Goldthorpe’s class theory suggests that social class arises from employment relations in industrialised societies. This article assesses whether class in urban China can be approached from the same perspective by addressing three issues: (1) whether employment relations can capture China’s class structure; (2) how differently class is shaped by occupational structure in China; and (3) how useful class is to help us understand income inequality. Based on a recent Chinese social survey, the analysis finds three clusters of Chinese employees that fit into the ‘service’, ‘intermediate’ and ‘labour contract’ class typologies suggested by Goldthorpe’s class theory. Also, there is evidence that class links to occupational structures in a similar way between Chinese and western societies. Finally class, when directly measured from employment relations, displays a reasonable degree of explanatory power for inter-class income inequality whereas the Goldthorpe class classification fails to differentiate between intermediate and labour class positions.