In recent days, the sale of the “low-altitude economic operating rights” by Pingyin County in Jinan City, Shandong Province for over 900 million yuan has sparked heated discussion. Currently, there is growing concern from the public about the operational process of Pingyin County’s government in this transaction. Pictures questioning the process behind the scenes have been circulating online, with experts also questioning if it is a case of turning a blind eye to one’s own theft.
According to a report by mainland Chinese media on November 27, the public announcement for the 30-year franchise bid for low-altitude economic operations in Pingyin County, Jinan City was posted on the Jinan Public Resource Trading Center’s official website, but has since been deleted.
A screenshot circulating online shows that the bid award date for this project was November 26, 2024, with Shandong Jinyu General Aviation Co., Ltd. (referred to as Jinyu Company) winning the bid with a price of 924 million yuan. The bidding unit for this project is the Pingyin County Development and Reform Bureau.
A search on the Jinyu Company through QCC conducted by a reporter from Dajiyuan revealed that the company was established on November 4, 2024, with Chen Xu as the legal representative, registered capital of 200 million yuan, and registered address at No. 12 Hanshan Road, Yushan Street, Pingyin County. Its business scope includes general aviation services, civil airport operations, flight training, and sales of intelligent unmanned aerial vehicles, among others. The company is wholly owned by the Pingyin County Finance Bureau.
Dajiyuan contacted the county government and the finance bureau, but both directly avoided the interview, claiming that the county government could not provide a response to the matter.
While there has been no response from the government, Pingyin County’s government has been caught up in a maelstrom of public opinion accusing them of what appears to be “selling the sky”, especially as a new company established by the county finance bureau won the bid. This has led to speculations about the underlying intentions. Consequently, a diagram showing the overall operations process and the ultimate results to be achieved during the “sky selling” process has been circulating online.
The diagram shows: Step 1 – The finance bureau contributes 200 million yuan to establish Jinyu Company; Step 2 – Jinyu Company borrows 724 million yuan from the bank; Step 3 – Jinyu Company “buys the sky” from the Development and Reform Bureau, paying 924 million yuan; Step 4 – The Development and Reform Bureau hands over 924 million yuan to the finance bureau, with the 200 million yuan contribution flowing back to the finance bureau, and the 724 million yuan loan being whitewashed into fiscal revenue; Step 5 – Jinyu Company applies for bankruptcy, and the 200 million yuan fiscal funds are reported as losses to offset the bank’s 724 million yuan debt, turning into local debt; Step 6 – Local debt is successively reported to the state; Step 7 – Excessive currency issuance by the state to offset local debt; Step 8 – Inflation borne by the public.
Some netizens have expressed that the county government of Pingyin, in reality, transferred the operating rights from one hand to another enterprise, which can then package the project to secure bank loans. Subsequently, the loan proceeds legally flow to the county finance, easing its financial pressure. Whether the project will actually yield profits is of little concern, as local banks, and not major banks, are usually involved. If repayment is not feasible, the company can file for bankruptcy under legal procedures. All actions are conducted within regulated frameworks, and the money is spent after being withdrawn from banks.
Economic scholar Li Hengqing in the United States commented to Dajiyuan regarding the operational processes circulating online, stating that there could be many methods of operation, but the core principle is that all parties involved share the profits — the government and state-owned enterprises collude in deceit, supposedly watching over the theft.
Sun Guoxiang, a full-time professor in the Department of International Affairs and Business at Nanhua University in Taiwan, pointed out that this operation reveals certain issues. As airspace is a national resource, local governments have no authority to transfer usage rights, so Pingyin County’s actions may entail policy risks. Since the bidding company is wholly owned by the Pingyin County Finance Bureau, this operation has been criticized as a “left-hand transfer to the right hand”, with limited actual financial revenue effects. However, if the alleged operation circulating online is true, it ultimately concludes with local debt becoming an “uncollectible account”, only utilizing the current period when the CCP is attempting to resolve local debts by continuing to drain the treasury through all means available at the local level.
He also emphasized that the development of low-altitude economics requires a significant amount of infrastructure, such as takeoff and landing sites and air traffic management systems. Currently, these facilities are still in the early stages in China, requiring substantial investment and time to perfect. Furthermore, the opening of low-altitude airspace involves complex regulatory adjustments and safety supervision. Exploring and improving relevant policies are necessary to drive industry development while ensuring safety. Moreover, the low-altitude economy currently lacks mature commercial models. Enterprises face uncertainties in market demand and unclear profit models during the exploration process, necessitating verification and adjustment over time.
Economic scholar David Huang in the United States believed that Pingyin County is not a developed third- or fourth-tier small county town. The “sky selling” operation this time does indeed come under scrutiny, turning assets from one hand to another, hurriedly setting up a company, acquiring the so-called low-altitude usage rights at a high price, borrowing money from the bank, transforming debt into locally controlled income, and ultimately issuing ultra-long-term national bonds through a barrier, a completely plausible operation method.
Huang stated that by increasing local financial revenue through this method, the government is pushing problems into the future, perceiving it as a form of false trade that does not actually create genuine economic value. Instead, it leads to the loss of economic resources, converting productive funds into ineffective funds and damaging commercial reputation.
He believed that the Pingyin County government is merely speculating on concepts and models without great commercial value. Perhaps it is only a trial, hoping to promote local industrial upgrading. However, innovation seems to only remain a slogan and an idea due to fiscal pressure. The current situation does not seem likely to turn into reality anytime soon.