Employment in China is set to fall for the first time since 2020, according to the S&P Global China Business outlook report. Staff cuts are set to be centered in the manufacturing sector. 

S&P Global forecast falling hiring plans even as it noted business confidence across China continued to improve in February 2025. The net balance of Chinese firms that expect business activity to expand over the next year rose from +15% last October 2024 to +17% in February. 

It was the highest degree of confidence since October 2023, though it remained lower than global sentiment at +26%. 

One driver was lower expectations of cost inflation. Other factors were also in the mix. 

“There were hopes that supportive state policies will boost the domestic economy and drive output and sales growth,” Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said in a press release. “New product releases and investment in new technologies were also cited as key opportunities, but there were also a number of challenges around the outlook.” 

One of those challenges was an increasingly uncertain global economic and trade landscape. Concerns have also arisen over the impact of tariffs. 

“While cost pressures were set to ease slightly — and remain much weaker than those projected globally — firms signalled cautious hiring plans,” Fiddes said. “Notably, job cuts at manufacturers are forecast to offset job creation at service providers, leading to the first drop in overall recruitment for five years.” 

S&GP Global’s data is based on a survey of approximately 12,000 manufacturers and service providers.