China’s economic troubles have some cities so tight on funds that they’re starting to dole out bizarre tickets, shirk their bills, and even slash health benefits for the elderly.
That’ in part because municipalities have struggled over the past few years to keep up with the costs of China’s strict COVID-control protocols. Pandemic-related costs were a huge catalyst in propelling China’s national debt balance to 123 trillion yuan, or $18 trillion last year, according to analysts’ estimates cited by CNN.
Those costs have left landed some cities in a precarious financial situation. Guangdong province, one of the largest provinces in China economically, said it spent a total $22 billion on testing, vaccines, and other COVID-fighting measures since 2020, according to government documents. Meanwhile, Beijing said it spent around $4.5 billion in 2022 alone on COVID-fighting measures, while Shanghai said that its residing district spent around $664 million last year.
That’s led some cities to start imposing bizarre fines in the hopes of scraping together enough cash to meet their obligations. Earlier this summer, three Shanghai restaurants went viral online after they were each slapped with a 5,000 yuan fine for serving cucumber in dishes without a license.
Chinese truck drivers have also been vulnerable to more ticketing. One driver told the Chinese state-owned news outlet Jieman that he had received 58 tickets for heavy cargo spanning the past few years, totaling around 275,000 yuan in costs.
And that trend appears to be several years in the making: At least 15 cities in China saw their income from fines and confiscations double or more in year of 2021, according to an analysis from the brokerage Yuekai Securities. Meanwhile, other sources of government revenue have declined: Income tax revenue dropped 3.5% last year, marking the largest drop since 1993, according to a CNN analysis of Chinese government data.
Some local governments have also decided to make drastic budget cuts in attempt to square their finances. The state-funded China’s Endangered Species Fund, for instance, says it hasn’t received cash from the government for about half a year.
“There are still bear cubs in the park that need to be fed, the mare is about to give birth and her food has been reduced by half, and the zoo’s staff have not been paid for six months,” the fund said in a post on Weibo, a popular Chinese social media platform.
In some cases, those cuts are affecting critical public expenditures, like health benefits for the elderly. The province Wuhan, for instance, has started slashing the amount of money it transfers to retirees’ personal health accounts by more than two-thirds, the New York Times reported in February, as well as increasing retirees’ deductibles.
Experts have warned of a bleak future ahead for China’s economy, which is straddled with big debt loads, a deflation problem, and still-sluggish demand from its two-year COVID-lockdown. The nation could be at risk of a “lost decade,” some economists say, a period of stagnation similar to the one that slammed Japan’s economy in the 1990s.
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