China’s economic slowdown has intensified, with mounting pressure from tightening monetary policies, frequent large-scale “price wars” among businesses, and reduced incomes for employees of state-owned enterprises. Feedback from people across the country indicates that both employment and consumer confidence are declining, causing severe impacts on grassroots livelihoods.
Since March this year, several central enterprises in Beijing have further reduced salaries for their employees. Mr. Wu, who works for a central enterprise in Beijing, revealed to Epoch Times, “Last year, some of our benefits were cut, and in March this year, it decreased by another 5%. My salary was originally 6,000 yuan, but now it’s only 5,000 yuan. With the subsidies being canceled as well, the decrease is actually more than 5%, it’s over 20% for me.”
To make ends meet, Mr. Wu has had to take on two jobs, saying, “I work in the enterprise during the day and drive for ride-hailing services at night to earn some extra money to supplement the reduced income.”
According to reports, at the beginning of 2025, authorities in China implemented salary cuts and salary caps (1 million yuan per year) for at least 27 central financial state-owned enterprises and their subsidiaries. While some financial state-owned enterprises started reducing bonuses and setting annual salary caps (100 million yuan), cutting the salaries of mid to high-level employees by half, it did not affect ordinary employees. However, this “universal pay cut” affecting the vast majority of employees is considered rare.
Another ordinary employee working for a central enterprise, Jin, in Beijing, told reporters, “A few months ago, almost the entire company had their salaries reduced. The mid to high-level management had more significant cuts, while the salaries of ordinary employees, who were already earning only a few thousand yuan, were reduced by between 5% to 20%.”
In recent times, the sudden decline in consumer confidence among mainland Chinese residents has triggered chain reactions in many places. Ms. Zhang, living in Fangshan, Beijing, said, “Although the prices in large supermarkets remain the same, small shops and mini markets are engaging in fierce price wars. I’m worried that if this continues, small shops will eventually all close down. Isn’t this cutthroat competition?”
Mr. Liu, a retiree from Tengzhou, Shandong, mentioned during an interview that the decline in residents’ purchasing power has spread to the food industry: “Prices of pork and ribs have dropped. High-quality ribs are selling for just over ten yuan per pound, and hind leg meat is only 12 yuan. Restaurants are offering heavy discounts to attract customers, you can now eat a pound each of lamb, lamb scorpions, and lamb offal for just 100 yuan, which was unheard of in the past.”
Mr. Li believes that the key reason for the price wars is that “many people used to work in private enterprises, but now many private businesses are closing down, reducing everyone’s income, and naturally, it’s causing people to be afraid to dine out.”
The observations of Mr. Zhu, a resident of Kunshan, Jiangsu, reinforce this point. He told reporters, “Export orders for private enterprises in Wuxi, Suzhou, and Kunshan have significantly decreased, and many migrant workers have left. One of the university students I know can’t find a job and only eats two meals a day.” In his view, the decline of private and foreign-funded enterprises directly affects the livelihoods and consumption behaviors of ordinary people.
Fang Ning, a Shanghai resident who is on a self-driving tour in Yunnan and Guizhou, shared with reporters his experience of driving through Zhejiang, where traffic was congested, but as he entered Jiangxi, the number of vehicles significantly decreased. He said, “From Jiangxi onwards, there are noticeably fewer vehicles on the highway, even fewer in Hunan. Today, as I entered the highway in Guizhou, I didn’t see a single car passing me in half an hour of driving, which was unheard of before. I’m staying in a hotel in Phoenix City, Hunan, for less than a hundred yuan per night. Even in the off-season, there aren’t many tourists, and the food in the restaurants here isn’t expensive.”
He elaborated, “Throughout the journey, I have noticed fewer people and cars, fewer tourists in tourist spots. Business in various industries is slow, and the deserted feeling on the highways is palpable.”
International organizations and data also reflect the “chill” in China’s economy. According to Reuters, China’s National Bureau of Statistics data shows that the Consumer Price Index (CPI) decreased by 0.1% year-on-year in May 2025. Price wars have erupted in various industries, including automobiles, e-commerce, and coffee, with the luxury second-hand market being particularly fierce.
Mandy Li, who works in the energy sector, stated that her salary was cut by 10%, coupled with the devaluation of property, she can only afford to buy second-hand luxury goods. She said, “The economy is definitely in a downturn now, the real estate crisis has greatly shrunk my family’s wealth.”
Research from Zhuyan Consultation shows that since the pandemic, the Chinese second-hand luxury goods market has seen an annual growth rate of over 20%. Emerging second-hand stores like “Super Zhuanzhuan” in Beijing are offering clearances with discounts of up to 90% of the original price. A Coach bag, originally priced at 3,260 yuan, is now selling for only 219 yuan, and a Givenchy necklace, originally priced at 2,200 yuan, is now available for 187 yuan. Mainstream platforms like Xianyu and Feiyu widely advertise discounts of up to 70% or even lower prices.