All 31 of China’s provinces have released their 2026 budget drafts, each echoing the central government’s directive for Party and government agencies to “live frugally” by cutting administrative and non-essential expenditures. The push reflects an intensifying fiscal squeeze that has been building for years, with some analysts arguing that curbing wasteful local government investment would yield even greater savings than trimming routine spending.
The “living frugally” policy generally refers to reductions in the so-called “three public expenses” — overseas official travel, official hospitality, and government vehicle costs — along with other non-urgent outlays. According to a report by Yicai on February 27, the approach has become a long-term policy directive, particularly as the gap between fiscal revenues and expenditures has widened in recent years.
Several provinces reported concrete results. Tianjin cut 5.87 billion yuan (approximately $806 million USD) in non-essential spending in 2025. Jiangxi saw its three public expenses fall 21 percent, large-scale provincial renovation spending drop 41.9 percent, and conference fees decline 36.4 percent. Shaanxi pledged to further slash budgets for festivals, trade shows, and forums, while Hebei committed to continued reductions across meetings, training, and outsourced service fees.
An anonymous local fiscal official noted that reining in ineffective and hastily launched investment projects — those started without adequate planning or assessment — would save considerably more public funds than cutting general administrative expenses.
The frugality drive traces back to March 2019, when President Xi Jinping explicitly linked government belt-tightening to improving ordinary citizens’ lives. The policy gained further urgency during the COVID-19 pandemic as local finances deteriorated. It was formally institutionalized in May 2025, when the Party and State Council issued a revised regulation on strict economy and opposing waste, moving the directive from a slogan into enforceable policy.
Source: Central News Agency (Taiwan), February 27, 2026
https://www.cna.com.tw/news/acn/202602270112.aspx