New Delhi, Nov 14 — China's economy is facing growing structural challenges, including a pension funding squeeze, rising local government debt, and weak consumer confidence, a new report said.
The report from Uganda-based PML Daily said the structural problem in China's economy is evident from more workers suspending pension contributions intensifying concerns about the long-term sustainability of retirement funds.
Authorities tried to broaden participation among gig workers, a group estimated to account for a significant share of China's labour force but with relatively low enrolment in social security schemes and contribution also dropped.
The report cited a study in Shanghai, which showed the minimum combined monthly contribution, about 2,712 yuan, almost equal to the city’s minimum wage of 2,740.
"Roughly 58 million people reportedly paused their contributions in the first quarter of 2026 alone," the publication said.
Demographic trend also weighs on China's pension funds, as the country hosts 324 million people aged 60 and above by the end of 2025, while the country's working-age population has been shrinking for more than a decade.
Economic growth is slowing, with economists expecting China's economy to expand about 4.4 per cent in the third quarter and around 4.5 per cent for 2026, near the lower end of the government's official target range.
“A 2019 projection by the Chinese Academy of Social Sciences saw the main pension fund running dry around 2035, and the post-pandemic slowdown has made that outlook worse. Raising the retirement age and widening mandatory contributions extract more from the same shrinking base. They do not fix the base,” the report said.
Property market that once made up about 30 percent of the economy was the revenue engine for local governments but that engine has stalled, and Vanke, once among the country’s largest developers, is under formal debt restructuring pushing local government debts higher.
Communist Party overlooks implementing reforms, as it only focuses on raising the contribution base, delaying retirement or sending its data machinery after informal workers.
"Its taste for control over markets and its low tolerance for criticism keep the debate on real fixes narrow, whether a stronger safety net or household-led consumption," the report noted, also adding that state-level corruption compounds the problem.