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By The Marx China

In this report, we Marxists attempt to explain how China's economic crisis developed under the impact of the global capitalist crisis and how it has been exacerbated by the recent surge in global energy prices, triggered by the 2026 war with Iran. The economic catastrophe under Xi Jinping's government and the Chinese Communist Party is generating waves of protests, attributed to the continued devaluation of the yuan (CNY) and a wave of layoffs. Faced with this situation, the Chinese proletariat is confronting its greatest challenge to survival since the beginning of the 21st century. Several recent, exemplary protests mark a shift within the Chinese working class, moving from purely economic protests to collective action with political demands, characterized primarily by opposition to an "unscrupulous government" whose sole purpose is to maintain the privileges of the ruling classes.

1. Industrial downsizing and "relocation and abandonment" of production: Strike at Ideal Auto Parts in Ningbo

From April 7 to 8, hundreds of workers at the Ideal Auto Parts factory in Ningbo, Zhejiang Province, went on strike to protest the company's relocation and the lack of compensation for losses suffered due to layoffs. The workers spontaneously gathered to demand that the company's management protect their interests in accordance with the Labor Law. Police intervened to communicate with the workers and attempted to identify several "workers' representatives" at the site, but one worker refused, stating, "There are no representatives; everyone's demands are different."

The instability in the automotive supply chain reflects the dire situation of China's manufacturing industry, which is under the double pressure of rising costs (electricity, raw materials) and export disruptions (disruptions to maritime transport caused by the war). Capitalists are attempting to shift the costs of industrial transformation onto workers, leaving them with nothing, while the workers are fighting back with collective strikes.

2. Thousands of people protested for days after a supermarket chain in Nanyang, Henan, went bankrupt.

Between April 7 and 8, the Lukangyuan supermarket chain, located in Nanyang, Henan province, went bankrupt. More than ten stores closed overnight, and their owners fled. This sparked days of protests by thousands of employees, suppliers, and partners, who demanded back pay, refunds for outstanding purchases, and the remaining balance on their membership cards. On April 8, some employees attempted to draw attention to the incident by blocking traffic.

Lukangyuan, a supermarket chain in Nanyang, Henan Province, was a regional retail giant with a near-monopoly. Before its bankruptcy, Lukangyuan was among the leading supermarket chains in Nanyang City, with dozens of large stores in the city center and surrounding counties (notably those on Chezhan Road, Dushan Avenue, and Binhe Road). This dense network of stores allowed it to penetrate the most basic social circles of Nanyang residents.

Lukangyuan (commonly known as Nanyang Lukangyuan Trading Co., Ltd.) exhibits typical characteristics of local bureaucratic capitalism in China:

① Family control : Decision-making power is highly concentrated in the hands of a few family members and transparency in management is extremely low.

2. Close ties between government and business : As a major contributor to and participant in the "vegetable basket project," the company had long enjoyed the backing and support of local authorities. This context fostered the illusion among ordinary people that "with government support, it will never fail," leading them to confidently invest large sums of money in the company.

Lukangyuan's expansion does not depend entirely on retail profits, but rather on a highly leveraged cash flow strategy:

① Dependence on prepaid cards : The company relies heavily on the "member recharge" model. Through frequent "recharge 1000 and get 100 free" promotions, it has absorbed hundreds of millions of yuan in interest-free working capital from tens of thousands of members.

2. Supplier exploitation : Lukangyuan imposes extremely long payment terms (generally 3 to 6 months) on its suppliers. In reality, it uses supplier payments and member advances as "interest-free loans" for other investments in its own projects (such as real estate, microloans, etc.).

3. The withdrawal of multinational capital: A Russian company unilaterally breached a contract, and thousands of Chinese workers took to the streets to demand payment of their back wages.

On April 12, more than 1,000 Chinese workers from the Komsomolsk-on-Amur oil refinery in Russia took to the streets. Dressed in their work uniforms, they braved the bitter cold to display banners in Chinese and Russian, protesting five months of unpaid wages from the company that owns the project.

The trigger for this crisis was Rosneft, the Russian state-owned oil company. At a critical juncture, when the hydrocracking project was 90% complete, Rosneft abruptly announced the termination of its contract with the general contractor, a subsidiary of the Beijing Haihua Group, citing "quality and deadline" issues. Rosneft refused to provide funds to pay the Chinese workers' wages, prompting thousands of Chinese workers in Russia to take to the streets to demand their back pay.

The Komsomolsk-on-Amur hydrocracking project is a key project in Sino-Russian energy cooperation, aimed at processing Russian crude oil for export to China. Its construction was carried out under the guarantee of a series of "strategic cooperation agreements" signed by both countries. Initially, to attract Chinese capital (Haihua Group) and cheap labor, the Russian side offered generous terms.

