Case Summary
- China’s Supreme Court reinforced that all attempts to sidestep mandatory social insurance payments are invalid, heightening pressure on struggling employers.
- A Zhonghe Group survey of 6,689 firms shows just 1% were fully compliant with the government’s draconian insurance rules.
- Small business owners warn the ruling will cut jobs, slash wages, and push firms further underground rather than solve China’s looming pension crisis.
BEIJING (USA HERALD) — China’s highest court has reaffirmed that any contract or arrangement designed to avoid the government’s mandatory “social insurance” contributions is invalid. This move, announced in recent weeks, represents Beijing’s latest attempt to prop up its collapsing pension system. Yet far from stabilizing the economy, the policy threatens to devastate already-struggling small businesses and leave workers with fewer opportunities.
Employers across China admit privately that few companies have actually been paying the mandated contributions. Workers told USA Herald that “most” employers are bypassing payments altogether—evidence that Beijing’s decrees are increasingly ignored in the real economy. None of these workers would go on the record by name, citing fear of retaliation, firing, or discipline.
The enforcement push highlights the widening gap between China’s central planners and its people. By criminalizing workarounds and doubling down on compulsion, Beijing may accelerate the very outcomes it claims to prevent: job loss, shuttered businesses, and reduced wages.
