Now, FOUR Years in China

I don’t have time to talk much about our visit to the Forbidden City. I’ll do a better write-up in the future as this trip was a quickie one. In general, it’s the biggest tourist attraction in Beijing. In the photo, on the far lower left background is a window with green decals. Any guess what it could be? (drum roll please….) Yes…it’s the Starbucks in the Forbidden City.

I thought they were pretty serious about putting one on every corner in the US…little did I realize that Starbucks wants to put one on every corner in the world. I actually feel really bad that the government allowed them to put one there because it sort of violates the spirit of what the emperors were trying to achieve. The Great Wall is a great example of the vast resources and energy they spent trying to keep everyone out of China. But then again, it was pretty hot and that Grande Mocha Frappachino sure hit the spot!

Last week, a Finnish man committed suicide by jumping off the apartment building next to ours. In the photo you can see a walkway that goes over a down-ramp into an underground parking area. He fell through the square area made by the walkway and the 3 rows of hedges. It turns out that he and his family lived on the bottom floor of our building but he chose the location next door in order to be discreet…especially considering that there is a playground in front of our building.

Other people we know here knew the family and Lisa remembers seeing them around. It’s really sad to think (but not surprised that) he didn’t have the support in here to address his problems nor the community to recognize that he was having troubles.

Rumor has it that he was having business trouble. I don’t know his specific situation but a lot of companies send people out to China to take advantage of the burgeoning market and they will send one person out to get things started. Without a group of people like yourself, it would be very easy to feel isolated and the pressure to succeed would be quite tremendous. Combine that with a deeper mental illness and it’s not completely surprising to see things happen this way.

We came here to have new experiences and reshape our perception of the world. While this is one of the bad ones, it is another that adds to the fabric of our experience here. Our thoughts go out to his family.

I just could not take looking at the front of this blog any more. I created the titles before we moved here when I had visions of this grand journey to an exotic land to the East. Well, it’s not that exotic and not that grand….as a matter of fact, it can simply be a big pain in the ass sometimes. I’m sure those of you following this blog from your expat post in Asia were wondering when I was going to crack. I’m not sure I will be able to adequately convey this feeling to my friends in the states.

The school hands out literature to families who have just arrived in Beijing which includes a line graph chart. X = time, Y = the average expat’s psychological state. The line starts out a few months before coming and ends a year after you return home. When the first few months into the assignment starts, the line is very high - this is the “honeymoon phase” where the adrenaline is pumping and everything seems great. In some ways it’s natural excitement but in others it’s probably your body’s reaction to the wholesale replacement of daily stimuli. But two months in, the line falls into the deep trench. In general we don’t feel bad…just tired at the end the day.

It starts when you step off the plane…you are bombarded with new smells, new air, new pollution, new bacteria and so on followed by the more invasive food and water. I kept thinking of the reaction our plants have to being re-potted and/or moved to other locations in the house. Despite the fact that we drink bottled water here, produce and livestock are fed the local water and food is usually cooked with the local water. The local water has it’s own smell and I’ve concluded that this is where the “China smell” comes from. I asked a neighbor who sells industrial water treatment systems here about it and he said that the local reservoirs contain huge amounts of algae and the treatments required to deodorize it could be more dangerous than the algae itself. Either we’ve adapted or the cooler temperatures have made it less funky but we don’t notice it anymore.

If you visit China, you will be able to experience some amazing food before you head back home. We’ve had some amazing things too. But after a while, you start to miss the items you enjoyed back home. Heck, I had cravings for Texas BBQ the entire time we were in Georgia…now I’d kill for any BBQ from the US. But here, the cravings for specific things take a back seat to the basics such as a hamburger or hot dog. There seems to be an attitude here of “ground beef is good…but it would be much better if we added xxxxx”. That’s why almost every hamburger I’ve had here tastes like meat loaf. So everywhere we go that serves western food, I order a hamburger with the hopes of finding a decent one. With each subsequent failure, I start to accept defeat. Maybe I’m due for a trip to the Hard Rock Cafe here. I never imagined that I’d ever choose to visit a Hard Rock Cafe nor would I have imagined it would be for the food.

