Wednesday, April 5, 2017

The Day I Did My Taxes


It had been over a decade since I last filed my taxes. But no longer can I be labelled as a tax evader – as of today I am a law-abiding citizen. My justification for not doing them was that I was living outside the U.S. (yep, it’s been ten years now!) and in a legal grey area. I have been worried though, as to whether this would hold up or not.  

There are exactly two reasons that I finally broke my streak and did my taxes this year:

The first reason is fear. I was and still am afraid that the U.S. government will revoke my passport, that I will have to go on the run from the IRS, jumping from one country to another on fake identification. This is an unlikely scenario, but at the very least I would be forced to pay some backed taxes and a hefty fee, right? Honestly, I have no idea. It’s fear of the unknown. 

The second reason is curiosity. I wanted to see what the whole process was like. I’ve heard that doing your taxes can actually save you money depending on what deductions you get.

So last month I spent several hours on the IRS website, downloading and filling out forms, inputting my figures and finally came out with some god-awful sum to pay.

I then buckled and signed up for TurboTax. It cost $80 to relieve the headache. My total paid to the IRS: $11.

I also of course get the 1040 form filled out so that I can replicate it next time and do it on my own. 
I had two forms from two different investment banks showing how much tax I owed on stocks and brokerages. I did not have a W-2 because I don’t receive one working in a foreign country.

I think the key to making it work is having your deductions (line 40) be more than your adjusted gross income (line 38). I was being taxed heavily on ‘ordinary dividends’, so in 2017 I’m going to try to reduce that part of my portfolio.

I didn't see any mention of the Foreign Earned Income Exclusion, though it's certainly worth looking into if I do declare income in China (I didn't this time since I had no W-2 form).


Saturday, March 4, 2017

How to Send Money Home from China

Where patience goes to die
Part of reaching baller status is building up a big fat cushion of money.  To do that I need to send a hefty portion of my income back home. I do my banking through Bank of China (BOC). The waiting time is abysmal and the processing speed of transactions is just as forehead-smackingly slow. But from what I hear all banks are like this, so I'm sticking with BOC.

In order to invest some of the money that I'm earning I need to send it to a bank in the U.S. I invest with Vanguard and cannot send either USD or CNY to them directly, so the process I use is this:

1. Visit the BOC in person, usually on a weekend morning (yep, they're open Saturdays and Sundays so they're not all bad) with the following documents ready:
  • Passport (make sure it's the one you registered the account with)
  • Bank card
  • Employment contract (make sure it is the most up-to-date version)
  • Work permit
  • Tax receipt (I request the HR department of my company to provide this each month. The heading of the document looks like the screenshot to the right. It lets the government know that taxes have been paid on your received income.)
  • Tax Receipt Heading
  • Information on where to send the money. This includes the bank name, address and phone number, account number and routing number. In my case I used a checking account I've had for years with my credit union in the U.S.  Note: After the first remittance you can just bring one of the carbon copy receipts that they give you - this has all the information about the bank written conveniently for the teller.  
2. When I get to the teller window, they'll ask for all the items listed above. The first process is transferring the RMB that I've been paid in to USD. They will calculate the amount I can transfer by the tax receipt and my contract. I usually have them transfer all of it, which typically comes out to just over 2,100 USD per month. Full disclosure: This is not all of my salary. I believe the government wants to make sure I have enough to live on as well. I'm fine with this number, since it's about as much as I'm able to send back. If I earned more, perhaps I could send back more, but I'd have to check to make sure.  

3. After the RMB has been converted to USD, they will send the money. During this process I'll need to input my PIN number and signed my name several times and many paper copies will be made. Two fees will be charged: 150 RMB and 50 RMB - my guess is that one is for the exchange and the other is for the remittance. So far this has been a flat fee for me.

4. The money will appear in my credit union account several days later and I'll invest it in a Vanguard index fund. Boo yeah!

I've been going through this process for almost a year now every month or two. I have also heard that Alipay can do the process for cheaper (only a 50 RMB fee) and without having to visit the bank. I can't confirm this, but I think it's worth looking into.

If you're working off the books, this probably won't work very well as you won't be able to offer a tax receipt, so you'd need to find a work-around.

