Read an employment contract in China with the right questions
You have a contract on your screen and a decision to make before you sign. This guide gives you a reading order built around the clauses that change your position the most, the points where local practice differs from what you may assume, and the exact questions to send back to the employer. You do not need a legal background to do this. You need a method: read in the right order, flag the clauses that shift risk onto you, and turn each flag into a written question. Read the draft once from top to bottom, then use the check order at the end so nothing slips through.
The written labor contract is the document that sets the terms of your employment. Understanding its points allows you to protect your rights and helps keep your employment terms transparent, fair, and legally sound. That is the core function of the paper in front of you: it is the reference you and the employer return to when something is disputed. What is written carries more weight than what was said in the interview or over email, so the draft deserves a careful read before you add your signature.
Because you may not yet have a colleague or a local friend to ask, the written answers you get back are your main protection in these early days. Treat every answer as something you will need to keep, and store the whole thread in one place.
Start with the contract type
The place to start is the contract type: whether you are being offered a contract with a fixed end date, or an open-ended contract. Under Article 14 of the Labor Contract Law of the People's Republic of China, an open-ended contract is one in which the employer and the employee agree on no definite end time. The employer and employee may conclude one by mutual agreement. The article then lists the situations in which, if the employee proposes or agrees to renew or conclude a contract, an open-ended contract shall be concluded, unless the employee asks for a fixed-term one.
Three of those situations matter when you read your own draft:
- The employee has worked for the employer for ten consecutive years.
- The employee has worked for the employer for ten consecutive years and is fewer than ten years from the legal retirement age, where the employer is introducing a labor contract system for the first time or re-concluding contracts as part of a state-owned enterprise restructuring.
- Two consecutive fixed-term contracts have been concluded, the employee has none of the conduct described in Articles 39 and 40(1) and 40(2), and the contract is being renewed.
The third is the one that usually applies to someone already on a second contract, so read its shape exactly. Where two consecutive fixed-term contracts have been concluded and the employee has none of the conduct set out in Articles 39 and 40(1) and 40(2), then at renewal — if the employee proposes or agrees to renew or conclude a contract — the employer shall conclude an open-ended contract, unless the employee asks for a fixed-term contract instead. Article 39 lists the conduct for which the employer may terminate, including being proved during probation not to meet the recruitment conditions, serious violation of the employer's rules, and serious dereliction of duty causing major damage. Article 40(1) and 40(2) are the grounds of being unable to do the original or reassigned work after the medical period ends, and being unable to do the job after training or reassignment — grounds the employer may use with thirty days' written notice or one extra month's pay. Under Article 14, the absence of those grounds is part of the condition for the open-ended obligation: Labor Contract Law of the People's Republic of China.
This is a statutory duty to conclude, not a request the employer is free to grant or refuse. The Supreme People's Court has published an answer on exactly this question in the Supreme People's Court FAQ digest. Its position: once the conditions for concluding an open-ended contract under Article 14 are met, the employee's right to renew on that basis should be protected, and if the employer refuses to renew, the employer bears the consequences set out in Article 48 — if the employee asks for continued performance, the employer shall continue performance; if the employee does not ask for that, or the contract can no longer be performed, the employer pays compensation under Article 87, at twice the economic compensation standard in Article 47. The same answer adds that where the employee keeps working for the employer after two fixed-term contracts have expired, the employer raises no objection, but no open-ended contract is concluded, the employee's claim for the double-wage differential should be supported.
There is a third layer you will meet if you look at official guidance written for foreign residents. The Shanghai International Service Portal page "What you need to know before signing a labor contract in China" states the rule in stronger terms than the statute does: it says that once two consecutive fixed-term contracts have been signed, the employer is prohibited from entering into another fixed-term contract or terminating the employment relationship, and is obligated to comply if the employee requests or agrees to renew or sign an open-ended contract. It also describes the trigger as the third consecutive signing and the condition as the employee not having violated any provision of the Labor Contract Law — a broader condition than the statute's specific list of Articles 39 and 40(1) and 40(2).
