ECONOMY

Billions in China’s Pension Funds Misappropriated by Local Governments

Published: Jun. 27, 2025 7:59 p.m. GMT+8

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The misuse of pension funds comes as localities face greater fiscal strains due to declining tax revenue and a prolonged real estate slump. Photo: AI generated

China’s top auditor found that local governments have misappropriated tens of billions of yuan of state-run basic pension funds for various purposes, including debt repayment, as they face mounting financial strain.

The National Audit Office (NAO) reviewed 4.1 trillion yuan ($576.9 billion) of basic pension funds — covering public and private sector employees as well as urban and rural residents — across 25 provincial-level regions, identifying around 60.2 billion yuan in improperly used funds, according to the State Council’s 2024 annual audit report released Tuesday.

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China’s top auditor found about 60.2 billion yuan in basic pension funds misappropriated across 25 regions, mainly for debt repayment and essential government operations.
Nearly 3 million vulnerable people were left uninsured or lost pension coverage due to these fund misuses.
Local governments face rising fiscal strain from declining revenues, growing spending, and hidden debts, prompting calls for improved pension fund management.

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