China unemployment insurance shields firms from layoffs

Companies that avoid or minimise job cuts can keep receiving refunds on prior year premiums.

China has extended several unemployment insurance measures until the end of 2026, including policies that support job retention, youth employment and workforce training.

The measures, announced in a circular jointly issued by the Ministry of Human Resources and Social Security and three other government departments, are aimed at helping businesses retain workers and improve skills development, according to its state news agency, Xinhua.

Under the extended job retention refund programme, companies that avoid or minimise layoffs will continue to receive refunds on unemployment insurance premiums paid in the previous year.

The government has also extended the one-off job expansion subsidy through 2026. Enterprises and social organisations that hire recent university graduates or registered unemployed young people aged 16 to 24 will receive a subsidy for each new employee.

The skills upgrading subsidy has also been extended until the end of 2026, with eligibility expanded to cover more workers.

The circular also calls for stronger management of unemployment insurance funds and continued payment of basic benefits, including unemployment allowances and medical insurance coverage for eligible recipients.