages each month and paying it over to the tax authorities.

The Differences Between China and Hong Kong’s Tax Systems

The Chinese mainland and Hong Kong run completely separate tax systems. Hong Kong’s system is generally simpler and lighter. That doesn’t automatically make it the right choice; where you should base yourself depends on where your customers, staff and operations actually are. But it’s a comparison worth understanding before you commit. Here’s how they differ.

Fewer Categories

Hong Kong simply levies fewer types of tax. Several of the mainland’s staples don’t exist there at all. Most notably, there’s no VAT (or any sales tax) and no capital gains tax.

What does that mean in practice? Less compliance. Fewer registrations, fewer filings, fewer invoices to manage.

Simpler Rates

Hong Kong’s rate structure is also more straightforward. Its profits tax (the equivalent of corporate income tax) uses a simple two-tiered system: 8.25% on the first 2 million Hong Kong dollars of profits, and 16.5% on everything above. Compare that with the mainland’s standard 25% rate plus a patchwork of preferential rates, certifications and time-limited incentives.

On the mainland, the rates can be lower if you qualify, but working out whether you do takes more effort.

Worth knowing: If you have cross-border revenue, or export goods from the Chinese mainland, where your profit is “sourced” can change your tax bill significantly. Get professional advice before assuming either way.

Chinese Taxes on Foreign Businesses

If you set up a foreign-invested enterprise (a Chinese company with overseas owners), it’s treated as a Chinese tax resident, so it pays CIT on worldwide profits just like a local firm. If you don’t set up locally but still earn money from China, watch out for permanent establishment rules: enough activity on the ground, and China can tax you anyway.

Then there’s withholding tax. When money leaves China as dividends, royalties or interest, the Chinese payer must “withhold” 10% and hand it to the tax authorities before the rest reaches you.

Double taxation agreements: China has treaties with over 100 countries, including the U.K., that can cut withholding rates (often to 5% on dividends) and stop you being taxed twice on the same income.

Chinese Taxation Support from Kinyu

If you’ve made it this far, you’ll have gathered that China’s tax system is navigable, but not something to wing. Rates, incentives and filing rules change regularly, they’re applied locally, and the penalties for getting it wrong are unforgiving.

That’s where Kinyu’s China Desk comes in. We help foreign businesses of every size get set up and stay compliant, including:

• Payroll solutions to handle IIT withholding, social insurance and monthly filings for your China-based staff.
• Employer of Record services so you can hire in China without setting up an entity, while we take on the compliance burden.
• Tax and compliance guidance, from choosing the right structure to claiming treaty benefits, in the Chinese mainland and Hong Kong alike.

Ready to make your China operation simple? Get in touch with the Kinyu team and we’ll help you work out exactly what you owe, where and how to keep it as painless as possible.

The post Guide to China’s Taxation System appeared first on Kinyu.

“I don’t think there was a lot of tangibles that people could really base decisions on. So they’re just moving on now,” Eric Olander, editor-in-chief of The China-Global South Project, told the Sinica Podcast last month. The Atlantic Council’s verdict was blunter: “It was a big show — with little to show for it.”

When Trump threatened a separate 10%-12.5% tariff on dozens of countries, including Chinese imports, over forced labour practices last week, it seemed to confirm the cynics. Yet one item from the summit has actually moved forward. And it may be consequential for Chinese suppliers.

US-China Board of Trade

On June 5, the Office of the U.S. Trade Representative published a notice in the Federal Register opening a public comment period on the newly established U.S.-China Board of Trade. Comments are due July 10, with rebuttals accepted until July 27.

The mechanism, agreed by Trump and Xi as part of the Beijing summit package, was described by the White House as the “cornerstone” of the bilateral economic agreement. The idea is simple. Under it, both sides will identify $30-$50 billion worth of the other’s goods that both governments will agree not to tariff.

Total U.S.-China goods trade came to $414.7 billion in 2025, according to the U.S. Trade Representative’s office. So each side’s basket of $30 billion represents roughly 7% of the total relationship — or about 14-15% combined. It is, by any measure, a narrow corridor. Though observers estimate this would just be a start.

“The non-sensitive basket is just such a small part now of our overall trade with China. So maybe this Board of Trade, maybe it starts with that and expands in the future,” said Wendy Cutler, a former USTR negotiator who heads the Asia Society Policy Center in Washington, as quoted by Reuters.

So What Goes in the Basket?

Yet, no matter how small, the significance of that corridor depends entirely on what goes in it. For instance, $30 billion in soybeans is not the same as $30 billion in semiconductors.

“We think the Chinese side will focus those reductions on U.S. agricultural products,” said Even Rogers Pay, a director at Trivium China, told Reuters. “The $17 billion purchase agreement and 25 million metric tons soybean deal, together, would roughly total out to just over $30 billion.”

That would mean the Board of Trade, at least from Beijing’s side, is essentially an agricultural trade mechanism. And a political win for Trump’s farm state base.

On the American side, testifying before the Senate Finance Committee on June 3, U.S. Treasury Secretary Scott Bessent offered an indication of what the Washington’s non-sensitive basket might contain.

“What are $30 billion of things in non-critical industries, non-critical things — fireworks, Halloween costumes, very low-end consumer items that we do not want to reshore, that we want to buy from them,” he said. “And what are things that they would like to buy from us — the seafood, maybe energy — and then we will both agree that that basket on either side will have no tariffs.”

Bessent has repeatedly mentioned energy as a likely component of what China might buy from the U.S., though plastic skeletons for liquefied natural gas seems unlikely to be the deal Beijing had in mind.

Bessent’s examples may have been chosen for their political optics, but the category of low-end consumer items he is describing is considerably broader. Section 301 List 4A — the USTR’s existing tariff schedule covering consumer goods and apparel at 7.5% — is the natural hunting ground for a non-sensitive designation. Products on that list include smart speakers, Bluetooth headphones, bed linens, multifunction printers and footwear: goods for which a national security argument is difficult to sustain.

An Awkward Win for ‘America First’

The economic consequences of all this would be relatively modest. But imagine the U.S. carves out consumer goods and China reciprocates with agricultural products. What would that actually mean in practice?

Coface, the French credit insurer, noted in November 2025 that tariff reductions could nudge Chinese exports of textiles, toys and low-margin goods back toward the U.S. market.

For China’s small export manufacturers — who bore the sharpest edge of the tariff war — a tariff carve-out for low-end consumer goods would be welcome news. For businesses sourcing from China but selling outside the U.S., the indirect effect may be that a stabilized U.S. export lane reduces the pressure on Chinese suppliers to discount aggressively into other markets.

But there is an awkward political optic here. As recently as October 2025, White House spokesperson Kush Desai was telling reporters — ironically in response to questions about the rising cost of Halloween costumes — that cheap Chinese imports were the antithesis of the Trump economic vision: “Real prosperity is good jobs, booming industry, and thriving communities for everyday Americans — not cheap Chinese imports.”

So, the biggest winner from the Board of Trade may be that very import-driven retail model that fueled so much of MAGA’s political energy in the first place. Trump, however, is no policy purist. A functioning Board of Trade, with a product list attached, would give him something concrete to show when Xi arrives in Washington for a state visit on Sept. 24. A deal is a deal.

The post Has Anything Actually Come of the US-China Summit? appeared first on Kinyu.