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Under Fiscal Pressure, Chinese Local Governments Have to Resort to Fines to Generate Revenue

China’s economic downturn, along with the Covid epidemic and other factors, has drained local government revenues. Mainland Chinese media reported that many local governments have been resorting to the indiscriminate use of fines to generate revenue.

China NewsWeek magazine reported on August 29 that, in recent year, in many areas, the revenue from fines, penalties, and confiscations has increased significantly.

In 2021 among the 111 cities that have publicized data on fines. 80 cities saw a rise in the revenue from fines. In 15 of them the fines more than doubled. For example, the fines in Leshan in Sichuan increased by 155 percent and Nanchang in Jiangxi by 151 percent.

Qingdao, the city, ranked Number One. In 2021. The revenue from fines amounted to RMB 4.377 billion ($ 0.63 billion), an increase of 127 percent compared to 2020. In addition to Qingdao, Jiangsu Province includes 6 of the top 14 cities in terms of the highest fine revenue.

For example, in order to raise revenue, traffic police in Inner Mongolia set up check points on highways and have fined the truck drivers for violations such as “not wearing seat belts,” although in fact the drivers had actually buckled up and did not violate any traffic laws.

The newspaper quoted a researcher who reported that the source of a significant portion of local fiscal revenue is from land sales. He said that, according to the National Bureau of Statistics,, the local government revenue from land sales in the first seven months of this year was only about 1/3 of  what it had been in the same period last year, putting pressure on fiscal revenue.

Source: Central News Agency (Taiwan), August 29, 2022