The Chinese Communist Party’s finances are facing serious difficulties. On June 9th, the China Railway Shanghai Engineering Bureau Group was reported to have suspended the distribution of various performance-related salaries and incentives to employees, sparking concerns.
According to a company notice circulated online and released by the China Railway Shanghai Engineering Bureau Group on June 6th, starting from June 1st, 2025, the distribution of various performance-related salaries and incentives to employees of the group and its subsidiaries has been suspended. Only basic salaries and related subsidies that can be distributed according to regulations will be given, including to corporate leaders, non-leadership position holders, regular employees, and management labor dispatch personnel.
For internal retirees and employees waiting to be laid off who do not have a clear distinction between basic salaries and performance-based salaries, a temporary payment of 40% based on the current wage standards will be made.
The notice also explicitly states that if any unit fails to comply with this regulation, the group company will report and criticize the unit, holding responsible individuals accountable.
The financial report released by the Chinese Communist Party’s Ministry of Finance in September 2024 indicated that in the first seven months of 2024, the total national general public budget revenue exceeded 13 trillion yuan, except for a surplus in the Shanghai municipal finance, the remaining thirty provinces and cities all faced deficits. Six ministries, including the Ministry of Finance, also issued restrictions on infrastructure projects.
The notice from the China Railway Shanghai Engineering Bureau sparked heated discussions online.
Some netizens expressed that currently, only Shanghai municipality has a surplus in financial resources among all provinces across the country. Even Shanghai is in such a situation, indicating a grim outlook for the Chinese economy.
An article by a quality content creator on NetEase, Huoshan Shihua, pointed out that this incident is not an isolated case but a reflection of the challenges facing the construction industry.
Huoshan Shihua stated that in recent years, the entire construction industry has been facing significant challenges, with many construction units and design institutes experiencing salary arrears, salary reduction, layoffs, and even many enterprises directly declaring bankruptcy. Now, even large enterprises with names like “China Railway” are resorting to substantial salary reductions, ultimately for the sake of survival.
Other netizens commented, “With things going this way, the next step feels like massive layoffs.” and “It’s only a matter of time before restructuring and bankruptcy. They are trying everything possible to deceive employees.”
Following the attention the incident garnered online, on June 9th, employees of the China Railway Shanghai Engineering Bureau responded, stating that the suspension of performance-related salaries and layoffs are not related and that layoffs are straightforward.
However, the employee also admitted, “The overall situation in the industry is indeed not as prosperous as it was a few years ago. The company is currently revising relevant documents, which will not take more than two months. The documents to be issued must meet the requirements from above while also aligning with public sentiment.”