Keep those three layers separate rather than flattening them into one slogan. The statute gives a duty to conclude an open-ended contract when its conditions are met. The court's published answer says the employee's renewal right should be protected and sets out what follows if the employer refuses. The portal page states the point in stronger and broader language. What the statute itself does not do is make an open-ended contract impossible to end: it has no fixed expiry date, but it can still end on the lawful grounds the law provides — including the Article 39 and Article 40 grounds — or by agreement between the two sides. So the accurate statement is neither "an open-ended contract can never be terminated" nor "the employee may merely ask."
What the rule is, restated precisely: it is a statutory condition under which the employer shall conclude an open-ended contract, and it is premised on a renewal point and on your own record being free of the conduct described in Articles 39 and 40(1) and 40(2). Both parts are things you can check yourself before you sign: count your consecutive fixed-term contracts with this employer, and check whether any of those grounds could be said to apply to you. If either is unclear in your case, ask the employer to confirm the position in writing, and check it against the national 12333 hotline, your local human resources and social security bureau, or a qualified labor lawyer — this guide cannot decide it for you.
What this means in practice: if the draft is still written as a plain fixed-term contract while you are already on a second consecutive contract with the same employer, that is a point to raise rather than accept. Treat the contract type as a live question and count your consecutive contracts before you read further, because that count changes how the rest of the document should read. Labor rules are subject to revision and local practice can differ by city and employer type, so confirm against the official text that is in force when you sign.
Confirm when the written contract must exist
The next check is timing. The Shanghai portal page states the baseline rule: a written contract must be signed within one month of the employee's first working day, regardless of any probationary period. Two distinct consequences follow if that does not happen, and they are worth keeping apart.
The first is the wage consequence. If the employer fails to sign a written contract within one month but not more than one year from the start date of employment, the employer must pay the employee double the monthly wage for each month missed. The same rule appears in Article 82 of the Labor Contract Law of the People's Republic of China, which also provides that where an employer, in violation of the law, does not conclude an open-ended contract with the employee, it shall pay double the monthly wage from the date the open-ended contract should have been concluded.
The second is a different consequence entirely: if the employer has not concluded a written contract after one year from the day work began, it is deemed that an open-ended contract has been concluded. That deeming rule sits in Article 14 itself, separately from the duty to conclude described above — Labor Contract Law of the People's Republic of China. It is a status that arises by operation of the article; it is not the same thing as the employer choosing to offer you an open-ended contract at renewal.
Read the first rule as a range, not a single date: the wage consequence attaches where the written contract is missing for a period beginning after one month and running up to one year from your first day. The practical takeaway is the same in both cases — the written contract should be in your hands and signed before, or very close to, your start date. If your employer suggests you begin work and "sort the paper later," that delay is not neutral for you. It shifts risk onto the one document that defines your terms, and after enough time it can change the type of contract you are treated as having.
Read probation, service-period and confidentiality as questions
Your contract may include sections on probation, a service period after training, and confidentiality. The material behind this article does not state what the law requires in those sections, so this guide will not invent a fixed rule for them. Instead, treat them as items to verify in writing before you sign. The Shanghai portal also publishes "Practical guide to probationary periods in Shanghai", which is the page to read for probation-specific rules.
For each one, send a question back rather than assuming the answer. Ask what the probation length and exit conditions are, and whether probation pay and notice differ from the regular employment period. Ask whether probation can be extended and under what stated condition. Ask whether any service-period clause binds you after the employer pays for training, and what the stated consequence is if you leave. Ask what confidentiality covers, for how long, and whether it continues after the contract ends. Keep the answers in writing; a clause you did not fully understand at signing is still a clause you accepted.
The aim is not to refuse these clauses — many are ordinary — but to make sure each is specific and that you can actually meet it. If a section is left blank, or says "as per company policy" without attaching that policy, ask for the policy before you sign. A blank or cross-referenced clause is a question, not an answer.
What happens at the end of the contract
Two endings are worth separating. The ordinary ending is expiry of a fixed term: the contract reaches the date written into it, and the contract-type question above returns, so you count your consecutive contracts again.