However, for workers sent to the international labor market, wages were completely unstable. This cooperation was, from the outset, a speculative venture between Chinese bureaucratic capital and Russian state capital. Due to the impact of the Iran-Iraq War and the international revolutionary wave, the exchange rate between the renminbi (CNY) and the ruble (RUB) experienced significant fluctuations. These "strategic projects" quickly lost their investment value, and the legitimate remuneration of workers abroad became free capital used by defaulting capital to maintain its own cash flow and protect itself against losses from bad debts.

4. The exploitation of platform capitalism and the resistance of the working class: the Xi'an taxi drivers' demonstration

In recent years, traditional taxis have suffered multiple setbacks, including the algorithmic digital exploitation by online ordering platforms and the widespread adoption of bike-sharing systems. The market has shrunk, drivers' earnings have plummeted, but contractual fares (i.e., the pursuit of monopoly rents) remain high. A large portion of their profits goes to taxi companies (which are, in reality, fronts for the authorities), while the drivers who actually do the work struggle to make a living.

On April 13, hundreds of taxi drivers in Xi'an, Shaanxi Province, protested outside the Xi'an Taxi Management Bureau, demanding a reduction in their contracted fares. During the protest, led by a union leader, the drivers chanted slogans such as "The government is corrupt," "Down with the management bureau!", "We need to survive," and "We need to eat." Later, the director of the Xi'an Taxi Management Bureau intervened and spoke with the taxi drivers.

When someone shouted the slogan "Bankrupt the taxi company!", the company representative stated that they could not allow the company to go bankrupt outright, but that they could resolve other issues raised within the limits permitted by the government. Subsequently, the secretary of the Lianhu District Committee from Xi'an City arrived and temporarily calmed the taxi drivers through administrative channels, taking some of them to a meeting room for negotiations. However, the solution proposed by the government lacked compensation, and the implementation timeframe was unacceptable to the taxi drivers, resulting in no progress in their efforts to protect their rights.

Taxi drivers and rideshare drivers are extremely sensitive to rising fuel prices and platform commissions. Their taking to the streets and pointing the finger at the "unscrupulous government" demonstrates that public discontent with the current economic situation has escalated from economic demands to political challenges.

5. The Iran war devastates the Chinese economy: companies went bankrupt and wages plummeted to levels similar to those of 30 years ago.

(1) Systemic collapse of the manufacturing industry

① The textile and plastics industries are in crisis : The video mentions that the soaring rise in oil prices has led to an increase in the cost of raw materials for synthetic fibers (such as polyester and nylon) and plastics, which has caused many factories to close due to their inability to cope with the costs.

Many factories have ceased production due to unsustainable costs. One shop owner mentioned that a third of textile factories are expected to close by the end of the month.

②The wave of closures of established factories : This record shows that many factories that had been operating for decades were dissolved due to the deteriorating business environment, including Dongguan Xingming Plastic Mold Company, which had a 20-year history, and Ting Shan Li Hua Toy Factory, which had been operating for 32 years and in which Hong Kong had invested.

(2) The desolate scene of the shopping center

The desolation of Huaqiangbei in Shenzhen : A video shows the current state of Huaqiangbei, once known as "China's number one electronics street ." Numerous shops have closed and relocated, some even renting premises for as little as 300 yuan a month (US$44), but without finding tenants. One shop owner lamented, "The most prosperous area of ​​Shenzhen has become this... more desolate than the countryside."

(3) Sharp wage decline and employment crisis

① The "1,000 yuan salary" (US$147) becomes the norm : In the video, many young people (including graduate students and employees of state-owned enterprises) reported that their monthly income after insurance deductions was only about 1,000 yuan (US$147). A student teacher in a small county in Shaanxi province earned only 800 yuan a month (US$117), and even after becoming a full-time teacher, her salary was just over 1,000 yuan (US$147).

2. Highly educated people forced to change careers : This document includes cases of graduates in broadcasting and voice-over who, unable to find work, turned to selling dumplings at street stalls.

③ Graduation equals unemployment : In 2026, the number of university graduates in China is expected to reach 12.7 million, but job opportunities have declined drastically, forcing many young people to deliver food or stay at home and depend on their parents.

(4) The difficulties that people face in subsisting at the community level.

① Extremely low living budget : A monthly income of 1,000 yuan (US$147) means that daily expenses must be kept under control to avoid exceeding 33 yuan (US$5). One supermarket employee commented that her daily income is just over 20 yuan (US$3).

② Exploitation by intermediaries : The video points out that even in the informal labor market, due to layers of deductions by intermediaries, workers can only earn a few tens of yuan after a full day of sales and promotion.

