Relocating from Seattle, WA to China Dalian

[pjam76]

I got a job offer as a Software Engineer for a role with a large US corporation in China Dalian. I guess it's the China headquarters or location or what not.

Anyway, the offer is around 11,000 RMB per month, 1-2 months salary signing bonus, plus 35% of salary foreigner allowance( i have no idea what this is), and whatever commercial insurance that employers get. It should be a 2+ year project.

So after everything is settled, I'd get around 140,000 RMB per year. I don't know what that equates to in China Dalian.

I know in the US, making 100K per year is what I'm used to. I live comfortable but I live in a city where houses are a million dollars. So I'm more or less middle class. I can buy some things and relax once in a while.

What I'd like to know is on 11,000 RMB per month, what should I expect my living conditions to be? Will I be able to travel around on days off? WIll I be able to eat out when I want to? Will I be able to live in a decent apartment?

I'm just not sure what to expect on 11,000 RMB per month in China Dalian.

The only thing I know is 140,000 RMB per year is about 20K USD per year. Which is really poverty in most of the USA. So would 11,000 RMB be poverty in Dalian China or would it be considered more middle class.

Thanks for any info.

[gougou]

You will be able to live comfortably (people on RMK 2,000 a month can eat out every day - as long as they're sticking to the local joints), but you should be able to make more than that. Refer to this thread, for instance.

[ChineseSpeaker]

if you don't want to buy a house, you will be able to live in comfortable. House in the big cities of China is very expensive now.

[cdn_in_bj]

Actually, above 10k/month you would be considered a high-income earner by the tax bureau, so maybe this will make you feel better. This doesn't necessarily mean that you'll be able to have the same type of lifestyle as in the US, but if you "live like a local", then you should be quite comfortable here on that salary.

I am not familiar with the job market in Dalian, but having visited the city and also being familiar with the situation in Beijing and Shanghai, the offer sounds reasonable for an intermediate position. However, you did not mention anything about your experience - I would think that if this is for a senior position you might be able to get a bit more, especially since it is a foreign company, but again I am not familiar with things in Dalian.

However, I do like the way that your offer is structured - the signing bonus will help you get settled here, as most firms pay salary at the end of the month.

Also, in regards to the "35% of salary foreigner allowance", I believe what this refers to is a tax deduction against qualified expenses such as housing and food costs, up to 35% of your monthly income. If so, what your employer will do is structure your salary so that part of it is actually considered an allowance on the books, which is tax-exempt. The benefit to you is that you will pay less income tax. This is a very good "benefit" as not all companies are willing to do this as it is a bit of a hassle for them.

For example, as a foreigner, the first 4800 RMB of your monthly income will be tax-exempt. Then, with the 35% deduction, take off another 3850 RMB. That leaves 2350 RMB of your income subject to tax, at a rate of 20%. In other words, you will only be paying around 470 RMB/month in income tax. That is an effective tax rate of 4%, compared to the 30-35% rate I'm guessing you're paying right now. You'll have to ask your employer how the allowance works, but it usually involves submitting official tax receipts ("fapiao") to the accounting department on a monthly basis.

Did you ask about the performance review/salary adjustment schedule? Salaries here are rising faster than in the US, and since it sounds like you're going to be here for a few years you don't want to miss out on that.

You should also consult a tax accountant in the US as you should be exempt from paying US taxes on your income earned while in China.

[newyorkeric]

You should also consult a tax accountant in the US as you should be exempt from paying US taxes on your income earned while in China.

I thought that Americans were subjected to US taxes when working overseas. Is China a special case for some reason?

[magores]

newyorkeric

I'm not a tax attorney, but here is how I understand it...

If you are an American working in China, Canada, Russia, or wherever up to x dollars is tax-exempt. Anything above that amount is taxed.

I think the amount is $60k USD. So, any salary earned below 480k RMB (or so) is exempt from US taxes.

[cdn_in_bj]

I think the amount is $60k USD. So, any salary earned below 480k RMB (or so) is exempt from US taxes.

