China’s economic troubles have sparked a wave of worker protests across the nation. From April to May 2025, over 60 pay-related protests erupted in 21 provinces, involving tens of thousands of workers.
These protests cut across many sectors, including cars, construction, mining, and electronics. At Neta Auto, workers received only half their wages since September 2024, with some getting as little as 2,690 yuan ($373) monthly.
Reports claim the CEO fled to the UK amid claims of stolen funds. The ongoing tariff battle with the United States has hurt China’s exports, forcing factories to move to cheaper areas.
This unrest has spread beyond China’s borders, with Chinese construction projects in Indonesia facing strikes over unpaid wages. The North Kalimantan economic zone project, worth 410 million yuan, saw workers protest in both January and April 2025.
Foreign investors now question the stability of Chinese markets as Belt and Road projects face delays across several regions. Labor disputes threaten China’s global trade position.
The effects reach far beyond its borders.
Key Takeaways
- Widespread worker protests over unpaid wages have erupted across 21 Chinese provinces, with over 60 pay-related demonstrations between April and May 2025.
- Companies like Neta Auto cut wages to just 2,690 yuan ($373) monthly, while Weilixing Toys shut down with 23 million yuan in debt due to declining exports.
- China’s economic troubles have spread to overseas projects, with workers striking at the 410 million yuan North Kalimantan development in Indonesia.
- The U.S.-China tariff war has forced Chinese manufacturers to relocate factories to cheaper provinces or neighboring countries like Vietnam.
- Foreign investors now question China’s manufacturing stability as labor unrest, local government debt, and reduced export growth threaten global supply chains.
Overview of Protests in China
China faces growing labor unrest as factory workers demand unpaid wages across the country. Recent protests at companies like Neta Auto and Weilixing Toys highlight deeper problems in China’s slowing economy and its impact on global trade.
Workers protesting against unpaid wages
Labor unrest has spread across China as tens of thousands of workers demand their unpaid wages. From April 1 to May 21, over 60 pay-related protests and strikes erupted in 21 provinces and municipalities.
Workers reported going months without receiving any salary or getting only partial payments, creating financial hardship for many families.
These protests highlight growing economic stress in China’s manufacturing sector. Companies like Neta Auto and Weilixing Toys Ltd. faced worker demonstrations as the trade war with the United States damaged export revenues.
The widespread nature of these protests suggests deeper problems in China’s economy, with unpaid wages now affecting construction projects as far away as Indonesia. This wage crisis threatens to worsen China’s economic slowdown and impact global trade relationships.
Cases of Neta Auto and Weilixing Toys Ltd.
China’s factory worker protests show real problems in the country’s economy. Recent cases at Neta Auto and Weilixing Toys Ltd. highlight growing labor unrest tied to economic slowdown.
- Neta Auto has paid workers only half their normal wages since September 2024, causing financial strain for employees.
- Workers at Neta Auto report receiving just 2,690 yuan ($373) per month, far below their expected income.
- The wage cuts at Neta Auto point to cash flow problems in China’s electric vehicles sector despite government support.
- Weilixing Toys Ltd. faced protests from about 400 workers after announcing a production halt on May 6 without offering compensation.
- The toy maker cited 23 million yuan in debt as the main reason for its sudden closure.
- Weilixing Toys directly linked its financial troubles to declining international trade, showing the impact of global economic shifts.
- Both companies face challenges from China’s trade surplus reduction and increased competition in export markets.
- Local government debt issues have limited the ability of officials to step in and help these struggling companies.
- The central bank has not provided enough support to prevent these wage payment failures.
- These cases reflect broader economic rebalancing efforts that have created short-term pain for workers.
- Fixed asset investment has slowed across China, making it harder for companies to expand or even maintain operations.
- Foreign buyers have reduced orders from Chinese manufacturers due to tariff wars and economic uncertainty.
Impact on exports due to tariff war with the United States
The tariff war between China and the United States has dealt a serious blow to Chinese exports. Trade tensions escalated as both nations imposed higher import taxes on each other’s goods, forcing many Chinese manufacturers to cut production or close entirely.
Export growth fell sharply, with some sectors seeing double-digit declines after the U.S. placed tariffs on over $360 billion worth of Chinese products. This trade conflict directly contributed to China’s economic downturn and put pressure on the yuan exchange rate.
Chinese companies responded by moving factories to provinces with cheaper labor costs to offset rising production expenses. Many firms relocated from coastal regions to inland areas where wages are lower, while others shifted operations to neighboring countries like Vietnam and Indonesia.
President Xi Jinping’s government attempted to counter these effects through fiscal policy adjustments and infrastructure investment, but the trade surplus continued to shrink. Foreign investors grew cautious about the Chinese market as global supply chains faced disruption from this economic rebalancing.
Specific Cases of Unrest
Labor unrest has spread across China’s manufacturing sector with workers staging protests at electronics factories and toy plants. Recent strikes at Yuangao and Sengled Optoelectronics highlight growing tensions as workers demand months of unpaid wages amid the economic slowdown.
Protests at Yuangao and Sengled Optoelectronics Co., Ltd.
Labor unrest has spread across major Chinese manufacturing plants, highlighting deeper issues in China’s economy. Recent protests at Yuangao and Sengled Optoelectronics reveal growing tensions as workers demand fair treatment.
- Yuangao, a Taiwanese-owned electronic appliance maker, faced worker protests on May 5, 2025, creating disruptions in production schedules.
- The company shifted manufacturing to other locations, which directly cut overtime pay for many factory workers.
- This production shift reflects broader economic rebalancing efforts as companies try to manage costs during China’s economic slowdown.
