Chinese local governments rely on fines to “create income” for Beijing. The ludicrous fines keep coming one after another. After a vendor from Shaanxi province was fined 60,000 yuan or $8,600 for celery, a vendor from Heilongjiang province was fined up to 300,000 yuan or $43,000 for potatoes.

According to Chinese language media Xin Tang Ren, most of the “income” that comes from fines comes from local governments that have limited funds and have to “make ends meet.”

A variety of made-up fines

Henan Business Daily says that on August 20, the Daqing City in Heilongjiang Province punished several merchants for driving up prices and making it hard for the market to operate. A potato merchant in Daqing bought potatoes for 1.2 yuan per catty, and the operator was fined 300,000 yuan or $43,000 because the price was raised to 2 yuan per catty.

According to Zhengguan News, in October 2021, a vegetable grain and oil store in Yuyang District, Yulin City, Shaanxi Province, bought seven catties of celery from farmers. The Yuyang District Market Supervision Bureau removed and examined two catties among them. For the five remaining catties, the store sold them for 4 yuan or 60 cents each, so the net profit was less than 10 yuan or $1.40.

A month later, market supervision told the business that one of the celery indicators was above standard. The Yuyang District Market Supervision Bureau slapped a fine of 66,000 yuan or $9,400.

Also, there are several so-called “price gouging” cases, whereby the Daqing Market Supervision Bureau imposes a fine for selling daily vegetables for more than the maximum price difference rate. The fines ranged from 10,000 to 30,000 yuan, or from $1,400 to $4,300.

In this way, most people think that the price hike is fine, and they don’t understand why the Daqing Market Supervision Bureau punishes the merchants.

Mainland netizens have left comments: 

“This is a bit too much! As a customer, I think this price is fair,” said one.

“After deducting shipping fees, loading and unloading fees, and rotten wear and tear! Is this a conscientious price?” said another.

Then, “This price is not high. Should we only look at the purchase price but not the goods receipt price? Fresh vegetables have a loss rate. Don’t spend any money, and giving you all for free, is that then considered cheap?”

 Another said, “People who imposed illegal fines should also be punished.”

Besides fines for businesses and industries, there are other money-making tools— traffic fines, for example.

In many cities, the traffic police are not lenient when it comes to giving out fines, and they keep adding guards or cameras to punish more drivers and passengers. In Chengwu County, Heze City, Shandong Province, the traffic police even sold local truck drivers a “monthly ticket” for fines of 1,000 to 2,000 yuan, or from about $140 to $280.

Financial woes lead to heavy fines and heavy consequences

According to Radio Free Asia, when Chinese local governments punish the people at the grassroots level, they make people angry. Several local governments are raising money through fines because they don’t have enough money, possibly due to the strict zero-COVID policy. Jin Shan is a Chinese economic observer, and he said that the celery fine in Yulin, Shaanxi, was a landmark event that exposed the budget problems of local governments.

According to statistics from the mainland newspaper “Southern Weekend,” 80 out of China’s 111 cities, or about 72%, used fines to make more money last year. In 15 of them, the fines have been doubled. Leshan City in Sichuan Province and Nanchang City, the capital of Jiangxi Province, are two of the best, with income from penalties going up by 155% and 151%, respectively.

Lin Shengliang, a Chinese dissident, thinks that Chinese local governments will continue to punish people harshly because the economy is going down. He said that this is how the local government tries to make money, and things like this will happen more and more in the future, and there will be more sky-high fines.

Lin Shengliang said: “With the bursting of the real estate bubble, the closing of many businesses, and the withdrawal of foreign capital, the local government has to do the job all over again. They could only target small traders and hawkers because they are the most vulnerable. In a way, these small traders and hawkers are easier for them to take advantage of.”

Xu Tianchen, an economist with The Economist Intelligence Unit,  said that if desperate measures like these keep getting worse, public services could get worse, there could be more protests, and eventually, the local government could no longer pay its debts and default.

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