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Non-productive Activities Add to the Burden of China’s Private Sector

In addition to a lack of corporate confidence, China’s private enterprises are often called upon to participate in “political studies.” They are forced to invest in non-productive activities, negatively impacting their operational efficiency.

One private enterprise employee told the Central News Agency that, because she was the only Communist Party member in the group and because she is honest and reliable, the entire company relied on her to handled different political activities such as taking photos, compiling reports, and organizing training. Although most of the events are for show, they still require a considerable amount of time.

An economist who did not want to be named told the reporter that China is facing the pressure of economic growth, but the current practices only make the situation worse. Under the banner of “the Party managing everything,” companies frequently hold political studies. Private enterprises also have Communist Party branches and are mandated to organize Party activities. All these practices increase spending and reduce production.

Xiang Songzuo, a professor at the Renmin University School of Finance, mentioned in an article in October that security inspections and non-productive activities are now everywhere. They are all fiscal expenditures. The fiscal revenue growth in the first three quarters of this year was only 3.3 percent, while the expenditure growth reached 9.4 percent. “On one hand, there is a serious shortage of economic vitality; on the other hand, non-productive fiscal expenditures are growing rapidly.”

Source: Central News Agency, November 3, 2019