China is tightening the screws on the wasteful use of public money, calling once again for officials to cut back and free up more funds for real economic needs. - Reuters
SHENZHEN: Bored at a work meeting? For Chinese officials looking to rest their eyes on potted greens adorning conference tables, tough luck: They are now banned.
So too are alcohol and cigarettes at work meals, which might once have been a perk of the job.
China is tightening the screws on the wasteful use of public money, calling once again for officials to cut back and free up more funds for real economic needs.
For the first time in 12 years, it updated on May 18 a set of rules for officials to “strictly practise thrift and combat wasteful spending”. This is China’s latest move in its long-running austerity drive, which in 2025 has also seen a refresher of the Communist Party’s frugality code.
The penny-pinching comes as the world’s second-largest economy contends with rising fiscal pressures. Tax revenues are falling, government outlays are rising, and Beijing has to keep one eye on shoring up an economy facing volatile trade headwinds.
“Party and government organisations must take the lead in tightening their belts (guo jin ri zi)”, exhorted a front-page commentary in the party’s official newspaper on May 19 that accompanied the regulations’ release.
What are these rules?
The regulations in question were first rolled out in 2013, as part of President Xi Jinping’s effort to root out corruption and profligacy across the country.
They apply to a broad swathe of institutions – party, state and legislature included – spelling out how officials should economise on expenses such as official travel, office space, and cars.
Among the new updates are instructions to keep work meals, meeting venues and vehicles spartan. High-end dishes, cigarettes and alcohol are not to be served; meeting rooms should not be adorned with flowers, plants nor custom-made backdrops; and official cars are not be outfitted with luxury interiors.
Officials have also been asked to save on everything from meetings and courses to surplus food. Unnecessary meetings should absolutely not be held; in-person training courses should be conducted online where possible; and public institutions should do more to axe food waste in staff canteens.
And to drum the point home, propaganda units across the country have been asked to foster an atmosphere where “extravagance is shameful and thrift is honourable”. Institutions were also told to step up their monitoring of the regulations’ implementation.
Apart from cutting costs, the rules also highlight that the use of public funds for white elephant projects is prohibited. These refer to expensive “vanity projects” and public works undertaken just so officials can claim credit – outlays that have drawn Beijing’s ire for draining public resources and contributing to unsustainable debt.
One example, which state media outlets had previously profiled, is a ski resort in a poor industrial city that has just a one-month ski season each year, and already has two other ski resorts.
This was one of 16 unviable projects that the top official of Liupanshui, in south-western Guizhou province, advocated in a bid to impress his superiors, racking up over 150 billion yuan (S$26.8 billion) in debt over five years.
These dos and dont’s are distinct from the Communist Party’s “eight directives” – a code of conduct promoting frugality first released in 2012 for senior party officials. There are, however, overlaps in content, and some of the latest additions to the rules draw from the frugality code.
Why now?
That Beijing saw fit to dust off and update its rules on wasteful spending stems, at least in part, from its prevailing fiscal pressures, analysts tell The Straits Times.
This also comes on the heels of a separate austerity campaign launched in March to refresh party cadres’ knowledge of the “eight directives”. But even before that, calls for officials to “tighten their belts” have recurred.
“At present, local governments’ finances are generally facing difficulties,” said Dr Peng Peng, executive chairman of the Guangdong Society of Reform, a think-tank.
“Limited funds should be used to stabilise economic growth, confidence and expectations … so there is a certain degree of urgency to tighten the tap on non-essential expenditures,” he said.
In the first four months of 2025, the Chinese government’s revenue fell by 0.4 per cent from the previous year, while expenditures jumped 4.6 per cent, data from the Finance Ministry showed.
Takings from taxes – which form a key part of government revenue – shrank 2.1 per cent during the same period, on the back of a 3.4 per cent drop in 2024. These have been dented by a weak property market, falling prices, and tax breaks that the authorities doled out to help businesses.
But even as getting public institutions to economise will go some way towards relieving local governments’ fiscal pressures, this is “not a fundamental solution” given that their share of overall spending was not too high, Dr Peng said.
The western municipality of Chongqing, for example, reported that austerity measures had saved it some 5.4 billion yuan in expenses in 2024. This was less than 1 per cent of its total outlays that year.
Anecdotally, the updated regulations appear to have drawn voices of support, including from China’s top liquor distillery, a state-owned company, even as its sales could take a hit. Kweichow Moutai’s share price fell by some 2 per cent on May 19, the first day of trading after the rules were announced.
“I approve of the regulations from the bottom of my heart,” said Zhang Deqin, the company’s chief, at its annual shareholders’ meeting that day. The evening before, a sit-down banquet for shareholders was turned into a buffet meal, and the company served blueberry juice instead of its customary Moutai liquor, local media reported.
The curb on drinking comes shortly after Chinese anti-corruption inspectors said last week that one local official had died after imbibing baijiu (liquor) with colleagues – at a banquet held during a training course on the party’s “eight directives”.
“The rule on alcohol will save the stomachs and livers of many civil servants,” said a Weibo user from Guangdong. “My civil servant friends are all very grateful.”
But there were also critical voices, some of which argued that the austerity measures might weigh on the domestic demand which Beijing hopes to stimulate.
“Like this, it will be even harder to bring up consumption,” wrote one Weibo user from Shanghai, in a post that has been liked more than 1,000 times. - The Straits Times/ANN