The rules have changed a bit and the exemption is around 82k USD/year now. As for how and why, I don't have the details but an accountant or Google would.

[Rincewind]

11k RMB per month in Dalian is plenty plenty. Assuming your single, you'll have a decent amount of spare cash to play with.

It does depend a bit on your lifestyle. If you by imported beer and food in posh bars every night then you're going to run low on cash, but if you by local beers and food you can still go to posh restaurants and have money left over. Your income gives more than enough to rent a nice house looking house and kit it out with nice furnature. However, if you want the latest hi-fi, TV, computer etc then you'll not see much difference to the US price. If you already have this stuff in the US, then bring it with you.

[DrZero]

Do they offer housing, or a housing allowance? While the salary is quite good for local standards, and you would live very comfortable, my impression was that the pay for foreigners hired in this fashion was often much better.

For comparison's sake, English teachers typically make something like 4,000 to 6,000 starting out, and maybe 10,000 with experience and perhaps a few private lessons on the side. I've heard of people putting together a few gigs and some private students in their homes and ending up with 20,000 a month, but that would involve working a lot of hours. The thing is, with English-teaching gigs, an apartment is usually included, with utilities paid.

Anyway, if you are not a high-roller, I think you ought to be able to save 50 percent of that salary if no apartment is provided, and maybe 75 percent if an apartment is provided.

All that said, going from being a $100,000 earner in the U.S. to an 11,000 RMB a month earner in China doesn't quite rub me the right way. A lot of people on expat packages over there have amazing salaries and perks. They may be at the executive level for the most part, though.

[imron]

However, if you want the latest hi-fi, TV, computer etc then you'll not see much difference to the US price. If you already have this stuff in the US, then bring it with you.

Don't bring large furniture items with you. You can buy the same stuff here for the price it would cost you to ship it, plus it won't arrive broken. Many rental apartments also come furnished, so this probably won't be an issue.

[WangYuHong]

Where do people find all these nice jobs to relocate to China?

I'd love to take a software development position over there, but I guess I don't know the right people yet...

Anyway, congrats on your offer!

I looked into the US tax code a couple years ago (or tried to look into it, it's still utterly complicated), so checking with a tax professional is probably your best bet...

As I understood it though (and as someone else already mentioned), the money you earn over there wouldn't be taxed by the US, up to a certain point (probably close to $82k, I actually thought it was over $88k, but who knows), provided that you prove that you "live" over there now. The IRS site has a bunch of requirements, like being over there at least 330 days of the year, probably with some exceptions... etc. It definitely took a lot of work to try and find all that out though, and it doesn't usually apply to the first year that you go there (since you're probably in the US for more than 30 days that year), although you can go back and amend that year's tax return the next year...

[cdn_in_bj]

Where do people find all these nice jobs to relocate to China?

I'd love to take a software development position over there, but I guess I don't know the right people yet...

Actually the job market is pretty good here, but you're not likely to find one paying expat salaries unless you get transferred over or switch fields, such as investment banking.

[WangYuHong]

Yeah, I'd love an expat salary... (I can still dream, can't I?)

But even still, I'd consider a job offering 20,000+/month (if the other benefits lined up)

[adrianlondon]

There aren't that many "expat salary" jobs in China. It may seem like there are a lot if you wander around expat communities in Beijing, but spread over the whole of China there aren't many.

Chinese companies don't pay very highly.

Western companies relocate to China to save money.

So, most highly paid jobs in China are either short term (helping set up a computer system for example) or running your own business.

Of course, jobs do exist, but not in huge numbers; that's what I'm getting at.

For example ... I'm an SAP consultant. I earn good money in the UK and was offered a job (for an American company setting up) in Guangzhou. I asked for the same daily rate I get in the UK (and explained that I wouldn't charge them for the additional living-abroad expenses), and got laughed at. Not surprising, really. Their counter offer was rediculously low. It's better for me to work in London for 6 months then spend 6 months in China just bumming around, or doing something I want to do (which is what i did last year). Weigh up all your options.