The inefficiency on display at Shaanxi Qinyang Changsheng Brewing Co. — a firm that hasn’t turned a profit since 2020 — might seem like an anomaly in a country where robots are replacing manual labor. But it’s a scene replicated across the nation, as company owners and local officials go to great lengths to protect jobs and keep struggling firms alive.

“If we shut down, our workers will lose their income and won’t be able to receive a pension,” said Megan Xiao, 35, daughter of the company’s chairman who helps with its marketing. The factory employs 300 workers including some under a government poverty alleviation program. “Closing would cause huge social problems for our area,” she added.

In the 1990s, policymakers set the stage for China’s rapid rise to become the world’s top manufacturer by shuttering thousands of unproductive companies and laying off millions of workers — tough measures that helped improve efficiency across the board. But as China’s $19 trillion economy slows, demand for many products is now saturated, and shoppers rattled by a yearslong property crisis are becoming more thrifty, even as prices fall.

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