The odd reality is that this place is very westernized and we can get lots of the same brands here albeit for a premium price but we can’t always get “our brands”. Knock on wood that we can at least get Old El Paso salsa, beans and taco mix but even these items aren’t consistently on the shelves. Our grocery stores are small places with a combination of Chinese brands offset by a greater number of German, French and American brands of which many are the Chinese-produced/labeled versions…yes, Heinz isn’t just catering to westerners in China.

Next is re-learning how to get simple things done in a place where you are virtually retarded. When we first arrived, I characterized it as “fun”, followed by “challenging”…now it’s just a pain in the ass. This is what killed Lisa a few times here. With the knowledge that things are hard here, she set 2 seemingly reasonable goals…order water and book a doctor’s appointment. Neither places she called “hway sho-wa yinguin” and she couldn’t complete her task…China wins again. It all has to do with managing your own expectations and making compromises with yourself. Without help, you (the average expat worker family) will never have the level of independence that you had in your home country.

The next thing that beats on you is the “prolonged repetition” of the little things. Excuse the metaphor but Chinese water torture comes to mind (note: that would make a great title of a blog entry). It’s not the dirty squatter toilets that you occasionally encounter…sure, it’s foreign but you know it’s foreign. It’s the really little things like the light switches. Oddly, I like the switches here better than US ones, but again…it’s different and you have repeated exposure throughout the day. To date, I’ve flipped a US style light switch close to 250,000 times in my lifetime…thats a fairly ingrained sensation. The same holds true with the skinny rectangular license plates on cars…years of visual impressions are tying to be replaced with new ones. I wouldn’t have realized this until I had a short burst of euphoria after seeing a car in my ‘hood with Texas plates.

Then there are the things which might have nothing to do with China or living in a foreign place. I think the car has a lot to do with it. We’ve gone from being a 2 car family to a 0 car family in the outer ‘burbs. Lisa and I used to live in a warehouse loft in downtown Dallas and really enjoy urban living. But our choices within walking distance are pretty lean. It’s 1 mile on a dark road to a tiny strip of stores, restaurants and Starbucks. The charm of riding a bike everywhere is lost when you get back from the store and realize that you forgot to get a key ingredient for dinner.

While you might think we’re hating life here, we’re not. It’s still fun, interesting, entertaining, overwhelming, exhausting and so on. We’ve avoided acknowledging the bad and ugly stuff here out of fear that it would make it more “real” but we seem to have room to do that now. We knew parts of this would stink…little did we know it would be all-encompasing at first. In retrospect some might call the first few months the “honeymoon” but I think I’ll remember it more like “boot camp” where simple pleasures have a euphoria because everything else is so hard. We’ve pushed our boundaries and tested our strength and have a pretty good idea about how to be comfortable here.

Between the prospect of driving soon, in conjunction with (the possibility of) finding a town home within our budget, we are on track to settle in a little better. It may be far from “total immersion” into the culture here but trust me when I say that all the culture you would ever need is only a few hundred meters outside the gates. Despite the affluence of the compounds here, we are in a rural area north of Beijing where news about good hygiene habits gets lost somewhere between 4th ring road and Jinshung Lu.

I think you can officially call yourself a resident here when a visitor says “what’s that funky smell?” and you honestly answer “what smell?”.

No time to tell how crazy some of the questions were or how difficult it was memorizing the fine structures for every conceivable offense, but I passed the test. Step 2 will be getting a car which should provide for at least a few entries worth of entertainment.

The school is developing a contingency plan for the possibility that the school will not host classes at the school due to the avian flu. While some families might evacuate the country and return to their home countries, the disturbing reality is that there really won’t be time to evacuate if a case of human-to-human transfer is discovered anywhere in the world. Once it is confirmed that it can spread amongst humans, the World Health Organization is going to close all international borders. Even scarier is the fact that areas around Beijing will be locked down too.

