China, Switzerland ink social insurance deal

China and Switzerland signed a social insurance agreement Wednesday that will exempt company personnel sent to work in each other's country from mandatory social insurance contributions.

The move will considerably reduce costs for companies of the two countries and increase their competitiveness, said China's Ministry of Human Resources and Social Security.

Without the agreement, Swiss citizens working in China have to participate in five insurance programs -- pensions, medical, work-related injury, unemployment and maternity insurance -- in accordance with the law, and both the employee and employer must contribute to the social insurance premiums.h According to Chinese rules, if a foreigner leaves China prior to reaching the statutory age for pension withdrawal, his or her social insurance personal account will be retained, and the contribution years will be calculated on a cumulative basis if he or she comes back to China to work again in the future.

The insurance premiums account for nearly 40 percent of a foreign employee's wage, but employees cannot receive pensions until they have paid premiums for a total of 15 years.

China has signed similar bilateral social insurance agreements with Germany, the Republic of Korea, Denmark, Finland and Canada, in addition to Switzerland. Endi