While Washington continues its drastic cuts to the US civil service and public spending, the Chinese government is doubling down on its own austerity campaign.
On Tuesday, People’s Daily, the Communist Party mouthpiece, published a long front-page article recapping an eight-point code of conduct outlined by President Xi Jinping in December 2012.
It said Xi had led by example in the decade-long campaign against wasteful government spending and people who only pay lip service to their work.
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“The eight-point regulations are effective iron rules for the long term ... They are not just for five or 10 years,” the article said.
The campaign is not only designed to prevent wasteful spending on unnecessary projects and hires, but also to crack down on officials using public money for their own benefit, for example on lavish banquets – the reason why the Communist Party code of conduct is being invoked in the austerity campaign.
The nationwide campaign started right after the annual “two sessions”, the meeting of the national legislature and top political advisory body, earlier this month.
It will run until late July, according to a circular issued by a top-level leading group led by Cai Qi, the fifth ranking member of the party hierarchy.
The two sessions also saw the central government raise deficit spending to 4 per cent of GDP for the first time in recent history as part of its efforts to stimulate the economy in the face of increasing external risk. But at the same time, Beijing needs to ensure that money is being spent in areas that really need it.
A Beijing-based political scientist said that while US President Donald Trump’s mass firing of federal workers was primarily designed to reduce the country’s mounting debts, Beijing’s latest austerity call was a stern reminder to local governments not to waste the money raised from this year’s special government bonds issuance.
“Beijing and Washington both face mounting debt concerns, but they have to take different approaches as the two superpowers’ political systems are drastically different.
“Trump can hire and fire as the US employment system is more flexible,” the political scientist said, speaking on condition of anonymity due to the sensitivity of the subject.
According to the US Treasury Department, the federal government has US$36.22 trillion in debt, resulting in a debt to GDP ratio of over 120 per cent.
In the latest two sessions, the National People’s Congress approved 1.3 trillion yuan (US$179 billion) in ultra-long-term special government bonds, 500 billion yuan in bonds to support capital replenishment for large state-owned commercial banks and 4.4 trillion yuan in bonds to roll over local government debts.
Based on budget plans, international rating agency Fitch estimated in a March 7 research report that China’s debt ratio was likely to rise to the “high-60s per cent of GDP”.
According to court documents, the US Department of Government Efficiency (Doge) has removed about 25,000 federal workers as part of the campaign led by Trump and his billionaire ally Elon Musk to dramatically shrink the scope of the federal workforce.
The campaign has caused widespread public anger amid claims of reckless and ill-judged firings, but Trump has said he would be “pretty much satisfied” with the cuts within a few months.
“Our country was riddled with fat and we’re getting rid of the fat,” he said.
The political analyst said: “While the Chinese bureaucracy has fat too, it is much harder for Beijing to conduct similar cuts. It has to rely on the old anti-extravagance campaign to remind local governments not to waste the new money from government debt issuance on unnecessary banquets.”
In recent weeks, the Central Commission for Discipline Inspection (CCDI), China’s top anti-corruption and enforcement body, has republished up to 80 detailed rules relating to the code of conduct, including a complete ban on party and government meetings in 21 popular visitor attractions such as Chengde Mountain Resort or Wutai Mountain.
“Working meals should serve the usual dishes in a home-cooking style. High-end dishes such as shark’s fin, bird’s nest and dishes made from wild protected animals should not be served, along with cigarettes and high-end liquor. Meals shall not take place in private clubs and luxurious dining venues,” one of the rules states.
“According to the CCDI’s regular monthly announcement about violations of these eight points, there are signs of officials finding ways to circumvent the regulations, like setting up exclusive dining under the name ‘canteen’, and hence, Beijing saw a need to tighten the screws periodically,” said Xie Maosong, a senior researcher at the National Institute of Strategic Studies at Tsinghua University.
The campaign was also important for China to deliver on the goals of the latest five-year plan, now in its final year, Xie added.
“Besides the anti-extravagance part, the eight-point regulations also set standards for how officials should conduct efficient fact-finding trips, coordination meetings and receptions. Beijing wants all the party officials to put their hearts to work as this year is the last year to deliver the goals of the 14th five-year plan,” Xie said.
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