Factories Without Profits: How China’s Leaders Keep the Lights On to Avoid Unrest
By APRI Editorial Team China’s economy, a juggernaut that transformed the nation into the world’s manufacturing powerhouse, now faces a delicate balancing act. President Xi Jinping’s government is grappling with a paradox: how to eliminate unprofitable, inefficient firms to curb overcapacity and deflation while preserving jobs to avoid social unrest. This tension, rooted in the nation’s slowing $19 trillion economy, has left policymakers navigating a landscape where industrial losses are at their highest since 2001. The stakes are high, as mass layoffs could erode public support and destabilize a system that prioritizes social stability above all else. Drawing from scenes of struggling factories and the broader economic context, it’s clear that China’s approach to its “zombie” firms—those kept alive by subsidies and loans—reflects both the resilience and fragility of its economic model. According to the latest report by Bloomberg News , the heart of this challenge is a factory like Sha...