My guess is that (if it hits) there will be quite a few families who remain here. A number will be back in their home countries. Luckily, the systems I was hired to install support online learning, collaboration and assessment. The challenge will be training the entire teaching staff to use them in such a short period of time. While these systems are quite easy to use, the task of re-engineering a teacher’s ability to adopt them and adapt them to their curriculum will be much more difficult. Fortunately the school has a handful of teachers who understand both sides and will be tasked to train the others.

If the poop hits the fan and we have to implement “plan-b”, it will make a very interesting case study for distance learning at the k-12 level. Studies have already shown that tests scores and attendance improve when students become collaborative creators rather than consumers of content. We could all return to Beijing with a very different type of learning environment with teachers augmenting their curriculum with these new tools.

On one hand it’s very scary to be faced with this…one the other, it’s exciting to see the work I’ve been doing have a positive impact in such a short period of time.

DISCLAIMER: The following provides some loose interpretation of the tax laws in China and in the US…I’m not a tax attorney…I’m just a schmuck living in China who is trying to learn how things work. I will not be responsible for any decisions you make based upon the information on this site. Get an attorney and/or accountant to answer the specifics.

In my time here, I’ve encountered a large number of expatriate workers who have “creative” arrangements with their compensation. Here are a most of the arrangements I’ve heard of….

1. Local Employer - Salary is paid by a employer (or local subsidiary of an overseas company) in China (not really creative…just standard).

2. Overseas Employer - Salary is paid by an employer in their home country into their home bank and uses ATM and wire transfers.

3. Subsidiary + Overseas Employer Hybrid - Employee is assigned to an paid by a local subsidiary, but also receives deposits in their home country bank account by their emplyer in their home country to cover their expenses while they are away. This also keeps an employee’s insurance and benefits in tact.

4. Sponsored - An overseas company or organization transfers money to the employee’s Chinese employer to fully pay or augment the employee’s paycheck.

5. Different Domestic - Employee receives compensation from a domestic company that is unrelated to your local employer.

If you work in China and are paid in the US…regardless of whether the money reaches you in China, you are (technically) required to pay taxes in China for that income. That means, if you design a website for a friend and he credits your Paypal account….guess what? You are liable for taxes in China and should be going down to the tax office to pay taxes on that money. That’s right…if you do work for someone in the US and are paid in the US but are physically in China when you do it….you must pay Chinese taxes. And to make things interesting, you pay each month.

Now, let’s take it up a notch and say that some US company puts you on their payroll while you are in China…even for a tiny, part-time salary in exchange for your availability at trade shows around the world, remote work, writing, etc. You guessed it…you must pay taxes.

What do they tax?
Sorry, but that matching payment to your 401k isn’t exempt here. If a dollar value hit’s your bottom line, they tax it here.

What about my US taxes
Well finally Uncle Sam gives you a break because double taxation puts you at a disadvantage to locals in the host country. Appaerently, you are free and clear up to $80k that you earn in a foreign country. I will address this issue later because I’m not certain if you get a tax credit for foreign taxes paid on amounts higher than $80k or not. I’ve just been told that a person can stop withholding taxes from their local paycheck if they are in another country. Consult a good tax attorney for the details.

“But gee, there is no record of this company because my visa was arranged through the local company. How would China know I have any relationship with any other company?”

Realistically , they probably wouldn’t…especially if you are making tax payments on your local income. (note: I am not advocating that you break the law in China). The authorities here would first need to have a reason to suspect this, followed by an expensive process of finding out what the numbers are…it just wouldn’t be worth their time unless you were pulling in some serious greenbacks. No matter what, they would make your life hell over this.