Friday, December 11, 2015

Living Cheaply in Shanghai

I just read that Shanghai “won” the top spot on the list of Most Expensive Asian Cities for Expats.  I’m always a little suspicious of these rankings, as they are influenced by many dependent variables. 

Regardless, Shanghai is not a cheap city.  Rent in my small one-room apartment in Changning district costs me 3,700 RMB, about 600 USD (ouch).  A beer at a fancy bar can cost 8 bucks, liquor drinks even more.

But how much you’re spending probably depends on what kind of expat you are.  Those who come from Europe or the U.S. under the auspices of a robust company package may differ quite a bit from someone coming from, say, Southeast Asia to work in the sex industry. 

It’s easy for people to come to Shanghai and want the upper-class, high rolling, jet-setting expat lifestyle that accompanies the city so well, despite not having the job and salary to back it up.

I came to Shanghai on my own and started out as many do, learning Chinese.  Studying at a Chinese language school is a good way to enter the country because it gives you several things: 1) a student visa, 2) a network of people in similar situations, 3) Chinese language skills.  I figured I could build up from there, teaching English on the side for revenue.  But I was lured out each night by the city lights.  A nice dinner here, drinks at a bar here, and eventually I started to realize that I was spending a hefty chunk of my cash on going out. 

For the last six months I’ve been trying to optimize my spending.  For one month I tracked every yuan I spent, categorized it, and added it up.  I realized I spend just over 6,000 RMB per month.  Not bad.    

It turns out that a large chunk of my money is going towards food and drink.  This particular month I had to pay for a visa processing fee, so an extra 400 went to the Admin section.

There are plenty of ways to save money.  I go out less frequently and when I do, I choose places I know have good happy hours and/or are cheap, and do pre-gaming and BYOB (that $8 beer costs 50 cents at a supermarket) when necessary.  I could probably find cheaper rents in a different part of the city, and I optimized my cell phone plan.  I’m also moving into a more expensive place by myself (I like my privacy) and have found a new job that pays more (moving on up!). 

It’s worth noting that my average monthly expenses were only slightly less than the average salary in Shanghai (7,214 RMB according toChina Daily).  So if locals can still save money on that salary, I know I can too.  

Tuesday, October 13, 2015

How to Get a Free Master’s Degree in China

A few days ago I came to the stark and utterly obvious realization that all of my time here in Shanghai has orbited around one central institution: Jiao Tong University.  Currently I am teaching test preparation on Jiao Tong’s Qibao campus, about six stops away from where I live.  Before I even arrived in China I had registered at the university’s language school on Xuhui campus (the main school), which offers six month or one year visas and aims to inculcate learners with the valuable skills they need to order food in restaurants.  Nine months after enrolling, I stumbled across a classroom holding a small Q-A session on a master’s program, where a professor handed me a brochure.  Still unsure of my next move, I thought “What the hell, let’s give it a shot.” 

What is it?   

That's me up there, defending my thesis proposal
The program I enrolled in was on China’s Political Economy.  Courses such as Urban Development, Foreign Policy, Economic Policy, Chinese Outward Investment and Energy in China were on offer.  I found a few students who had enrolled the year before as well as some of the school’s professors and hit them up for information.  Courses were offered in both English and Chinese.  I had a very helpful program coordinator named Jingjing who guided me through the application process, waiving the application fee. 

I can only speak to the program that I took, but as I understand many universities in China have similar MA programs taught fully in English with scholarships available.

This is the school’s website:   http://www.cpe.sjtu.edu.cn/index.php

How is it free?

This program needs participants.  The Chinese government, in an effort to boost the quality of its university programs and perhaps both attract foreign students and dissuade native students from seeking education overseas, offers scholarships to students from abroad.  Blatant discrimination: 10 “special scholarships” were reserved for American students, part of a US-China cooperation agreement.  I was one of them. 

The scholarship:

There were two full scholarships available, one from the Shanghai government and another from the Chinese central government.  My scholarship included:

·         Tuition for 2 – 2.5 years.  if I hadn’t graduated within 2.5 years, the scholarship would’ve ended, leaving me to foot the bill.
·         Free student housing.  I already had a place where I lived, so I just rented it out.  I didn’t go so far as to list it on Airbnb, but in retrospect I probably should’ve milked that room for all it was worth. 
·         A living stipend.  When I first started the program it was 1,700 RMB per month.  That’s not much in Shanghai, but you could live off it if you ate at the cafeteria and never went to a bar.  I believe it increased during my time there.   

