These workers may be placed on standby or offered early-retirement arrangements without their employment contracts being terminated. Since their formal employment status remains unchanged, some may continue to be counted as employed, even though they no longer perform their regular jobs.
The issue raises questions about how well official unemployment figures reflect the experiences of workers facing job cuts, particularly as some Chinese SOEs reduce their workforces.
China’s unemployment rate for people ages 30 to 59 fell from 4.3 percent in March to 3.9 percent in July and August, according to Chinese media The Paper, citing official data. The rate for people ages 16 to 24, excluding students, stood at 18.9 percent over the same period.
According to China’s National Bureau of Statistics, people are generally counted as employed if they work at least one hour during the survey week for pay or profit, or are temporarily absent from a job under qualifying circumstances. To be counted as unemployed, a person must have no job, have actively sought work within the previous three months, and be available to start a suitable job within two weeks.
The distinction matters since losing a regular position does not necessarily mean a worker will immediately be classified as unemployed.
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SOEs Cut Thousands of Jobs
The Epoch Times’ examination of 2023–2025 annual reports from three SOEs—China First Heavy Industries, Bengang Steel Plates and Angang Steel—found different patterns in workforce reductions and reported employee-related costs.
Bengang Steel Plates and Angang Steel, both subsidiaries of the state-owned Angang Group in Liaoning Province, reported a combined reduction of 5,161 employees over three years, a decline of 12.5 percent. Neither company reported costs for severance or employee-placement arrangements in the accounts reviewed.
Bengang’s year-end workforce fell from 14,342 in 2023 to 12,155 in 2025. Angang’s declined from 26,964 to 23,990 over the same period. Both companies have reported losses for three consecutive years.
The workforce reductions were concentrated among production workers and employees with less formal education. Bengang’s production workforce shrank by 1,855, while Angang’s fell by 1,345. At Angang, the number of employees with technical secondary school qualifications declined by 2,111, or 24 percent, while the number of employees with bachelor’s degrees or higher remained nearly unchanged.
The reductions were not accompanied by comparable declines in Angang’s output. From 2023 to 2025, its production of iron, steel and finished steel products fell by roughly 1 percent in each category, based on the figures in the company’s annual reports.
The reports do not establish what happened to each departing employee. Some may have retired or resigned, while others may have left under different arrangements. The absence of reported severance costs does not, by itself, prove that workers were placed on standby or that layoffs were concealed.
Nevertheless, the reports leave unanswered questions about how the companies reduced their workforces without recording corresponding compensation costs.
Severance Costs Tell Part of the Story
China First Heavy Industries showed a different pattern. Its year-end workforce increased slightly, from 8,401 in 2023 to 8,606 in 2025, despite reporting an increase in management expenses relating to employee severance benefits.
The company’s long-term employee compensation liabilities also rose by 50.42 percent during the period examined. The annual reports did not disclose how many workers were covered by the payments or provide enough detail to establish the precise nature of the arrangements.
Under China’s Accounting Standard for Business Enterprises, companies must recognize certain employee termination benefits as expenses and liabilities when the relevant conditions are met. Such benefits can include compensation connected with ending employment and qualifying early-retirement arrangements.
Workers who resign voluntarily or are placed on standby without their employment contracts being terminated may not generate the same compensation obligations. Consequently, a company can reduce its active workforce without necessarily recording conventional severance costs.
Year-end employee totals also show only how many people a company reports having at a particular point in time. They do not reveal how many workers left during the year or whether departing employees were replaced.
Remaining on Payroll Without Regular Jobs
Under standby arrangements, workers can remain formally employed even after leaving their original positions. Their income may be reduced, while employers may still be required to pay social insurance contributions as long as the employment relationship continues.
China’s national rules on wage payments establish general principles for workers temporarily unable to work, while local regulations determine specific protections and payment requirements in relevant circumstances. The amount workers receive can therefore vary by location and arrangement.
The problem of workers retaining formal employment while losing their regular jobs is not new in China. During the SOE restructuring of the late 1990s and early 2000s, the regime published figures on workers laid off while maintaining ties to their former employers. Those figures fell sharply when the reporting system was phased out, and workers were integrated into unemployment insurance.
The Epoch Times review found no comparable published national count in the material examined that would show how many workers today remain formally employed but have been removed from their regular jobs.
The company reports cannot establish the scale of this group nationwide, nor do they prove that all workforce reductions were concealed layoffs. However, they do highlight a limitation of relying on unemployment rates and year-end employee totals alone. Neither necessarily reveals whether workers have retained meaningful employment or their previous income.
Jiang Zuoyi contributed to this report.
