Travel by bike, bring your own cup: China imposes frugal life on public servants

China’s President Xi Jinping first launched the frugality campaign in 2019. (Reuters)
China’s President Xi Jinping first launched the frugality campaign in 2019. (Reuters)

Summary

Local Chinese leaders have been adjusting thermostats and using cheaper paper to heed calls from Beijing to save money.

When China’s Communist Party put officials on notice that they must get used to tightening purse strings for years to come, the response was swift.

At least 21 provincial-level governments trimmed their budgets for official vehicles this year. The governor of Guizhou province pledged to cut his administration’s operating expenses by 15%. An official in the central province of Hunan urged colleagues to become “red housekeepers" who honor the party’s revolutionary roots by ensuring cost-efficient governance.

No penny was too small to pinch.

One statistics bureau in the southern province of Yunnan told staff not to set thermostats below 26 degrees Celsius, or 79 degrees Fahrenheit, in the summer. Authorities in Inner Mongolia said government agencies should minimize the purchase of new equipment by repairing and reusing items such as desks, chairs and computers. The southwestern city of Yibin asked officials to print routine documents on lower-quality paper.

China’s local government finances have been creaking under heavy debts for years, but three years of zero-tolerance efforts to contain the Covid-19 pandemic depleted state coffers in many areas. China’s post-Covid economic hangover and slumping property market exacerbated the problem by driving down land-sale revenues that many localities depend on. In recent months, two major credit-ratings firms downgraded their outlooks on China’s credit rating to negative from stable.

The scope of the belt-tightening reflects the extent to which China’s new economic realities have reverberated across the country. Tepid growth and a weaker job market have buffeted a swath of the population—from ordinary people to government workers—and forced many to adjust to doing more with less.

Chinese leader Xi Jinping first launched the frugality campaign in 2019 as part of a push to curb government waste. Beijing ramped up the effort in December, telling officials to embrace belt-tightening for the long haul. “Party and government agencies must get used to living frugally," said the readout from the party’s annual economic-policy conclave.

Such exhortations soon proliferated in party and state-media messaging, which called on cadres to pay attention to the leadership’s use of the term xiguan, or “getting used to."

“Living frugally isn’t a temporary need or a tactic of expedience, but a principle and policy that must be adhered to for a long time," the party’s top disciplinary agency, which Xi has used to enforce compliance with his policies, said in January. “Spend every penny on crucial areas, and spend it to maximum effect."

In recent weeks, many local governments have issued detailed directives on how to “get used to living frugally," telling staff to save money by using public transport, buying cheaper stationery and printing documents in black-and-white and on both sides of the paper. Others ordered bureaucrats to finish their food, cut back on work trips, as well as repair and reuse hardware from official cars to office furniture.

Beijing also tightened controls over infrastructure spending in highly indebted regions, and lowered its budget deficit target to 3% of gross domestic product for this year, down from 3.8% last year, in a show of the government’s commitment to fiscal discipline.

While the belt-tightening isn’t likely to significantly alleviate fiscal pressures, the messaging serves a political purpose.

“It’s just performative—they are talking about small things when they should be focused on fixing the big things," such as getting local governments to raise revenues and reduce debt, said Christine Wong, an expert on Chinese public finance and a visiting professor at the National University of Singapore’s East Asian Institute.

“You’re talking about saving a few billion here and there," which are trifling amounts compared with the Chinese government’s annual general public budget of about 28 trillion yuan, she said, equivalent to around $3.9 trillion.

The frugality campaign is essentially “an admission that money is tight," Wong said. “It’s also saying that the public sector is sharing the pain—everybody is earning less money and having to do with less."

Senior officials and state media have reinforced the message with appeals to patriotism, telling public servants that frugality amounts to loyalty and the savings will help fund projects that benefit ordinary people and propel China forward.

The goal is to scrimp on routine expenses so that the government can “concentrate financial firepower to do big things," China’s Finance Minister Lan Fo’an told reporters in March. “Every penny that party and government agencies save is one more penny that can be spent on people’s livelihoods."

Later that month, the finance ministry issued guidance urging government agencies to tighten control over spending and track their finances more closely. For example, officials should rein in costs related to overseas travel, vehicular transport and official receptions and meetings, such as by convening meetings online rather than in person and using government facilities rather than commercial venues, the ministry said.

Party authorities have also played up frugality as a cultural and revolutionary tradition. The party’s disciplinary agency has cited party lore on the simple lives of past leaders, noting Mao Zedong reputedly had his pajamas patched up 73 times, while another revolutionary elder, Chen Yun, used the same suitcase for 62 years.

The central government also hopes the austerity campaign can help curb the moral hazard that stems from efforts to bail out heavily indebted regions and avoid a broader financial crisis, experts say. Beijing is telling local governments “that they should first and foremost rely on themselves," said Tianlei Huang, a research fellow at the Peterson Institute for International Economics.

“Many localities are very good at wasting money, because they for a long time were not subject to any hard budget constraints," Huang said.

In practice, though, the quest for frugality has often devolved into nickel-and-diming on routine expenses as cadres race to demonstrate compliance with the campaign.

At one state-owned ironworks in Yunnan, party officials urged employees to reduce annual expenses on drinking water by 30% from last year’s total of 270,000 yuan. “Strictly control the consumption of bottled water in each work unit," the plant’s party committee said in a notice, encouraging employees to bring their own cups rather than use disposable ones.

China’s agency that oversees state procurement and logistics, the National Government Offices Administration, recommended recycling office waste and reminding staff to save electricity and water. “The supply of disposable office supplies such as paper and pencils must be controlled," Lin Li, an official in the administration, wrote in a recent article.

One county in the northern region of Inner Mongolia proposed “green" transportation guidelines to cut down on the use of official vehicles, encouraging government workers to walk distances of up to 1 kilometer (around 0.62 miles), ride bicycles when traveling between 2 kilometers and 5 kilometers and take public transport for longer distances.

Such measures will yield only modest savings and “in the grand scheme of things, this does not matter that much," according to Huang. The government must still find ways to put the money to better use, he said.

Officials say they want to do “big things" with these savings, “but what are those big things?" Huang said. “I don’t think there’s a very clear definition."

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