The program:

The first year was focused on taking classes.  Some were better than others, and the quality of the lessons, fairness of the teacher’s grading policy and interactivity of the classes varied significantly.  I was happy with most of the courses, but disappointed with some.  As a student, however, you can audit any class you like and I was free to take classes from the economics college and law school in addition to our school (School of International Public Affairs).  If I had had the inclination to travel all the way to Minhang campus I could’ve sat in on all kinds of courses, from mechanical engineering to philosophy.    

The second year was quite free, too free in my opinion.  We had to finish a thesis, but I felt that one year was far too long for that: three months would’ve been enough as our requirements were not very strict.  I devoted about a third of my time to working, a third to writing my thesis and a third to traveling. 

Takeaway points:
  • If I had come into the program expecting a well-organized, quality-focused MA program, then I would’ve been disappointed.  Rather, I used the program as a tool to better understand China and launch my career (whatever that is).  I also really didn’t have anything better to do at the time. 
  • Even with some classes requiring lots of coursework, there is still plenty of downtime, especially in the second year.  Some students just chilled, happy to live off the small stipend and work slowly on the thesis.  Most found something else to get into though, whether was starting a business, working part-time, traveling, etc. 
  • I can’t speak to whether or not this degree will be useful.  If I pursue a career in education then it most likely will; if I start a business, maybe it won’t.  At any rate, I’m certainly happy with the unique insights I’ve gained and the great people I’ve met.  


Monday, September 14, 2015

How to Sneak into Moganshan

I’d had Moganshan in the back of my head for a while, and finally got to check it out by the end of the summer.  Me being a frugal kind of guy, I naturally wanted to enjoy the area while spending as little as possible.  Unfortunately, I didn’t find much information on the internet about how to get the most out of my trip.  The Wikitravels page is pretty curt, and a useless TimeOut Shanghai post on how to “do Moganshan on the cheap” only offered ideas like not staying at Naked Retreats.  Here’s how to do it like a badass:

DaTang Farm Stay:  Pretty much exactly like the picture on Ctrip.
1.   Book train tickets.  We went from Shanghai Hongqiao Station to Deqing Station directly.  It takes about 2-3 hours and costs 93 RMB. 

The view from our roof.
2.  Book a place to stay.  Our group booked three rooms for five people at DaTang Farm Stay in the quaint town of HouWu (后坞).  My girlfriend and I stayed in the more expensive room (hard but comfy beds, wifi, TV and a bathroom) and spent 460 RMB for two nights, reserved via Ctrip and paid for in cash at check-out.  We paid extra for two breakfasts (50 RMB for a hefty five-person morning meal), a great dinner and a pickup and drop-off at Deqing train station.  HouWu has tons of other places to stay, but I can vouch for the Tang family's spot.  

Red M's guide the way up the trail.
3.  Sneak into Moganshan.  Entrance tickets cost 80 RMB a pop.  Nature should be free, so no thanks.  Instead our host showed us how to go in the back way.  We hiked along a trail at the base of the mountain, following the red “M” signs.  They start by the tree of love, which you can get to if you walk up the hill past DaTang Farm Stay After an hour we found ourselves on more developed trails which indicated that we were in the park.  Paved roads crisscross with dirt paths inside the park.  We only saw one spot that was checking tickets, and it was the entrance to an attraction flooded by tourists.  Not the kind of place we wanted to be anyway.

We got a ride to the reservoir, swam there, then walked back to HouWu.
4.  Swim.  The second day we visited this awesome reservoir.  A sign said “No Swimming,” but it was most likely a suggestion for people who don’t know how to jump into water without drowning.  The water was perfect, tinted turquoise from the limestone.  

I admit, you could probably do it cheaper still if not absolutely free by hitchhiking and camping instead of riding trains and sleeping in beds.  But things being what they were, we were happy to do it all for less than 600 RMB a person. 

Essentials on our packing list were:  Bug spray, a rain jacket and/or hoodie (it gets chilly up there), sneakers or boots for hiking (sneakers were fine, flip flops probably wouldn’t have cut it), decent Chinese skills definitely helped, wine, corkscrew, candles (which can really make a bare room feel romantic) and coffee for the a.m.  

