China's Work Culture: Trends and Future Outlook

China Outlaws the "996" Work Culture

A recent ruling by China’s highest court has officially deemed the “996” work system unlawful.

The “996” practice refers to a work schedule requiring employees to work from 9 a.m. to 9 p.m., six days a week. Initially associated with the rapid growth of Chinese technology companies, it became synonymous with ambitious startups and the pursuit of wealth through initial public offerings or funding.

Evolution of the 996 System

However, the application and perception of “996” have shifted over time. Both employers and employees now understand and utilize it differently, influencing how regulators approach the issue.

The Supreme Court’s decision, alongside guidelines released by the Ministry of Human Resources, will affect tech companies and their employees. Interestingly, the specific case that prompted this ruling involved a logistics worker.

The Case of the Logistics Worker

This worker earned a monthly salary of 8,000 RMB (approximately $1,240). This income is slightly below the average wage in China’s 37 largest cities.

A Broader Message from Regulators

Chinese regulators are signaling a need for a fundamental shift in employer-employee relationships. This necessitates changes in practices and underlying principles within Chinese society.

The full extent of this transformation is still unfolding. It will require adjustments not only to actions but also to the core beliefs, motivations, and reward systems prevalent in China.

This ruling represents a significant step towards protecting worker rights and promoting a healthier work-life balance within the country.

The Intensified Work Ethos in Chinese Corporate Culture

Huawei serves as a prominent example when examining the demanding work environments prevalent in numerous Chinese companies. It embodies both the advantages and potential drawbacks associated with a 996 work schedule.

The company, headquartered in Shenzhen, is widely recognized for its “wolf culture.” Interpretations of this term vary. Some view it as a strong sense of camaraderie, with team members collaborating towards common objectives. Others perceive it as a considerably harsher environment. A former Huawei employee, interviewed in 2017, described it as “kill or be killed,” emphasizing intense internal competition designed to enhance the company’s ability to overcome external challenges.

Regardless of individual perceptions, the rigorous nature of Huawei’s culture significantly contributed to its achievements. Unlike European competitors like Ericsson and Nokia, often criticized for bureaucratic processes and complacency, Huawei’s determination to succeed and complete projects, irrespective of obstacles, resonated with telecommunications providers globally.

Huawei’s success was also supported by favorable state financing and profitable domestic contracts. These resources enabled the company to subsidize its international operations, further illustrating the competitive advantages stemming from its distinctive corporate spirit, which subsequently influenced the adoption of “996” practices by other Chinese businesses.

Initially, Huawei and other Chinese companies faced technological disadvantages compared to their international counterparts. They compensated for this by prioritizing cost-effectiveness, speed, and adaptability in navigating complex business environments, particularly in developing nations.

Skander Garroum, a German entrepreneur with experience in both China and Silicon Valley, highlights the importance of execution. He notes that while the U.S. tech narrative often centers on innovative products scaling due to inherent superiority, success in China and similar markets depends heavily on effective execution and dedicated effort.

While often overstated, the commitment to exceeding rivals is a source of pride for many Chinese companies. Didi Chuxing’s triumph over Uber in the mid-2010s Chinese market, for instance, was attributed to superior local execution and a relentless pursuit of victory, ultimately leading Uber to withdraw from the competition.

Many firms actively recruit individuals from less privileged backgrounds who demonstrate ambition and a desire for upward mobility. Huawei specifically targets young, skilled individuals from smaller cities, offering them their “first pot of gold” (第一桶金 dìyī tǒng jīn) – their initial opportunity for significant financial gain and social advancement.

As China’s economy expanded and its companies gained global recognition, this dream became attainable for many. Generous compensation packages often accompanied the demanding work hours. Long-term Huawei employees participating in the company’s share scheme have received annual dividends reaching hundreds of thousands, and even millions, of dollars, frequently exceeding their base salaries. This represented substantial rewards for dedicated effort.

A Framework Enabling Employer Exploitation

Despite a reputation for a relentlessly demanding work environment, Chinese legislation actually provides substantial protections for employee rights. However, the consistent application of these regulations has been notably lacking.

While overtime compensation is legally required for work exceeding the standard 40-hour, five-day work week, employers frequently utilize both official and unofficial strategies to circumvent these legal responsibilities.