- Over 1,000 workers at Sengled Optoelectronics Co., Ltd. organized protests due to unpaid wages and financial problems.
- The protests signal growing concerns about cash flow issues affecting Chinese manufacturers amid declining export growth.
- These labor disputes happen as China’s GDP growth rate continues to fall below government targets.
- Foreign investors now question the stability of manufacturing operations in China, potentially affecting future capital formation.
- Local government debt problems make it harder for officials to address worker complaints or provide financial support to struggling companies.
- The Chinese government faces pressure to balance worker rights with maintaining economic activity during this period of fiscal deficit.
- These factory protests may impact global trade as supply chains face potential disruptions from manufacturing delays.
- Both companies serve as suppliers for international brands, meaning these local disputes could affect consumer goods availability worldwide.
- The Communist Party must address these incidents carefully to prevent wider social unrest while managing the ongoing economic malaise.
Strikes at various manufacturers in different provinces
Worker strikes have spread across China’s manufacturing sector in recent months. These labor actions highlight growing economic stress in the world’s second-largest economy.
- Denture makers in Chengdu, Sichuan Province organized protests after weeks of unpaid wages, affecting export schedules to global markets.
- Clothing and shoe factories throughout Guangdong Province faced multiple work stoppages, disrupting supply chains for international brands.
- Leader Tech Electronics workers walked off production lines in both Sichuan and Hubei provinces, demanding payment of back wages and better working conditions.
- Paper manufacturers in Shandong Province experienced strikes that halted production for nearly two weeks, impacting domestic supply and export commitments.
- Factory workers in Guangdong’s paper industry joined the wave of protests, citing similar concerns about missed paychecks and reduced hours.
- Economic slowdown factors, including trade tensions with the United States, have put pressure on Chinese manufacturers to cut costs.
- Local government debt issues have limited the ability of regional authorities to step in and resolve labor disputes quickly.
- Fixed asset investment has declined in several industrial zones where strikes occurred, showing broader economic challenges.
- Export growth targets have been missed by companies facing labor unrest, creating a cycle of financial strain.
- Global trade partners have reported shipment delays from affected Chinese factories, forcing some to seek alternative suppliers.
Unpaid wages in Indonesia
Labor unrest in China has spread beyond its borders to affect Belt and Road projects in neighboring countries. In Indonesia, Chinese workers at the North Kalimantan economic zone faced similar wage problems as their mainland counterparts.
These laborers reported waiting for wages owed for January and April 2025, leading to a strike on May 6 against China Nonferrous Metals Industry’s 12th Metallurgical Construction Co., Ltd.
The North Kalimantan project, valued at 410 million yuan, represents a significant investment in China’s global trade strategy. This wage dispute highlights growing economic pressures within China’s overseas investments and infrastructure projects.
The protests mirror domestic economic slowdown issues, with fixed asset investment declining and local government debt rising. Foreign companies now face increased risks when partnering with Chinese firms on international projects, as financial constraints affect China’s ability to maintain its global economic commitments.
Impact on Global Trade and Investments
China’s economic troubles spread beyond its borders, affecting global supply chains, foreign investments, and trade relationships with major partners like the United States and European Unionâread on to discover how this ripple effect might change your investment strategy and shopping prices.
Belt and Road Initiative projects affected by protests
Labor unrest has disrupted major Belt and Road Initiative projects across Asia. A prime example is the North Kalimantan development valued at 410 million yuan, where workers staged protests over unpaid wages.
This pattern extends beyond Indonesia, with similar demonstrations occurring at six construction sites spanning Inner Mongolia, Sichuan, Guangdong, Hunan, and Hong Kong. These protests highlight growing challenges for China’s global infrastructure investment strategy.
Foreign investors now face increased risks as project delays mount and costs rise due to these labor disputes. The widespread nature of these protests signals deeper structural issues within China’s economic model, potentially threatening the trade surplus and export growth that have fueled its rise.
Local government financing vehicles, already burdened with debt, struggle to meet financial obligations to workers on these massive infrastructure projects. This situation creates ripple effects through the global economy as supply chains face disruption and completion timelines extend indefinitely.
Potential repercussions on foreign investments in China
Beyond the Belt and Road troubles, foreign investments inside China face mounting challenges. Labor unrest has created a risky climate for global companies with Chinese operations.
The case of Neta Auto, where CEO Zhang Yong reportedly fled to the UK amid financial problems, signals deeper issues for investors. Foreign firms worry about sudden bankruptcies and unpaid wage disputes that could affect their supply chains and production schedules.
Local governments have promised to step in and solve these wage disputes, but investors remain cautious. Financial instability threatens the reliability of Chinese manufacturing partners, pushing some companies to consider relocating operations to more stable markets.
This shift could reduce China’s trade surplus and slow its economic growth rate. The combination of labor protests, economic slowdown, and high-tech manufacturing disruptions has made many global firms reconsider their investment strategies in the Chinese market.
Conclusion
China’s economic slowdown signals major shifts in global trade patterns. Worker protests over unpaid wages reveal deeper problems within the nation’s financial system. Foreign investors now face tough choices about their Chinese ventures as risks mount.
The ripple effects touch supply chains worldwide, forcing companies to rethink their manufacturing strategies. These challenges may reshape international commerce for years to come, with countries competing to attract businesses leaving China.
Local government debt and weakened household consumption further strain growth prospects. Trade partners must adapt to reduced Chinese demand while watching for new opportunities. Smart investors will diversify their portfolios across multiple regions to protect against continued instability.
The path forward requires careful monitoring of China’s economic indicators and policy responses.