Tuesday, September 8, 2015

Top Five Reasons to Live in China

Guide in China, an official WeChat account that I subscribe to, made a post today called “5 reasons Why Living in China is Totally Awesome”.  Like many others looking for easy reading, I’m a sucker for lists, infographics and any information presented in an easily digestible format.   But before reading, I wanted to think about my own top five reasons.  I had been feeling a bit down about China recently, thinking that this country and Shanghai in particular offered few redeeming qualities.  I came here from Korea three years ago thinking that it was the promised land, that business opportunities lurked behind every corner and that when I stepped foot in this world where the wild-west East meets an ultra-modern cosmopolis, it would create a seismic shift so powerful that it sent a culture shock riveting through my spine. 

I’m not saying that I wasn’t impressed.  Yet I do feel disillusioned.  I feel like I went through many of the same patterns that other Westerners have.  First it was the honeymoon phase, the country boy blinded by the city lights time when I went out four times a week and dreamed of all the future fun and money I would have.  A few months later I hit my depressed stage, where I started missing my life and ex-girlfriend in Korea.  Combine that with a cold, lonely Christmas, high pollution levels and the wearing off of my phase one and it made for a pretty miserable Christmas.  I recovered though, started my master’s program at JiaoTong University, and entered my third and final phase, acceptance.  Since then I have been comfortable here, but would feel like I’m lying if I tell people I love it.  Hence the need for a critical re-think on why I’m here. 

Here are my top five reasons for living in China:

1.  Freedom, Flexibility and Convenience:  This may seem counter-intuitive, given the limitations the government has on information, speech, and daily life.  I despise how China employs an army of censors to make sure that content is in line with the CCP’s “harmonious society”.  Yet there are many things I take for granted.  If there are regulations on drinking a beer on the street or on the university lawn, or for setting up a table on the sidewalk to serve shaokao, they are ignored or easily dodged.  Here you can create your own job, wiggle your way into an industry or start a business with relatively little red tape.  There are wet-markets, fruit stores, bars and restaurants for all budgets just a few minutes away from my house.  This sort of flexibility and convenience simply doesn’t exist in my country, where there is often just one way to do things.

2.  Transportation:  I can get anywhere by metro or bus, and the systems are quick, efficient and for the most part pretty clean.  But the best part about Shanghai and many other Chinese cities is the bikability.  I rarely take public transportation just because I can get anywhere by using the muscles in my legs to propel me across town.  I often like to race cars, dodging in an out of traffic like a badass while thinking about how awesome it is that I never have to worry about parking, insurance or fuel.  Furthermore my vehicle was free, bequeathed to me by a friend who left Shanghai over a year ago, a fact I’m sure isn’t true for those stuck in traffic in their shiny BMWs.  I get extra points if I put my girlfriend on the back (there are nifty black pegs and a comfy saddle for my passengers). 

3.  Food:  This one might seem counter-intuitive as well, given the food safety scares in China and the high quantity and low quality of oil used in restaurants.  Yet it is completely delicious.  When dining with friends in the U.S. I am always struck by how senseless it is that each member of the party chooses one dish to consume, often without sharing.  “How is your burger?”  “Lovely, thank you, and your fish sandwich?”  “It’s acceptable.”  The reason that Thanksgiving is so awesome is because you get to eat a lot of different yummy foods and drink and talk with your friends.  Chinese style eating has the same features, and it’s usually pretty affordable.  And the hell with that tipping bullshit. 

4.  Opportunity:  China has a lot of problems.  There are state problems that need serious attention like the human rights record or the cookie-cutter education system.  There are social problems like the materialistic culture that spawned from China’s economic success, or how members of the more conservative older generation despise Japanese or put too much pressure on the younger generation to marry, often creating unwanted results for both bride and groom.  There are environmental problems like air and water pollution, a growing responsibility for GHG emissions and food safety concerns.  Yet all of these problems are looking for solutions.  The more problems we got, the more work we get to do.  As an optimist, I see less problems and more opportunities for change.  

5.  Me:  Happiness is relative.  You can be happy no matter where you are, you adjust to your surroundings and you make the most of what you have.  I try my best to surround myself with long-term, interesting people who help me to be a better person.  The transient nature of Shanghai makes this a challenge.  But each friend I make seems to have a unique background and plan for the future, so I try to take what I can from these people and apply it to myself. 

