China’s Hidden Joblessness: When Workers Remain Employed on Paper but Lose Their Jobs in Practice

China’s official unemployment figures may be missing an important dimension of labour-market distress – workers who have lost their regular jobs but remain formally employed. Annual reports of some state-owned enterprises (SOEs) point to workforce reductions that raise questions about what happens to employees who disappear from company headcounts and whether conventional unemployment statistics adequately capture the resulting economic insecurity.

The central issue is not simply whether China’s unemployment rate is accurate within its statistical definition. It is whether that definition captures the reality of employment in an economy where workers can lose their positions, earnings and career prospects without formally becoming unemployed. When an employment contract survives, but the job itself does not, the distinction between being employed and being economically secure becomes blurred.