China's Belt & Road Initiative now includes 147 countries and territories around the world that have signed up to participate in the scheme. This has resulted in a massive redevelopment and infrastructure push by Beijing, both to secure future supply lines and to develop new markets. China has been able to take this massive task on due to three major reasons:

  • It possesses the worlds largest foreign exchange reserves, valued at over US$3 trillion. (By comparison, the United States is 22nd)
  • China can afford to borrow money at very low rates. Via the BRI, it has been passing these rates on, together with a small mark up, to nations with poor credit ratings and who otherwise would not be able to afford development cost interest repayments.
  • China (and most recipient nations) understand that the infrastructure build itself, rather than the cost, will secure future fiscal growth in trade and wealth creation.

This will, and is, creating additional development opportunities, and especially as infrastructure build reaches conclusion in many countries affiliated to the BRI. Those with completed projects will start to see this infrastructure being utilized, facilitating the development of new trade routes and new market opportunities. These may be city to city, or city to port, or cross-border, or a combination of each; there are thousands of such projects underway on a global basis. Taking advantage of that is the key element for international MNC's to keep an eye on when looking around for opportunities. Getting involved in China's Belt & Road Initiative is rather more than than seeking project contracts. It is looking where the opportunities lie, post-build, contributing to that wealth creation, and profiting from it.

In this article we provide details of the available work forces, minimum wage levels and the pertinent individual income tax rates in each country associated with China's BRI. This allows global MNC's to begin an initial assessment of where the developing opportunities are as a local cost of business exercise.

Next week we shall identify the applicable Corporate Income Tax rates, Double Tax Treaties and Free Trade Agreements that will also impact on future trade flows – again including all 147 countries and territories along the BRI. To ensure you obtain that report, readers may obtain a complimentary subscription to Silk Road Briefing here.

Note: Minimum wages can be dependent upon location or position and may not include other mandatory payable allowances.

Income Tax rates may vary dependent upon location, region, residency, and salary progression issues. For exact details contact your professional adviser or email us at silkroad@dezshira.com

Data from the World Bank, CIA Fact Sheet, pertinent local government resources & Dezan Shra Business Intelligence Unit.

Country

Available Workforce (millions of people)

Minimum Wage (USD)

Individual Income Tax Rates (Percentage of salary)

Afghanistan

14.5

779

20

Albania

13.2

234

0-23

Algeria

12.21

170

35

Angola

7.6

67.5

10.5-17

Antigua & Barbuda

0.03

526

0-25

Armenia

13.8

140

20-23

Austria

3.7

1,289

0-55

Azerbaijan

5.07

146

14-25

Bahrain

1.0

none

zero

Bangladesh

69.7

19-95

0-30

Barbados

0.15

542

12.5-33.5

Belarus

4.97

171

13

Benin

4.86

69

0-35

Bhutan

0.38

58

25

Bolivia

5.42

307

13

Bosnia & Herzegovina

1.3

233

10

Brunei

0.21

none

zero

Bulgaria

3.28

367

10

Burundi

none

30

4.97

Cambodia

9.23

182

20

Cameroon

11.34

62

33

Cape Verde

0.27

141

4

Chad

6.0

110

0-30

Chile

9.53

389

0-35.5

Comoros

0.007

129

0-30

Republic of Congo

31.64

170

20

Cook Islands

0.006

1,206

0-30

Costa Rica

2.17

528

15

C'Ote D'Ivorie

8.5

72

0-10

Croatia

1.79

566

0-36

Cuba

5.3

9

10-50

Cyprus

0.62

1,006

0-35

Czech Republic

5.37

571

15

Djibouti

0.43

none

2-30

Dominica

0.025

256

15-35

Dominican Republic

4.5

166

0-25

Ecuador

8.67

467

0-35

Egypt

31.96

68

0-22.5

El Salvador

2.7

304

0-30

Equatorial Guinea

0.389

224

0-35

Estonia

0.693

634

20

Ethiopia

53.74

18

0-35

Fiji

0.359

269

0-20

Country

Available Workforce (millions of people)

Minimum Wage (USD)

Individual Income Tax Rates (Percentage of salary)