But let’s say that the company paying you domestically is a multinational corporation doing business in China eventhough you are being employed in China (including visa sponsorship) by a completely different entity. Again, it might be difficult for you to be caught because there is no record of your relationship with that company in your home country. BUT here’s the catch - Along with making your life hell, they could go after the local subsidiary and assess a huge fine and/or affect your company’s ability to business in China. Therefore, a savvy multinational corporation will usually hire a tax attorney and a local accounting firm in China to ensure that your taxes are being paid on monies you are paid by them anywhere else in the world.

What about a short business trip on a 30 day work visa?
The company who invited you in is liable for your tax payment and it’s being enforced now because of the link between the immigration and tax systems.

Penalties
Now, what happens if you are caught failing to pay taxes here? The penalty is 3x the tax bill + interest. So $4000 income in a month = $1800 taxes x 3 = $5400 + interest. Definitely not small change and definitely not worth the risk.

This is my first stab at understanding the tax system here. There are a lot myths and misinformation around this because people instinctively want to avoid taxes, and let’s face it, it’s easier to do that when you are an expat in a foreign country. It’s compounded when the country can’t provide drinkable water or clean air…it just makes you angry. But this is a developing nation and by China standards, we are sort of wealthy (as someone on a teaching package can be) and in all societies, the wealthy do not (usually) utilize the services that their taxes pay for but rather gain benefit from the social stability it provides.

I just completed posting a set of photos from Bali. The can be located here….

Having a Blast in Bali - Oct 2005

Day 1 (Thursday) - Travel to Bali
Singapore Airlines was the best airline experience I have ever had…better than first class in the US and even better than Business class to Beijing on United (which really sucks). Elegant, attractive, and gentle flight attendants served hot towels, hot breakfast and a hot lunch with real silverware along with toys for the kids on a brand new 777 with personal entertainment centers for each seat and about 30 movies to choose from. It rocked. Our brief layover in Singapore afforded us the ability to have some Burger King. The first bite made me miss the US…the last bite reminded me why I don’t eat Burger King in the US. Long day of travel…checked into hotel where there wasn’t a 3rd bed. Lisa slept on a mattress on the floor (her choice because maddy and I both kick).

Day 2 (Friday) - Toured
Scoped out neighborhood around hotel and walked to the beach. We found a better hotel with a suite next to the beach for only $20 more. Booked it, checked out of other hotel…paid penalty but it was worth it because the first one was better suited to adults with no kids. Hired a driver, visited temples, wood carving factories, a Balinese home, and had a great lunch at swank restaurant in a rice paddy. We then drove to the Dreamland surf beach followed by our trip to Ulu Watu temple perched high on the cliffs of Nusa Dua where monkeys seemed to own the place. We watched a traditional fire-dance, had a great fish dinner on the beach at Jinbarin Bay, went home and slept like rocks.

Day 3 (Saturday) - Boat Trip to Lembognan Island
Despite missing the free shuttle from the hotel, we made it to the port to catch the boat to Lembognan Island. We chilled out on the beach, snorkled, swam, rode the banana and had a great bbq lunch with traditional Indonesian food. Returned to the hotel and went swimming with maddy. Noticed a nasty sunburn on one part my back that I could reach. Went to Poppies restaurant where we SMS’d another US family from Beijing to join us. Had great service until about 7:30 pm when the wait-staff virtually disappeared. Spent 2 restless hours only leave onto a dark, scary street. Found a driver to shuttle us all back to our respective hotels.

Day 4 (Sunday) - Laying Low
Awoke to the news about the bombings and realized that we were only a few blocks from the one in Kuta and that our restaurant from the night before was only 100 meters from the beach cafe that was bombed. Damn terrorists. We hired our same driver from Friday and went to the Hyatt and camped out with our friends and played on the water slide all day at the pool. Went back to Ulu Watu with them. Their daughter’s glasses were stolen by a monkey and we had to pay a local woman to bribe the monkey with food to get them back. Afterwards, we went to dinner at Blue Point which was the most beautiful restaurant in the world perched up on the cliffs above the indian ocean.

