How China’s Social Insurance Crackdown Could Devastate Businesses: ExpertsHow China’s Social Insurance Crackdown Could Devastate Businesses: Experts
Employees make mooncakes at a food factory ahead of the Mid-Autumn Festival in Taizhou, Jiangsu Province, China, on Sept. 8, 2024. Stringer/AFP via Getty Images
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How China’s Social Insurance Crackdown Could Devastate Businesses: Experts

Beijing’s enforcement of social security contributions raises labor costs, potentially forcing small companies to cut staff or even shut down.
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By Sean Tseng
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In Shanghai’s Putuo District, a community restaurant recently posted a Help Wanted sign on its door, encouraging men aged 60 and older and women aged 55 and older to apply for a job with “generous pay.” Younger people need not apply, it states.

The ad highlights a significant transformation taking place in Chinese cities that could negatively affect businesses. Chinese authorities say that, starting on Sept. 1, they will fully enforce long-standing social insurance contribution rules, wiping out a gray zone that allows many employers to evade payments and employees to opt out.

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