China’s economy expanded 5.2% in the second quarter, driven chiefly by export-oriented factories that continued to run at full capacity despite Washington’s 145% tariff on Chinese goods. The supply-side momentum has given Beijing room to combat deflation, but it is masking a sharp deterioration in household incomes and consumer demand. Companies across key industries are trimming wages and delaying payments as profits shrink. A state real-estate employee in Beijing, Zhang Jinming, said his monthly salary was cut by 24% to 4,200 yuan ($585), prompting him to deliver food for up to three hours each night to earn an extra 60–70 yuan. In Guangxi and Anhui provinces, teachers reported going two to three months without pay or receiving only their minimum 3,000-5,000-yuan base salaries. Corporate balance-sheet stress is showing up in a surge in accounts-receivable arrears. Outstanding payments in the computer and electronics sector jumped 16.6% in the year to May and rose 11.2% in autos, while utilities recorded overdue bills up 17.1% in water services and 11.1% in gas. Economists warn that rising non-performing loans and a growing cohort of young people neither working nor studying could undermine growth later this year unless policymakers shift support toward consumption-driven sectors.