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To your first question, 996 was already banned by the Supreme Court back in 2021!

All the guilty internet companies “welcomed” the court ruling and announced that overtime is only “on a voluntary basis” and will be “properly compensated”.

And yet the working hours have only gone up since 2021. In fact, just earlier this year, the government tried again to enforce an 8-hour work day because the EU threatened to ban Chinese goods with the EU Forced Labour Regulations, a whole bunch of manufacturing firms again “welcomed” the policy, and yet nothing seems to have happened afterwards.

There are a few factors behind why nothing much has changed, and they’re mostly related to motivation and enforcement issue:

1. There is split opinion on the decision among employees - while some see long work hours appropriately as exploitation, others see overtime wages (150-200% hourly rate) as their way to make enough money and leave the company early. Employment is mostly transient with these companies, and for many people, you want to earn as much money as you can in your 20s and maybe even early 30s when you’re still physically capable, hoping that you could retire earlier than your peers, or earn enough to start your own business.
2. “Voluntary coercion” - with so much unemployment around, employees are more afraid of losing their jobs and fear that not “volunteering” for overtime would mark you as an unproductive worker to be laid off in the next cycle. In China, the competition is so intense that for most jobs (as you’ve said, but it’s not perceived that way), you are replaceable. You’d rather grind hard to keep your job than to lose it altogether, because there is no social safety net when you’re unemployed (hence Chinese households prefer save than to consume, to prepare for such unfortunate incidents).
3. The government depends on private corporations especially during economic downturn - with many budding economic problems that accompany falling export revenues due to tariffs and external pressures, property market crisis, debt crisis etc., the government relies on the private sector now more than ever to prop up a slumping economy. Enforcement is especially tricky because those companies might just implode altogether with entire supply chains and could easily spiral into mass unemployment and recessions if we’re not careful. Workers have to be properly compensated even when work hours are reduced, and that cuts into the corporations’ operating costs. Meanwhile, if the workers are not allowed the opportunity to maintain their wages, they will reduce consumption which is equally bad for the economy.
4. Low penalty for corporations while the costs of arbitration for employee grievances are high - some companies would rather pay the penalties because it is still cheaper than implementing work hours reform that could cut into their profits. Additionally, in China, there is no such thing as a trade union as you have in the West. That means an employee will have to file grievance with the civil court, and for most people, this is simply an unthinkable option unless you believe you have a very strong case to fight it out in the court.

For your second question, please see my response to another user on this comment thread.