This seems like a good way to burn out your entire workforce. Assuming 8 hours of sleep a night, that leaves just 40 hours of free time a week, much less if you consider going to/from work, household chores, and all the other daily things that eat up your time. My guess is that this strategy might be more productive in the short-term, but less so in the long-term

Along with burnout, I would imagine there's a lot of "looking busy" if you have to stay at work for 12 hours each day.

The culture of "face" and personal image is quite strong in China, and my hypothesis is that the 996 system provides signaling of "dedication" and "hard work" from leadership and employees, but the system doesn't do much in terms of achieving business outcomes. (in the sense that output is not the same as outcomes).

I may be wrong though. After all, maybe your desired outcome is to signal "dedication".

Business owners don't care. 1.4 billion population, they can burn out as many as they want. They'll always be some poor nong from the countryside who's the first in his family to attend college and will work for pennies so he can send some money back.

The competitive pressure in an overpopulated country is real.

Is this phenomenon unique to China? Many of us in my current company are unofficially on a 996 kind of system as we are nearing our release date.