Gabon

0.608

255

0-35

Gambia

0.781

26

0-30

Georgia

2.01

120

20

Ghana

12.84

48

0-30

Greece

5.0

794

22-45

Grenada

0.042

267

0-30

Guinea

4.39

62

0-40

Guyana

0.031

168

0-40

Hong Kong

3.9

773

2-17

Hungary

4.3

587

15

Indonesia

133.56

121-303

5-30

Iran

27.35

133

0-20

Iraq

8.2

214

15

Israel

4.16

1,472

10-47

Italy

23.22

collective bargaining

23-43

Jamaica

0.722

192

0-30

Jordan

1.72

450

5-30

Kazakhstan

9.26

78

10

Kenya

21.19

62

30

Kuwait

2.43

216

zero

Kyrgyzstan

2.65

14

10

Laos

3.80

100

0-24

Latvia

1.0

507

20-31.4

Lebanon

2.41

466

2-25

Lesotho

1.0

102

20-30

Liberia

1.64

114

15-25

Libya

2.31

325

5-10

Lithuania

1.6

716

15-20

Luxembourg

0.28

2,443

8-42

Madagascar

9.5

39

0-23

Malaysia

15.28

224

0-30

Maldives

0.278

242

0-15

Mali

6.45

57

3-30

Malta

918

35

0.156

Mauritania

0.879

84

15-30

Macau

0.39

640

12

Micronesia

0.016

424

10

Moldova

1.24

50

12

Mongolia

1.27

155

20

Montenegro

0.60

215

9-11

Morocco

12.04

310

0-34

Mozambique

6.92

51

0-32

Myanmar

24.74

63

30-35

Country

Available Workforce (millions of people)

Minimum Wage (USD)

Individual Income Tax Rates (Percentage of salary)

Namibia

0.963

collective bargaining

0-37

Nepal

10.35

129

1-36

New Zealand

2.50

2,175

10.5-33

Niger

9.20

60

1-35

Nigeria

62.447

58

7-24

Niue

0.006

none

10-35

North Macedonia

1.0

306

10-18

Oman

1.6

592

15

Pakistan

1

0-35

57.2

Palestine

1.0

403

5-15

Panama

1.49

318

0-25

Papua New Guinea

3.19

191

0-42

Peru

10.58

294

15-30

Philippines

45.4

230

0-35

Poland

18.18

688

18-32

Portugal

5.6

708

14.5-48

Qatar

2.12

none

zero

Romania

9.16

522

16

Russia

76.3

195

13

Rwanda

6.34

17

0-30

Samoa

0.038

137

0-27

Saudi Arabia

12.92

none

0-20

Senegal

4.32

55

0-40

Serbia

3.16

274

10

Seychelles

0.047

339

15

Sierra Leone

2.68

57

0-35

Singapore

3.74

none

0-22

Slovakia

2.74

613

19-25

Slovenia

1.02

887

16-50

Solomon Islands

0.286

79

11-40

Somalia

3.84

none

10

South Africa

23.1

293

18-45

South Sudan

4.72

none

0-15

South Korea

28.44

1,578

0-42

Sri Lanka

8.64

71

4-24

Sudan

12.06

70

0-15

Suriname

0.210

180

38

Syria

4.79

176

5-22

Country

Available Workforce (millions of people)

Minimum Wage (USD)

Individual Income Tax Rates (Percentage of salary)

Tajikistan

3.4

31

13

Tanzania

23.51

17

0-30

Thailand

38.91

253

0-25

Timor-Leste

0.314

115

10

Togo

3.69

70

0-35

Tonga

0.405

none

0-25

Trinidad & Tobago

0.669

354

25-30

Tunisia

4.10

120

0-35

Turkey

28.169

498

15-35

Turkmenistan

2.67

156

10

Uganda

16.83

35

0-40

Ukraine

20.03

200

0-18

United Arab Emirates

0.006

none

zero

Uruguay

1.64

436

0-36

Uzbekistan

15.55

35

12

Vanuatu

0.129

323

none

Venezuela

12.85

4

6-34

Vietnam

53.7

127

20-35

Yemen

6.81

100

10-20

Zambia

7.46

81

0-37.5

Zimbabwe

7.08

227

0-45

As can be seen, China has covered a lot of bases in its Belt & Road Initiative spread. At present most, but not all of the Belt & Road infrastructure projects being built use exported Chinese labor and construction workers. This is because they can be provided on a project basis, have their wages paid by the contractual terms to the relevant Chinese SOE in foreign currency yet be paid by their employer back in China, alleviating the need for any localized individual calculations on a workforce base that often numbers into thousands. Additionally, Chinese workers are relatively well disciplined.

However, at the same time, Chinese contractors has been building relations with managers, local contractors and partnering businesses, who have access to domestic labor forces. In future years, China will be able to utilize offshore, low cost labor to facilitate trade and production at far lower cost levels than may be achievable back in the PRC. This development of a relationship with employers of workforces that themselves run to 1.4 billion in total, and the increasing influence China will have over them is a major asset for China plc and the on-going ability for it to reach its trade and supply chain needs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.