The protected ending is the Article 14 situation. Where two consecutive fixed-term contracts have been concluded, the employee has none of the conduct described in Articles 39 and 40(1) and 40(2), and a renewal is on the table, the employer shall conclude an open-ended contract unless the employee asks for a fixed-term one. If the employer instead refuses to renew, the published court answer says the consequences in Article 48 follow: continued performance if the employee asks for it, and otherwise compensation under Article 87 — the Supreme People's Court FAQ digest. And if you keep working after the second fixed term expires with the employer raising no objection, but no open-ended contract is concluded, the same answer says your claim for the double-wage differential should be supported.
An open-ended contract still has no fixed expiry date; what it removes is the automatic end by expiry. It can still end on the lawful grounds the law provides or by agreement. If you are already on a second consecutive contract, the end-of-contract language in your draft should reflect that a renewal is not simply another fixed term by default.
Ask the employer to confirm in writing how the current contract interacts with any prior consecutive contracts you have signed with them. This is where a small wording change can mean a large difference in your position, so do not leave it implied or assume it will be handled later.
Check order and question table
Use this order when you read the draft, and use the table to turn each clause area into a concrete question.
- Identify the contract type and count your consecutive contracts with this employer.
- Confirm a written contract will be signed before or at your start date, not "later."
- Read probation, service-period and confidentiality as items to verify, not accept.
- Check the end-of-contract language against your consecutive-contract count.
- Send your open questions back in writing and wait for answers before signing.
| Clause area | What to verify before signing | Question to send back |
|---|---|---|
| Contract type | Whether it is fixed-term, and how many consecutive contracts you have already signed with this employer | "Is this a fixed-term contract, and how does it relate to my previous consecutive contracts with the company?" |
| Written contract timing | That a signed written contract will exist at or near your start date | "By what date will the signed written contract be in place relative to my start date?" |
| Probation | Length, pay and exit conditions stated in writing | "What are the probation length, pay and exit conditions?" |
| Service period or training | Any clause binding you after employer-funded training, and its stated consequence | "Is there a service-period or training-recovery clause, and what is its stated consequence?" |
| Confidentiality | Scope and duration, including whether it continues after the contract ends | "What is the scope and duration of the confidentiality clause?" |
| End of contract | Language matches your consecutive-contract count | "How does the end-of-contract language interact with my prior consecutive contracts?" |
A message you can send back
Below is a fictional example of the kind of message you might send. It is written for demonstration only; it does not correspond to any real employer and is not a sample of Chinese market practice. Replace the brackets with your own details.
Subject: Questions on the employment contract draft for [your name]
Thank you for the draft. Before I sign, could you confirm in writing: (1) the contract type and how it relates to my previous consecutive contracts with the company; (2) the date by which the signed written contract will be in place relative to my start date; (3) the probation length, pay and exit conditions; (4) any service-period or training-recovery clause and its stated consequence; and (5) the scope and duration of the confidentiality clause. Please attach any company policy the contract refers to.
Send this as one message and keep the reply. A written answer is part of your record; an answer given only in a call is not something you can return to later, and you may not have a colleague to ask once you are inside the role.
The contract you sign is the terms you agreed to, not the terms you discussed. Read for the clauses that change your position, send your questions back in writing, and sign only once the answers are in front of you.
Sources
- The statute behind the contract-type, timing and termination rules discussed above: Labor Contract Law of the People's Republic of China, published by the Shanghai Municipal Human Resources and Social Security Bureau.
- The judicial position on renewal after two consecutive fixed-term contracts: the Supreme People's Court FAQ digest.
- Guidance written for foreign residents in Shanghai: "What you need to know before signing a labor contract in China" and "Practical guide to probationary periods in Shanghai".
Rules and local application can change, so treat these pages as the live version and confirm against the official text in force at the point you sign. For anything that turns on your own situation, the national 12333 human-resources hotline and your local human resources and social security bureau are the channels to check, and a qualified labor lawyer is the right adviser for a personal dispute.