Recently, the Ministry of Human Resources and Social Security of the Chinese Communist Party (CCP) announced a new initiative called “Finding People with Data” to mobilize those who are not insured to pay for social security. The taxation department will also impose heavy penalties on those who have not paid their social security starting from November 1. Many interviewees have expressed concerns over their inability to afford these payments. Experts have raised issues such as unfair distribution of social benefits and warned that increased enforcement may further squeeze both enterprises and households.
The State Council Information Office of the CCP held a press conference on October 10, where Vice Minister of Human Resources and Social Security Li Zhong announced the number of insured individuals for basic old-age, unemployment, and work-related injury insurance in China. Li Zhong stated that the next step would involve using “Finding People with Data” and other methods to identify and mobilize those who are not yet insured to participate.
Furthermore, the CCP plans to expand the pilot program for occupational injury insurance for new employment categories and further extend the coverage of unemployment insurance. Simultaneously, penalties will be escalated.
According to the “National Taxation Administrative Penalty Discretion Standards (2026 Edition)” issued by the State Administration of Taxation of the CCP on September 28, starting from November 1, social security contributions will officially be included in the national unified taxation administrative punishment system.
Employers who fail to make up for overdue social security contributions will face three levels of fines, with the highest being a fine of three times the amount owed. The more outstanding the contributions and the higher the percentage of the required payment, the heavier the penalty will be.
The above-mentioned measures have sparked controversy. Many uninsured individuals have taken to the internet to express their frustrations, with videos circulating where they question how they can pay when they can barely afford to eat.
A number of individuals from various regions in mainland China, including Shandong, Shanxi, Guangdong, Anhui, and Jiangsu, shared their views on the authorities’ policies. Some are unemployed, some are self-employed, and others are employed by enterprises. They have all expressed their concerns regarding the recent policy developments.
Xu Mingda, born in 1991 and from Linyi, Shandong, voiced his objections to the policy of mobilizing uninsured individuals to pay for social security. He emphasized his financial struggles due to a downturn in his past employment in the advertising industry and his current unemployment status. Despite compulsory payment requirements, he adamantly declared that he would not comply.
Xu Mingda criticized the government for potentially diverting the social security funds to provide high retirement pensions to retired officials, highlighting the disparity in treatment between the general public and privileged retirees. He expressed skepticism about relying on the government for future retirement benefits, emphasizing the importance of prioritizing present needs over distant retirement concerns.
Chen Yuhang, a resident of Datong, Shanxi, raised concerns about the impact of social security contributions on ordinary families. He predicted that increased enforcement could lead to situations where children are not allowed to attend school if their parents fail to pay social security.
Regarding the recent social security payment policy enacted by the authorities, he expressed dissatisfaction, emphasizing the insensitivity towards the current survival challenges of young people while focusing on long-term retirement issues, which he perceived as benefiting the privileged retirement beneficiaries.
He questioned the feasibility of receiving sufficient retirement benefits in the future, expressing doubts about whether average citizens like himself would be able to access these benefits when they reach retirement age. Chen Yuhang advocated for prioritizing present well-being and self-sufficiency rather than being subject to the disparities in the social security system.
He emphasized that living well in the present is essential, opting to focus on maintaining a healthy lifestyle and financial stability rather than being exploited for the benefit of retired officials.
He Wenxin, born in 1995, a self-employed individual operating a restaurant in Sanshui District, Foshan City, Guangdong, shared her struggles with increasing social security payments. Despite having paid social security contributions for 74 months through a relative’s company, she faced financial burdens due to continuous payment hikes.
She expressed lament over the rising costs of social security, stating that the monthly payment had increased from 1,528 yuan to 1,707 yuan starting in October. Uncertain about her ability to sustain the business in the face of escalating costs, she contemplated discontinuing her operations after the Chinese New Year.
She also shared her losses in the real estate sector, pointing out the significant decline in property values. She lamented buying a property for 12,000 yuan per square meter, which she estimated could only be sold for 6,000 yuan per square meter now.
Lin Yongxiang, working in Shenzhen, reflected on his dilemma of paying social security for 11 years and facing rising contribution amounts. The increased financial burden made him question the sustainability of continuing to bear such costs given his limited income.
He raised concerns about the impact of rising social security payments on ordinary individuals and small business owners, emphasizing the strain on daily expenses and the diminishing financial resources available for daily living.
He Haoxian, a resident of Foshan, Guangdong, who had been paying social security contributions for 10 years, expressed his decision to cease payments after transitioning to freelance work the following year. He rejected the idea of making retroactive payments and questioned the enforcement mechanisms against individuals who default on social security contributions.
Xu Jiarun, based in Linyi, Shandong, shared the challenges faced by insured individuals due to yearly adjustments in social security payment bases. She expressed the financial difficulties in meeting these payment demands, as her earnings were insufficient, requiring her husband to support her financially in making these payments.
Wu Cuixia, a resident of Chizhou, Anhui, discussed the impact of increased social security costs on her financial well-being, highlighting the burden of needing to pay the difference in social security contributions for the period from January to September.
Shen Mingyuan, a company employee from Suzhou, Jiangsu, echoed similar concerns about the financial strain posed by escalating social security costs and the additional burden of retroactive payments.
Discussing the retroactive payment practice following adjustments to social security contribution bases, economist Davy J. Wong noted the adverse consequences of retrospectively collecting payment differences, equating it to unexpectedly being asked to pay increased rent for previous months in a rental agreement. Wong highlighted the potential impact on cash flow for small and medium-sized enterprises and the heightened financial burden on laborers in the context of unemployment, wage reductions, and stagnant income growth.
Analyzing the intensified efforts in social security collection and penalties by the CCP, Chinese affairs expert Wang He suggested that the authorities may require companies to make up for past inadequate social security contributions along with emphasizing the stringent recovery of back payments, potentially straining financially struggling businesses and leading to closures and subsequent unemployment, exacerbating the challenges of social security contributions.
He pointed out the inadequacies in the current social security system, citing issues of inequitable distribution of benefits and the sustainability of the system as critical concerns. Wang highlighted the significant disparities in benefits among different social groups and the immense financial burden placed on the state to subsidize social security, exacerbated by the prevailing economic challenges.
He estimated that the government’s annual subsidies for social security exceed one trillion yuan ($157 billion) and could have reached 1.5 trillion yuan ($236 billion) last year, indicating a critical financial stress on the authorities. In response to fiscal pressures, the government is adopting various measures to shore up funding sources.
The Supreme People’s Court of the CCP issued a judicial interpretation on August 1, 2025, stipulating the invalidity of agreements excluding social security payments. Employers failing to meet legal payment obligations could face termination of contracts by workers and financial compensation claims, while defaulting on social security payments would require retroactive payment and might incur late fees.
Wong criticized the selective enforcement approach of the CCP, highlighting the challenges individuals face in attempting to evade even minimal social security or tax payments.
He emphasized that the stringent collection of social security payments could deepen public mistrust in the government. As businesses and individuals face heightened financial pressures, consumer spending could decline, exacerbating the strain on domestic demand.
(The interviewees, Xu Mingda, Chen Yuhang, He Wanting, Lin Yongxiang, He Haoxian, Xu Jiarun, Wu Cuixia, and Shen Mingyuan, are all using pseudonyms.)