As local governments are running out of money, they have started to try creative ways to cut spending. One option is to shrink the government. In Loufan County, Shanxi Province, a pilot reform county in the province, announced that it will cut down the county-level Party offices from nine to six, county-level government offices from 26 to 16, and county-owned business units from 133 to 104.
In Heilongjiang province, Yichun city and Qiqihar city have started converting a Street Office (街道办事处) into a Township Office (镇). China differentiates people into urban dwellers and farmland dwellers, where the former enjoy many more benefits than the latter. Townships are usually set up for farmland residents, while the street offices are inside a city and thus their residents are urban dwellers. Therefore, local governments have decided to convert Township offices into Street offices, which will then enjoy better treatment (government spending) in the areas of education, healthcare, and culture events, etc. However, the recent actions of reverting Street Offices back to Townships indicates that local governments are low on population and therefore are consequently losing revenue (budget). For example, Yichun City lost 270,000 people between the 2010 census and the 2020 census.
Sources:
1. Sohu, February 3, 2023
https://www.sohu.com/a/636769105_12017948423
2. Sina, February 10, 2023
https://k.sina.com.cn/article_6863045962_19911c54a019010kxn.html?from=movie