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RFA Chinese: Chinese Local Governments Lose Control over Deficits

Radio Free Asia (RFA) Chinese Edition recently reported that, based on the numbers that the Chinese National Bureau of Statistics released, as of November, provincial governments had across the board deficits, including some wealthy provinces. Even Shanghai, the most financially sound city, had a deficit of RMB 40 billion (around US$5.8 billion). Beijing had a deficit of over RMB 100 billion. The worst cases were Sichuan and Henan provinces. Each had a deficit that was five times that of Beijing’s. Several provincial governments have already issued internal orders to reduce spending immediately. The city of Shenzhen (part of Guangdong Province) which is not yet on the deficit list, is also cutting government spending drastically. Most of the items on the budget were forced to take a minimum ten percent cut. In practice, however, many local government branches have found it really hard to reduce spending. Some have even requested budget increases.

Source: RFA Chinese, January 10, 2020