China is the world’s second-largest economy, powered by its role as the “World’s Factory,” contributing nearly 30% of global manufacturing output and serving as the largest exporter with a vast 1.4 billion consumer market. Its strengths include advanced infrastructure, rapid progress in technology such as AI, 5G, EVs, and renewable energy, along with the world’s largest foreign exchange reserves that ensure financial stability. While challenges like slowing growth, high debt, an aging population, and global trade tensions exist, China remains a resilient economic powerhouse, continuing to drive global trade, innovation, and investment through initiatives like the Belt and Road.
Beneath China's Economic Strength, Workers Struggle with Pay Cuts and Side Jobs
Though China's economy continues to post strong growth figures—like the 5.2% expansion in the second quarter—the story on the ground tells a different tale. Many workers, like Zhang Jinming, an employee at a state-owned real estate firm, are grappling with wage cuts and are forced to take on side hustles to stay afloat.
After his salary was slashed by 24%, Zhang now delivers food every night and on weekends, earning an extra 60–70 yuan per evening. “It’s not exactly respectable for someone at a state-owned company to be doing deliveries,” says the 30-year-old, who often works until 11:30 p.m. to make ends meet.
China’s export-driven growth has kept factories and ports running, but weak domestic demand is squeezing profits, leading companies to cut wages and delay payments. Even industries like autos and electronics—typically considered export powerhouses—are feeling the strain, as intense global competition and trade tensions weigh on industrial margins and fuel deflation at the factory gate.
State-owned employers, constrained by falling tax revenues and shrinking profits, are trimming costs and headcount. Non-performing loans are also on the rise as authorities pressure banks to extend more credit, adding stress to the financial system.
Economists argue that this imbalance—robust industrial output versus sluggish consumption—is rooted in policy. They call for a strategic pivot toward consumer-driven sectors like healthcare, education, and social welfare, warning that without such reforms, the economy may slow further in the latter half of the year.
Max Zenglein of the Conference Board of Asia labels it a “dual-speed economy,” where a booming industrial sector masks the struggles of everyday consumers and workers.
Wages Stalled and Bills Mount as China’s Growth Model Strains Workers
China’s economic resilience masks deepening domestic pressures, as low profitability and deflation—fueled by relentless capacity expansion in the manufacturing and tech sectors—begin to take a toll on incomes, according to Max Zenglein of the Conference Board of Asia. “What’s unfolding now in the trade war with the U.S. is coming home as a domestic issue,” he noted.
Salaries Delayed, Livelihoods Stretched
In cities and rural towns alike, workers are increasingly bearing the brunt. Frank Huang, a 28-year-old schoolteacher in Chongzuo near the Vietnam border, hasn’t received his salary in two to three months as his school waits on delayed government funding. “I can only endure,” said Huang. “If I had a mortgage, car loan, and family, I wouldn’t survive.”
Yun, a teacher from Linquan county in eastern China, is only receiving her base pay of 3,000 yuan, while the performance-based portion of her salary—around 16%—has been consistently withheld. After paying for fuel, parking, and property fees, she’s left with little for groceries. “If not for my parents, I’d go hungry,” she said. “Sometimes, I feel like begging.”
Delayed Payments, Rising Arrears
While there’s no official data on salary delays in the public sector, industries with heavy state involvement are seeing a surge in payment arrears. In the year through May, overdue payments jumped by 16.6% in the computer, communication, and electronics sector, and by 11.2% in auto manufacturing—both major pillars of China’s industrial policy. Similar trends were seen in utilities, with water and gas sectors reporting overdue payments up by 17.1% and 11.1% respectively.
These growing arrears highlight mounting liquidity stress—a consequence of policies that prioritize output and investment over demand and consumer welfare, said Minxiong Liao, senior economist at GlobalData.TS Lombard APAC.
As China's economic strategy continues to rely on industrial strength over domestic consumption, workers across sectors are increasingly caught in a squeeze between rising costs and delayed or diminished incomes.
Wage Pressure, Job Cuts, and Fading Confidence Undermine China's Consumption Goals
As income pressures mount and wage delays persist, Beijing is struggling to fulfill its promise to boost household consumption. Economists warn that prolonged deflation risks deepening the slowdown, as consumers increasingly postpone spending.
Minxiong Liao, senior economist at GlobalData.TS Lombard APAC, said the current trajectory suggests “slower growth ahead for China’s champion sectors,” as persistent overcapacity and weak demand continue to squeeze profitability.
Jobs Vanish, Spending Stalls
Huang Tingting, a 20-year-old from Jiangsu province—an export hub that has outpaced national growth—recently quit her waitressing job after business at her restaurant collapsed in April during peak U.S.-China trade tensions. With revenues plummeting, her employer asked staff to take four unpaid leave days each month. “I still have to pay rent and survive,” Huang said.
In the past, she could easily find another job within a day or two. But this time, she’s been out of work since June. "One recruiter told me the job I applied for already had over 10 applicants," she added, noting that the current job market is even tougher than last year’s.
As workers like Huang lose income and job security, and families like Zhang Jinming’s turn to side hustles just to manage basic expenses, confidence in the economy is fraying. The longer consumption remains subdued and employment prospects dim, the more difficult it becomes for China to shift toward a consumer-driven growth model—raising fresh concerns about the sustainability of its post-pandemic recovery.
Chinese state firm employee Zhang Jinming endures a 24% salary cut by delivering food each night after his day job—three relentless hours on a scooter, weaving through traffic until nearly midnight, just to earn enough for basic needs. On weekends, he works even longer, always glancing over his shoulder, hoping not to run into familiar faces from the office.
“It’s not exactly something I’m proud of,” he admits, wiping sweat from his brow beneath the fluorescent glow of a convenience store.
Once a proud employee of a prestigious state enterprise, Zhang now lives a dual existence—public servant by day, delivery rider by night. His world is shrinking under the weight of stagnant wages, growing debt, and the unspoken shame of survival. While China's GDP paints a picture of resilience, Zhang’s story tells of the quiet desperation bubbling beneath the surface—a life suspended between lost pride and necessity.
“I took on the workload of three people after others quit,” he says quietly, his eyes tired but determined. “But the bills don’t wait, and I can’t afford to fall behind.”
And so, every night, with a bag strapped to his back and hope stretched thin, Zhang rides—not just to deliver food, but to keep his dignity alive in a system where resilience means working twice as hard for half as much.