6. The Great Depression hits China: 50 million homeless, desperate young people begin to rebel

(1) A large homeless population

① The homeless population is increasing : The video cites data showing that, as of August 2025, the number of homeless people in the country has reached approximately 47.5 million, of which 61% are young people under the age of 33.

2. Shelters in the City Streets : This documentary records the closure of the Luohu bus station in Shenzhen and the ubiquitous image of unemployed people sleeping on the streets of Guangzhou and Kunshan. Many day laborers were forced to settle in parks, train station underpasses, and even on second-story platforms in the rain.

(2) The dilemma of job searching and the survival crisis

① Difficulty finding work and widespread fraud : A young man from Shenzhen who had been without work for half a month said he had no money for food or a place to stay; a middle-aged man was scammed by an agency, losing his only savings, and could only drink tap water to fill his stomach.

2. A double blow to the body and mind : A middle-aged man from Sichuan who failed to find work in Xi'an suffered a heart attack and had to sell his mobile phone to buy medicine because he had no money for hospitalization and ended up sleeping on the street.

③ Extreme regression in basic positions : Young people are starting to compete with professional garbage collectors.

(3) The collective collapse of ordinary families

① Unemployed Family : The video shows a family of four who have lost their jobs and are facing the pressure of mortgage payments, car loans and raising children, plunging the family into despair.

2. Professionals' salaries have been drastically reduced : A doctor at a hospital in Guangxi reported that, due to financial difficulties, he was only able to receive 60% of his salary, leaving him with just over 900 yuan (US$132) after deducting social security contributions.

(4) The awakening of consciousness and the resistance of the younger generation

1. Questioning the grand narratives : Increasingly, young people are beginning to question official propaganda, convinced that the "grand narratives" are too far removed from their reality. They are starting to ask themselves, "Who supports whom?" and reject the so-called "education of gratitude."

2. Identifying the Real Enemy : Through the personal testimonies of several bloggers, the video analyzes the ruling class's tactic of "creating a common enemy" to divert attention from internal conflicts. Young people begin to understand that the real enemy is someone who harms their interests, not a distant, officially designated target.

7. The Chinese economy hits rock bottom: thousands of hospitals close, doctors and nurses go on strike over unpaid wages

(1) The collapse of the health system and the protests

①Large- scale strike by medical staff : From April 8 to 9, hundreds of employees of the Hedong District People's Hospital, Linyi, Shandong Province, began a large-scale strike in protest over two years of unpaid wages and a disruption in social security payments.

2. Wave of hospital closures : The video points out that more than 1,300 private hospitals have closed since 2022. Recently, hospitals such as Suichuan Taihe Hospital in Jiangxi and Chaoyang Kangtai Hospital in Shantou, Guangdong, have announced their closure and mass layoffs.

③ Main cause of closure : The fundamental reason is that the three-year pandemic lockdown depleted the health insurance fund, coupled with deteriorating local government finances, resulting in delays or reductions in hospital funding, putting medical institutions under tremendous pressure to survive.

(2) The "medical winter" at the community level

①Lack of access to medical care : Due to the decline in reimbursement from medical insurance and the shortage of rural pensions, many elderly people (especially in rural areas) are unable to seek medical treatment even when they are ill and can only wait to die at home.

2. Extremely unfair distribution : The video contrasts the enormous gap between the completely free, high-end medical care enjoyed by high-ranking CCP officials and the abysmal medical security available to ordinary people. This imbalance is becoming a source of social unrest.

(3) Chain reaction across multiple industries and wave of wage arrears

① Infrastructure and real estate crisis : Several large industrial park projects in Shanghai and Guangzhou have faced access blockages due to unpaid wages to migrant workers. Profits at major real estate companies like Gemdale Group have plummeted, and the number of employees in the sector faces a potential halving.

2. Disturbances in the manufacturing and service sectors : Auto parts factories, taxi drivers and food delivery workers in Shenzhen, Ningbo, Chongqing and other places went on strike to protest against disguised layoffs, low wages and exploitation by platforms.

③ Unpaid wages within the system : The wave of back wages has spread to teachers, sanitation workers, and even government-subcontracted workers. In Lishu County, Jilin Province, hundreds of retired teachers held a demonstration to protest the suspension of their pension payments.

(4) The dark side of business

① Extreme case of exploitation : An energy company in Guangxi was exposed for forcing battery production workers to take "lead removal agents" to pass physical exams, covering up the fact that workers' blood lead levels were too high and not turning on environmental protection equipment to save electricity.

2. "Malicious closure" : Some testing companies in Shenzhen suddenly forced their employees to resign without offering them compensation and inspected their personal belongings.

Conclusions and statements

From La Marx China , we support all the demands of the workers and the masses. As a first step in this support, we are committed to dismantling the censorship and cover-up that the regime attempts to impose on all these struggles and demands, making them visible and known to the public through widespread dissemination.