The CCP’s local finances are in a serious crisis. There are reports that they are using various forms of fines to make money, and people are complaining. The Chinese Communist Party’s State Council recently asked local governments to “strictly prohibit the use of fines to generate revenue.”
Scholars believe that the CCP is worried that its ruling base is shaken, and has issued administrative orders to regulate local governments. But they are not useful and social problems of China remains unresolved.
On August 17, the CCP’s State Council issued a decision prohibiting “the use of fines to generate revenue” and it prohibits “the use of fines to rank or as an indicator to evaluate work efficiency.”
The council issued the ban when local governments started imposing additional fines.
According to Sohu, as of August 19, the Zhengzhou Municipal Administration had posted 740,000 notices of parking violation reminders. On August 21, the traffic police and the Zhengzhou Municipal Administration launched a combined round of parking order redress.
In Chengdu citizens also commented online that if you are illegal parked you’ll get a 10 minute warning to move your car. If you follow the instructions you won’t get a ticket. But it seems the drivers are getting the notice half an hour after the 10 minute waring has passed.
Local governments rely on property sales and fines to generate revenue
The NetEase site recently published articles titled “Four Things That Tell You How Local Governments Are Now In Money Shortage” and “Local Finances Entering a Very Magical Time,” revealing how money-strapped local authorities have generated revenue— they sell properties and impose fines. The two articles have been deleted and show a “404” error. However, the titles of the articles can still be seen in the search results.
A similar article persists on Zhihu, a popular social Q&A site in mainland China. It mentions that the traffic department in a county in Shandong invented a “promotional” ticket. This means that truck drivers can prepay a monthly fee of 1,000 to 2,000 yuan (about $146-$291) and they can drive for a month hassle free and not worry about being overweight. NetEase also posted the same content.
The district also sells tickets, buy 10 get 2 free, pay for tickets for 10 cars, you can get “monthly tickets” for 12 cars. It is reported that “monthly tickets” are still very hot, and local truck drivers have basically bought them.
In addition to fines, the local government also sells assets to generate revenue. In Sichuan officials offered a package of a scenic spot’s “booth rights + sightseeing tour buses” operation for 30 years including the Leshan Giant Buddha.
Langzhong District in Nanchong City, Sichuan Province, once announced an auction, franchised sale of school canteens, academia, and state-owned companies for the next 30 years, but later it was suspended.
In 15 cities, revenue from fines and property sales increased by more than 100% compared to the same period last year
Local governments make a lot of money from fines. According to a recent report by Southern Weekend, revenue statistics of more than 300 provincial cities nationwide in 2021, of the 111 provincial cities that have been published, 80 cities show an increase in revenue during 2021, accounting for more than 72%. Among them, the revenue from fines of Qingdao topped the list with 4.377 billion yuan ($638.16 million), up 127% compared to 2020.
There were 15 cities with an increase of more than 100% compared to the same period last year, and Nanchang, Jiangxi, had the largest increase of 151%.
The Epoch Times quoted netizens who criticized the increasingly harsh and one-sided fines, saying that it appears that the more corrupt a place is the more shameless their behavior is.
Currently, the city’s financial data disclosed by the government can be extracted at random, and thus the severity can be seen. The expenditure-to-revenue ratio of Nam Sung city is 3.7 times, the expenditure-to-revenue ratio of Langzhong district, Sichuan is 3.6 times, while the spending ratio of Foping district, Shaanxi province according to The Epoch Times is 20 times the revenue.
Analysis: The CCP is afraid that the people will revolt
Chen Weijian, a veteran in the media and emeritus editor-in-chief of Beijing Spring, told The Epoch Times that each region now has different fines. The notice of the State Council of the CCP cannot completely eliminate the fines, it is unknown how many times this administrative document had been issued.
He believes that if the CCP State Council really wants to put an end to the turmoil, the first thing to do is to get rid of all informal institutions such as urban management and neighborhood security, the ministry most of these people rely on fines to survive.
He further said that when local governments make a lot of money from land finance, they have expanded their staff many times. In addition, government office buildings in other places are very large and lavish, and the maintenance costs are also very high, and now it is unbearable. Not only are many of the gray incomes (that is overtime allowances and unexpected bonuses) of civil servants no longer available, but some people are not even getting paid.
Li Yuanhua李元华, a former associate professor at the Capital Normal University in Beijing, told The Epoch Times that local governments often rely on land sales or leases for financial support. But due to the collapse of real estate market, the financial income is no longer available. The economic recession, pandemic, and many other issues, have caused many private businesses to close, and the local government wants to cut leaks (referring to the act of exploiting people) but is unable to do so. The local governments are so poor that they can’t pay salaries, relying only on revenue by selling their possessions, properties, and fines, and people are very angry.
He believes that the central government cannot solve the local financial problems. They are afraid of the people’s anger and resistance, which directly threatens their rule. They try to address peoples’ grievances but they have to keep a low profile.
“Just like ‘monthly fine’ of truckers has appeared, this is the same method as robbery. As long as you get the money, nothing else matters,” he said.
Wu Zuolai, a scholar living in the U.S., recently argued that the Communist Party must solve pressing problems by the Party method and the command method. But while they solve it, if they solve this problem, they will create more problems. Therefore, a system like the CCP is one with no solution.
Feng Chongyi冯崇义, a professor at the University of Technology Sydney, also told The Epoch Times not long ago that from an economic perspective, the CCP has reached the point where it is impossible not to die. Currently, Xi Jinping’s era is one in which the CCP is unwilling to retreat from the historical arena.