China’s top private firms cut jobs, await greater support to allay anxieties

All-China Federation of Industry and Commerce report shows China’s top 500 private enterprises cut 314,600 jobs in 2023 compared to a year earlier

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The private economy contributes more than half of China’s tax revenues, over 60 per cent of the national gross domestic product and also employs more than 80 per cent of urban workers. Photo: NurPhoto via Getty Images

Published: 9:00am, 15 Oct 2024Updated: 10:54am, 15 Oct 2024

China’s leading private firms slashed their workforce last year despite a slight growth in financial performance, according to a report published by the country’s largest business association for the key group.

The 500 private enterprises, which often have stronger risk-resistance capabilities, employed 10.66 million people in 2023, the semi-official All-China Federation of Industry and Commerce said on Saturday, a reduction of 314,600 jobs compared to a year earlier.

The cuts have raised concerns over how private businesses are affected by the ongoing domestic economic slowdown, and have indicated the necessity for further government support, especially after Beijing rolled out a new draft law to help revive the private economy on Thursday, analysts said.

“The fact employment fell despite revenues rising highlights the uncertainty facing firms,” said Harry Murphy Cruise, an economist at Moody’s Analytics.

“Increased automation and a push to lift efficiency in highly competitive markets could also be a factor,” he added, noting that most of the firms surveyed are in manufacturing.

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The number of manufacturing firms, a traditionally labour-intensive industry, accounted for 66.4 per cent, or 332 of the total, up from 322 last year.