On March 1, 2023, Liu Kun, Minister of the Ministry of Finance of the Communist Party of China, emphasized at a press conference that “the government’s tight schedule is not a short-term response, but a long-term policy that should be adhered to.” The picture shows a file photo of the Central Bank of China. (Mark Ralston/AFP/Getty Images)
[The Epoch Times, March 26, 2023](Comprehensive report by Epoch Times reporter Li Jing) The Chinese Communist Party (CCP) authorities have issued notices many times before asking governments at all levels to “tighten their belts” and prepare for “hard times.” Recently, many places in China have begun to clean up non-staff personnel in government agencies and institutions on a large scale, which has aroused widespread concern in the society.
Some Chinese scholars believe that non-staff and in-staff are closely related. After cleaning up non-staff personnel, it is possible to further reduce the number of in-staff personnel. In addition, local finances are tight. The epidemic has lasted for three years, the economy has declined, and fiscal expenditures have increased. Foreigners can reduce the financial burden.
Harbin cleans up non-staff personnel
According to a report by China News Weekly on March 25, the Office of the Institutional Establishment Committee of Harbin City, Heilongjiang Province recently released news that municipal government agencies and institutions are carrying out clean-up and standardization of non-staff employment. Once the news was announced, it immediately aroused widespread concern in the society.
In accordance with the locally announced “Harbin City-level Government Institutions and Institutions’ Non-staff Employment Clean-up and Standardization Work Plan” (referred to as the “Plan”), the non-staff employment clean-up and standardization work will start from March and end at the end of June.
According to the “Plan”, the implementation targets of this special rectification action are the existing employees of Harbin municipal agencies, municipal institutions, full-time industry personnel, workers, and self-employed personnel (collectively referred to as “non-staff employees”).
“Non-staff” is relative to the inside. The personnel in the staff are the staff in the staff, and generally refer to the official staff of all levels and types of agencies, public institutions, and some special institutions and other units that are borne by the state finance.
Analysis: Local finances are tight following cleaning up the non-staff or reducing the number
It is worth noting that before clearing out non-staff personnel, Harbin has carried out at least two rounds of reforms in public institutions in recent years, and has “severed” the establishment of government agencies and institutions.
Ma Liang, a professor at the School of Public Administration at Renmin University of China, said that not only in Harbin, but also in developed coastal provinces.
According to public reports, in addition to Harbin City, Tongcheng City in Anhui Province, Fangxian County and Jianli City in Hubei Province, and Wanning City in Hainan Province have already started to clean up non-staff personnel.
What signal has been sent for the cleaning up of non-staff personnel in various places? Nie Huihua, a professor at the School of Economics at Renmin University of China, believes that there are two reasons: First, the central government has decided to reduce the number of staff, and local governments will take action. Non-staff and in-staff are closely related. After cleaning up non-staff personnel, it is possible to further reduce the number of in-staff personnel. Second, local finances are tight. The epidemic has lasted three years, the economy has declined, and fiscal expenditures have increased. Cleaning up non-staff personnel may Reduce financial burden.
Ministry of Finance of the Communist Party of China: “Government tightness” is a long-term policy
On March 1, Liu Kun, Minister of the Ministry of Finance of the Communist Party of China, emphasized at a press conference that “we will not waver in insisting that the party and government agencies are in a tight situation.” .”
He also mentioned that the Ministry of Finance will strictly prepare budgets, reduce and cancel inefficient and ineffective expenditures, and will urge local governments to promote the construction of an assessment system for tight living conditions, and strive to reduce administrative operating costs.
In fact, as early as 2019, the CCP authorities have issued notices many times, asking governments at all levels to “tighten their belts” and prepare for “a hard life.”
China’s local governments are heavily indebted
According to the annual budget report of the CCP’s local governments, China’s provinces will spend at least 352 billion yuan on epidemic prevention and control in 2022. To make matters worse, the central government has implemented tax cuts to stimulate the economy, reducing local government revenue.
In addition, the central government’s crackdown on real estate developers has created a real estate crisis that has swept the country, which has also hit local government revenues. Revenues related to land sales typically account for more than 30 percent of local government revenues.
The sharp increase in fiscal expenditure and the sharp drop in revenue have put local governments in trouble. Local governments have been borrowing to fill the gap.
Hidden debt accumulated through local government financing vehicles (LGFVs) might more than double the total debt burden. Houze Song, a researcher on the Chinese economy at the think tank MacroPolo, estimates that the debt held by LGFVs has exceeded 70% of GDP.
According to a response to the proposal disclosed on the official website of the Ministry of Finance of the Communist Party of China, in view of the clear risk of local government debt, the principle of not helping the central government should be adhered to, so that “whoever owns the child will take care of it”. At the same time, establish a debt default disposal mechanism to share risks between debtors and creditors.
