3 days ago
China Makes Major Social Security Change
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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China's top court is set to ban an informal working arrangement by which employers can skip mandatory social security payments.
Why It Matters
Officials have pledged to strengthen China's weak social safety net as part of broader efforts to rebuild confidence amid a years-long property-sector crisis, in a nation where an estimated 70 percent of household wealth is tied up in real estate.
If widely enforced, the change will rattle China's vast informal economy, and in the short term likely cost many low-income employees work hours or their jobs, and eat into the already thin margins of farmers.
Newsweek reached out to the Chinese Foreign Ministry via email for comment.
What To Know
In an August 1 judicial interpretation, China's Supreme People's Court announced that employment contracts that exclude social-insurance contributions are invalid.
The judges said the decision responds to public concern and hailed it as a step to promote stable employment and support high-quality development.
"We've found a few companies not contributing to social insurance in order to reduce labor costs, with some workers requesting employers to provide the social insurance contributions directly to them as subsidies in order to receive higher wages," said Zhang Yan, a judge in the court's First Civil Division.
She said courts should support employees seeking to terminate informal work contracts or to seek compensation over an employer's failure to make social-security contributions.
Wu Jingli, the division's deputy chief judge, stressed the importance of the social safety net.
"Paying social insurance fees in the long term can help employees manage income disruptions during risks like old age, illness, work-related injuries, childbirth and unemployment, securing their basic living needs," Wu said.
Some netizens on Chinese social media expressed fears they'll be laid off. Others pointed to structural inequalities between urban and rural areas in terms of earning potential and access to quality public services.
An elderly woman walks with the aid of a cane, accompanied by another woman in Chongqing, China, on May 26, 2025.
An elderly woman walks with the aid of a cane, accompanied by another woman in Chongqing, China, on May 26, People Are Saying
One person wrote in a post on the microblogging platform Weibo: "Now, if contributions are cut off, pensions stop. And if the company goes bankrupt and I can't find a job for a one pit after another I'm forced to jump into."
Another Weibo user wrote: "In the short term, paying social-insurance contributions does bring pressure and pain to many businesses, but a short pain is better than a long one."
Another Weibo user wrote: "Good social services also tend to be concentrated in city center people in cite enjoy these conveniences, they really should help improve the rural social-security system."
What Happens Next
The ban takes effect September 1.
