In the face of increasingly severe grassroots financial pressures, many regions in mainland China are emphasizing the so-called “Protecting Wages, Protecting Basic Livelihoods, and Ensuring Operation” (referred to as the “Three Guarantees”). How significant is the pressure to “Protect Wages”? The scale and structure of financially supported personnel in China have once again become a focus of public attention.
On November 7, 2025, the Ministry of Finance released a report on the implementation of China’s fiscal policies in the first half of 2025, emphasizing that the premise of the “Three Guarantees” is to grasp the bottom line. Among them, the issue of “Protecting Wages” has raised a public concern yet unfamiliar question: how many financially supported personnel are there in China?
For a long time, the lack of systematic and transparent public data on the scale of financially supported personnel whose salaries and welfare expenses are borne by fiscal funds has been a challenge. The Chinese Ministry of Finance stopped disclosing detailed figures after 2009, making it difficult to comprehensively assess the sources of local financial pressure.
Recently, a paper titled “Estimation and Structural Analysis of China’s Financially Supported Personnel Scale” authored by Zhang Jun, the Dean of the School of Economics at Fudan University, and Liu Zhikuo, among others, was published. The paper, utilizing official public data, systematically estimated and analyzed this group for the first time, revealing three core issues of continuous scale growth, internal structural imbalance, and severe misallocation of geographical distribution.
By utilizing multiple core data sources, the paper estimated the scale, internal structure, and spatial distribution of China’s financially supported personnel in recent years, sparking widespread attention.
An interview with Liu Zhikuo, one of the authors of the paper and a professor at the School of Economics at Fudan University, was published by Southern Weekend on November 18.
Liu Zhikuo stated that the scale of financially supported personnel is a clear and concerning issue for everyone, but there haven’t been many answers in the past. All our data comes from official sources. We primarily used the Ministry of Finance’s “China Accounting Yearbook,” which discloses the “Organization and Personnel Status Table” of national budget units—the closest dataset to the concept of financially supported personnel, covering the period from 2000 to 2018. Additionally, supplementary data on employed personnel from urban institution and agency units were obtained using the “China Population and Employment Statistics Yearbook.”
What constitutes financially supported personnel? Liu Zhikuo explained that narrowly defined, it refers to personnel and retired staff within the establishment of institutions or agency units. Broadly defined, it also includes temporarily hired personnel by institutions or agency units and other personnel whose wages and benefits are paid by public finance. Some scholars also include a considerable number of employees of state-owned enterprises and self-funded personnel of units based on whether the work unit belongs to the public sector. Overall, existing literature mostly adopts a broader approach, focusing on whether personnel salaries are paid by public finance, without distinguishing whether they are part of the establishment. In terms of absolute numbers, data from various approaches all indicate that China’s financially supported personnel have continued to increase in recent years.
Calculations based on the most representative “intermediary approach” show that the number of financially supported personnel increased from 52.12 million in 2004 to 68.46 million in 2020. The calculation also indicates that the “support ratio” measured by population has reached 4.85%; in terms of employment structure, about 5.54% of the employed population works in institution or agency units with salaries paid by public finance. This implies that the pressure on local governments in personnel expenditures continues to accumulate.
The primary source of growth in financially supported personnel is not active employees but retirees. With the acceleration of population aging and increased life expectancy, the size of the retired population has rapidly expanded from 14.68 million in 2004 to 26.87 million in 2020, accounting for nearly forty percent of the total supported personnel.
Meanwhile, there has been a shift in the internal structure of active employees with a “decrease within the establishment and increase outside the establishment.”
After 2013, the number of positions was restricted, but in order to maintain the operation of public services, institutions and agency units began to hire a large number of contract workers and dispatched personnel. The number of non-establishment personnel increased from 2.15 million in 2004 to 4.42 million in 2018, more than doubling. These personnel, although not part of the establishment, have their wages borne by public finance, increasing implicit expenditure pressures.
Liu Zhikuo believes that focusing solely on reducing positions without adjusting the employment mechanism can lead to the paradox of “reducing personnel but increasing costs”: while fewer positions within the establishment, the personnel expenses paid by public finance become heavier.
Against the backdrop of increasing fiscal pressures, ensuring the sustainability of grassroots financial “Wage Protection” has become a question that policy makers must address.