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Less resistance to localize salaries

COMPANIES on Chinese mainland are expected to face less resistance from expatriates on localization of compensation packages amid the economic downturn, an industry survey said yesterday.

Corporations are still optimistic about the Chinese mainland's economic growth and still see cross-border movements into the mainland increasing, said PricewaterhouseCoopers International Ltd yesterday in Shanghai, quoting a survey finding. The firm surveyed 112 companies on the mainland from July to October, with 92 percent of them multinational companies.

"Chinese mainland remains the top assignment location in Asia," said Stacy Kwok, a partner of the accounting firm. He said that companies could find it easier to lure expatriates to work on the mainland even if compensation packages were to be localized, especially during the current economic climate.

It was difficult previously for firms to localize expatriate remuneration packages on the mainland because of high taxes, different lifestyles and schooling problems for children.

The mainland imposes individual income tax from 5 percent to 45 percent, leaving senior management reluctant to agree to a localized package.

The resistance may ease due to the global economic downturn because China is seen as the major economy which could still post an economic growth, albeit a slower one.

Corporations will also hire more returned Chinese, or so called haigui, who have studied overseas or have working experience abroad, in two years as they understand Chinese and the intricacies of doing business on the mainland, the firm said.


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