Chinese Firms Cut Bonuses Amid Economic Slowdown
China's corporate sector faces significant challenges as year-end bonus distributions decline markedly across multiple industries, reflecting broader economic pressures affecting the world's second-largest economy.
The traditional year-end bonus season, once a celebrated period preceding Lunar New Year festivities, has become notably subdued. Corporate executives have implemented strict policies prohibiting employees from publicly discussing compensation details, marking a departure from previous years when substantial payouts were commonly shared on social media platforms.
Widespread Bonus Reductions
According to a comprehensive 2026 market outlook report by global human resources firm Randstad, approximately 26 percent of surveyed workers indicated they would receive no year-end bonus for 2025. Nearly half of respondents reported bonuses limited to one or two months' salary, representing a significant reduction from historical norms.
The economic pressures extend beyond private enterprises to government institutions. Public sector employees report receiving performance-based bonuses equivalent to approximately one month's salary, while local departments continue reducing non-tenured staff positions due to budgetary constraints.
Foreign Enterprises Face Challenges
International companies operating in China encounter additional complications from currency fluctuations and headquarters-imposed performance metrics. German chemical firms report that despite meeting targets in yuan terms, conversions to euros failed to satisfy parent company expectations, resulting in limited bonus distributions.
Following company-wide pay freezes implemented in previous years, many foreign enterprises have resumed only modest salary increases of three to five percent in 2026, reflecting cautious approaches to compensation growth.
Sectoral Disparities Emerge
Notable exceptions exist within specific industries aligned with government priorities. Technology companies JD.com and Dreame Technology reported substantial bonus increases, with JD.com announcing a 70 percent year-on-year increase in total distributions.
Dreame Technology, specializing in smart hardware and artificial intelligence applications, provided employees with gold supplements alongside standard bonus packages. The company, founded in 2017, focuses on high-speed digital motors and motion control technologies while expanding into automotive systems and robotics.
Manufacturing Sector Pressures
Traditional manufacturing industries face concentrated challenges from overcapacity, weakened domestic demand, and intensified competition. Restaurant owners in Dongguan, a major manufacturing center in Guangdong province, report factories concluding production earlier than customary due to insufficient order volumes.
The shift represents a fundamental change from previous economic cycles when year-end bonuses served as recruitment tools to attract workers returning early from holiday periods to meet production demands.
These developments reflect broader economic adjustments as China navigates slower growth rates, compressed profit margins, and increased external uncertainties affecting corporate planning and compensation strategies.