At Huawei, this manifests as a “striver pledge,” a purportedly voluntary agreement that new hires sign, relinquishing their entitlement to overtime pay and accrued vacation time. Although Huawei’s practices have drawn scrutiny, comparable methods are widespread, particularly among companies that cannot match Huawei’s benefits and career opportunities.

One long-term HR manager, with experience at both domestic and international companies in China, stated, “Our contracts for blue-collar staff explicitly state that all overtime compensation is already factored into their monthly salaries.” This practice, while problematic, is reportedly common throughout China.

Individuals who challenge this system often encounter opposition not only from their employers but also from the government. Independent labor organizations are effectively prohibited in China, and the state-controlled All-China Federation of Trade Unions has historically provided inconsistent support to workers involved in labor conflicts.

In 2019, Li Hongyuan, a former Huawei employee of 13 years, was incarcerated for 241 days on accusations of blackmailing the company during severance negotiations. He was ultimately released due to insufficient evidence of wrongdoing, but his prolonged detention sparked significant public outcry online.

Growing discontent regarding labor conditions in China, despite its nominally socialist system, has been evident in recent years. In 2018, security forces at Peking University suppressed demonstrations organized by the university’s Marxist Society, which protested the suppression of labor activists in southern China. The “996.ICU” GitHub repository emerged as a popular platform for tech workers to express frustration with harsh workplace conditions and publicly identify companies with particularly egregious practices.

Furthermore, a trend known as “lying flat” (tǎngpíng 躺平) – rejecting the intense pressure and ambition of previous generations – has gained traction among disillusioned young people across China, prompting criticism from the government in major news outlets.

The Evolving Landscape of Work Hours in China: Regulations and Cultural Norms

Driven by concerns regarding family pressures and a declining birth rate, Chinese authorities are now focusing on reshaping the established, yet uncodified, practices governing employment relationships within the nation.

Following the ruling issued on August 26th, numerous organizations swiftly revised their formal policies. However, for a significant number of businesses and sectors, the more substantial challenge lies in altering deeply ingrained cultural expectations.

ByteDance, the parent company of TikTok, formerly operating under a six-day work week policy, officially discontinued this practice. This decision, however, wasn't universally embraced by its workforce, as reduced working days were accompanied by proportional decreases in compensation.

“Many of us understand the commitments involved when joining internet-based companies,” explained Zhou, a professional with experience at multiple Chinese tech firms. “We anticipate demanding workloads, but also the potential for increased earnings.” She further stated that individuals seeking a different work-life balance would likely choose alternative employers, expressing understanding towards the discontent felt by some ByteDance employees regarding the altered terms.

Some Chinese technology sector employees fear that increased governmental pressure for adherence to stricter working hour regulations may simply lead to a rise in uncompensated, informal work. “As far as I am aware, my team and I have experienced no changes,” revealed an employee of a prominent U.S.-listed Chinese internet company. “I continue to work during weekends and will do so over the National Day holiday in October.” They added that such extra hours are, “naturally,” not subject to overtime pay.

The perception that “business operations are continuous” fuels skepticism regarding the potential impact of governmental interventions on the working conditions of tech professionals. “ByteDance is reducing official hours and pay, but without broader changes, the effect is minimal,” Zhou commented directly. “Employees remain motivated to secure their positions and advance their careers, inevitably leading them to work to their full capacity… or seek employment with companies offering higher remuneration for such dedication.”

Conversely, those in managerial roles demonstrate a greater willingness to fully comply with recent governmental directives, both in their literal interpretation and underlying intent. “Organizations must demonstrate proactive measures in this area, as non-compliance carries the risk of being singled out by regulatory bodies,” stated a corporate HR executive with Sino-European experience. “HR departments should undertake comprehensive audits to accurately assess employee working hours,” adding that, “a likely initial response will be increased hiring, enabling shorter working hours for each individual.”

There is widespread agreement on the overarching trend: with Xi Jinping’s emphasis on “common prosperity” and the scrutiny of China’s leading corporations, the era of rapid growth and prosperity appears to be drawing to a close. The extent to which the government will enforce these changes remains to be seen. For the first time in recent history, Beijing is signaling a shift away from prioritizing business interests over labor rights. The crucial question now centers on the degree to which this balance will be recalibrated.