Admittedly, some of the things I like about China are simply things that I don’t like about the U.S.  But the re-think works all the same.  

On a side note, I found GuideInChina's "Five Reasons" a little lacking.  


Tuesday, June 16, 2015

My Experience as a Professional Westerner

Recently a mini-documentary called Rent-a-Foreigner was published by The New York Times, which shows typical foreigners living in China attending a promotional event in order to spur sales for a high-end housing development in Chongqing. 

I had known about the value a foreign person had outside their own country since my first time abroad, and had especially understood the power that a white American male could have.  You are can be treated as a guest of honor in homes and an expert in anything subject which comes up in conversation.  Foreign English teachers make several times more than what a local English teacher would make, despite often holding no training on educational methods.  It doesn’t matter; it is only the face that matters. 

It was shortly after the making of this documentary, about two months ago, that I accepted a couple of offers to actually be a “Rent-a-Foreigner.”  Here is my story. 

Jilin City, Jilin Province, China

Pimp hotel room to sleep in ... alone :(
I first met “Karl” at a job fair for foreigners in Shanghai.  He was sitting with a colleague, but no one was visiting his booth.  Most other booths offered positions at schools, multinational companies or were advertising degrees abroad.  I saw a picture of a wind turbine and novella-sized description on a banner by the booth, and sat down to speak with him.  Karl’s English was limited, so he was comfortable when I spoke Chinese to him. 

Karl told me that he was looking for people to help give product introductions.  I am interested in renewable energy technology, so I gave him my contact information.  We exchanged a few emails, and met several weeks later at a coffee shop.  Karl told me the plan:

“We will go to Jilin province and you will give a small presentation to demonstrate the technology.”

He handed me a few sheets of paper with powerpoint slides on them.  They were the most basic slides imaginable, just a few sentences at most about the company, a German firm. 

“We will leave at night, then have two meetings during the day, then return the next day.  We will pay for your meals, hotel and travel, as well as give you a salary.  We can pay double your current salary.” 

I told him my salary was 200 RMB per hour.  After a bit of negotiation, we settled on 4,500 RMB (about $725).  He gave me 1,000 RMB up front, smiling and saying “now we have a deal.” 

A few days later we met at the airport and took a flight to Jilin, a province in the north.  It was still cold there.  Another colleague joined, then a network of dealers.  We ate dinner and Karl explained that I was a marketing director from the company here on business to help sell the product.  They poured me baijiu (白酒- literally white alcohol, but in effect a very strong rice liquor), put interesting food on my plate, and then proceeded to talk business in Chinese.  Karl had specifically instructed me not to let on that I speak Chinese.

It occurred to me that the guanxi (关系 – the relationship culture in China) culture is quite involved.  I always imagined it being just two people having a “you scratch my back I’ll scratch yours” sort of relationship, but it involves multiple people, many drinks and cigarettes and lots of agreement. 

We checked into a five-star hotel.  Chinese style, it had a large, open lobby and one of those giant revolving doors with fake flowers inside, and the room was quite modern. 

The next day we went to meetings at a Chinese power company.  I introduced the company in English to a group of Chinese engineers and Karl translated.  The product we introduced was said to improve efficiency in turbines.  They seemed satisfied.  In the afternoon we went to a different branch of the same company and did the same thing.  Karl was happy.  On the way to the airport he passed me an envelope containing the remainder of the payment. 

The flight back.  It was cancelled and rescheduled for the morning.
Since then I have taken another job as a “Rent-a-Foreigner.”  I visited Nanchang to give a presentation on a landscape design for a hotel.  The routine seems strikingly similar.  Small deposit up front and the rest later either in cash or direct deposit.  Meals, travel expenses and five-star hotel lodging paid for (I believe they stay in the nice spots because they are in sales, and need to project a quality image).  Giving a powerpoint presentation while someone else translates.  Lots of sitting and eating and pretending not to speak Chinese while business is discussed.  Though I haven’t been asked to dress up in traditional garb, I wouldn’t be above it.  If the price is right^^

Yet as I sat there going through the motions, a curiosity tugged at my mind: do the customers know that I am just window dressing?  And if so, do they care?