Day 5 (Monday) - Elephants
Hired our driver again to take us to the elephant park. At the entrance to the park, the other family was broad-sided by a girl on a motorcycle which showered glass all over their kids. She was fine but our friends were freaked out. We rode elephants and headed back to the Hyatt for another day in the pool followed by dinner at the restaurant at the Hyatt.

Day 6 (Tuesday) - Fly to Singapore
Didn’t want to leave Bali but we had to catch an early morning flight to Singapore. Arrived around noon and hung out at Funan electronics mall. Headed over to the Singapore Plaza mall where we had dinner followed by going to a real, honest to goodness, movie…The Dukes of Hazard. Our desire to see a movie, especially one set in Georgia outweighed our parental discretion as there were quite a few things that Maddy shouldn’t have seen. She claims that we didn’t corrupt her innocent little mind…I surely hope not.

Day 7 (Wednesday) - Chilled Out
Had breakfast at Funan and went to Raffles City Center mall and spent the better part of the morning there shopping and simply basking in the rays of western civilization and commercialism.

Day 8 (Thursday) - $30 worth of disappointment
Maddy and I were on a mission to go to a water park. After spending $15 on cab fare to cross the island, we experienced the scene from the movie Vacation “sorry folks…’ park’s closed…the moose out front should have told you”. $15 back into the city and Maddy and I spent a good portion of the day at the pool while Lisa explored Raffles hotel and shopping areas. We went back to the Long Bar at Raffles and had some Singapore slings followed by a $280 (singapore dollar = $180) dinner at the Long Bar Steak House at Raffles. Yeee-ouch! But it was really good…the $3 meals in China afford you this type of splurge twice a year.

Day 9 (Friday) - Solo
Visited the Apple office and had a meeting with the marketing folks for Asia while Lisa and Maddy went shopping. Met back with Lisa and Maddy for lunch and embarked on my mission to replace the earpads of my Bose headphones. I took the wonderful MRT train out to the area near the airport, followed by a $2 cab ride to the shipping warehouse for Bose’s importer. They had a nice, clean office. $50US and an hour later, I was on my way back to town to shop for a bunch of technical books. We then took a bus out to the Marina Center Mall and had another good dinner. We went to Suntec City Mall and got duckboat tour info followed by a laser show at the Fountain of Wealth which the largest fountain in the world (too bad they don’t have the largest gumball too).

Day 10 (Saturday) - Duck Boat Tour and Dinner with Ethyl
Headed back to Suntec to hook up on the duck boat tour which is very overrated. I had many people say we should do it but it was a total waste of money. $10 in cab fare and you could have seen the same things. I guess to some, driving a truck into the drink is just…oh so exciting. I think we were also cooked at this point and ready to get home. We ate at Swensens…yes…the ice cream place that you don’t see in the US anymore. They are all over Singapore…almost as bad as Starbucks. Combined with the fact that Dep hair gel is *the* premium brand in China, I would derive that fading brands seem to be one of America’s favorite exports. For dinner we visited the home of a lovely woman who we share a mutual friend with in Atlanta. She’s a school teacher at the US intl. school in Singapore. Alergies were going ballistic so I called a cab to take me to the drug store and back to this woman’s house…yes…they were that bad.

Day 11 (Sunday) - Flying Home
Woke up at 5:30, finished packing, headed to the airport to catch our 8:45 flight back to Beijing. Had breakfast at the airport, bought another set of headphones and waited for our flight. I have never welcomed air travel but I truly looked forward to traveling on Singapore Airlines and didn’t leave my seat for the entire 5.5 hour flight back to Beijing…it’s that enjoyable. Mr. Lu picked met us at the customs checkpoint at the Beijing airport and were were really glad to see him and started telling him about our great adventure only to realize that we were back in China where nobody understands a thing we are saying. Oh well.