Over at new blog on the block Rectified Name, Tianjin-based expat Matthew Stinson has a must-read post on China’s new social insurance for foreigners that distills everything you need to know about the new rules down to six points. Here’s what jumped out at us:

The law only applies to foreigners with a “Foreign Experts Certificate,” aka the “work visa” aka the Z Visa aka the Zed Visa. Here’s where the perverse incentives come into play. If a foreigner has a tourist visa, business visa, or marriage visa and is thus working illegally (Yang Rui knows who you are!), he/she won’t have to pay into the system. In fact, the requirement that employers must make contributions on our behalf means that, all other things being equal, an illegal employee is going to be considerably cheaper than a legal one, even if the foreigner in question has exactly the same contract salary as his/her legal counterpart. Moreover, employers during the next round of contract renewals may decide to pressure employees into changing their visas and working illegally so as to cut costs, and foreigners themselves may agree, figuring that the risks of being one of the san fei is worth the benefit of paying fewer taxes. At the same time, an employer wishing to stay aboveboard may decide to keep employees legal but refuse to offer raises during the next contract on the grounds that we are now receiving the “benefit” of social insurance. We haven’t even factored freelance workers into the equation – those working legally should fall under the aegis of the social insurance law, which begs the question of whether they or their employers are prepared to pay the tax. [Read the entire post here]