Recently, the financial data of Dafang County, Bijie City, Guizhou Province has been circulating on the internet, drawing attention from the public. The data shows that in 2023, the expenditure on salaries for official staff in Dafang County reached 2 billion yuan, the expenditure on temporary staff reached 460 million yuan, and the expenditure on retirees reached 170 million yuan, totaling 26.3 billion yuan. Many netizens have raised doubts about the long-standing imbalance in the grassroots financial system of the Chinese Communist Party.
According to information cited by the WeChat public account “Commonsense Dissemination Room” from “Half-Month Talk,” in 2022, the tax revenue of Dafang County was only 414 million yuan, but the expenditure related to staff salaries reached 26.3 billion yuan in 2023. With a permanent population of approximately 800,000 people, Dafang County has about 44,000 people financially supported by the government, equivalent to one person relying on government support for every 14 individuals. The report describes the financial operation of the county as a pattern of “paying the bill in the east, coordinating in the central region, and consuming in the west.”
Wang Mu, a financial scholar from Gansu (alias), mentioned in an interview that many county towns in China now mainly rely on central government transfers to maintain operation as local industries are weak. Local finances rely heavily on external economic development and are struggling to sustain the basic administrative system.
He stated, “In the past, local governments could rely on land sales revenue to cover expenses. However, in recent years, with the decline in the real estate market, land finances have become unsustainable. I have heard that many county-level finances have issues with paying salaries on time and are now borrowing money everywhere, with many areas compressing their expenses to ‘ensure salaries and social stability.'”
The report revealed that the official staff salary expenditure in Dafang County is around 2 billion yuan, while temporary staff salaries amount to approximately 460 million yuan, and retired personnel expenditure is about 170 million yuan. In 2020, the State Council inspection team of the Communist Party of China previously reported Dafang County’s problems of wage arrears for teachers and misappropriation of education funds, sparking public concern at that time.
In recent years, the Chinese Communist authorities have recruited a large number of grid management personnel, assistant managers, and dispatched laborers to maintain grassroots social stability, resulting in a massive “non-staff system” and heavier local expenditures.
Commenting on this, Mr. Shi, a scholar from Hunan, told reporters that the expansion of the Communist Party’s grassroots governance system in recent years has strained local finances.
Mr. Shi remarked, “After the pandemic, foreign capital has withdrawn, private enterprises have closed, and residents’ purchasing power has declined. Finances in the entire western region are deteriorating, but the extensive grassroots administrative system continues to grow, with more people being financially supported. I heard that in some places, management of the adult entertainment industry has been relaxed, indicating that localities have started seeking additional sources of income.”
Some netizens commented, “The income of ordinary people is getting lower, yet the government still needs to support so many people.” Another netizen remarked, “Dafang County has over twenty direct institutions, and if you add in more than 200 enterprises, no amount of money will be enough; this is systemic corruption.”
In recent years, the failure of the Communist Party’s land finance system has persisted, and the problem of local government debt continues to worsen. The general consensus is that county-level finances are one of the most fragile parts of China’s debt chain.
A report released by Southwest University of Finance and Economics mentioned that the average fiscal self-sufficiency rate of counties is only about 38%, with some counties in the central and western regions having self-sufficiency rates lower than 20%.
Economist Huang Yi (alias) believes that second and third-tier cities in mainland China and counties under management have entered a state of “borrowing new to repay old.”
Huang Yi stated, “The financial crisis in Dafang County is just a microcosm of the deteriorating Chinese economy. I have discussed financial issues in recent years with colleagues, such as the cancellation of civil service performance evaluations, delayed payment of teacher salaries, salary cuts for medical staff, and the collapse of urban investment platforms, among others. Now, with the massive printing of money, it’s not much different from the gold yuan issued by the late Kuomintang regime; you’ll see, it won’t last long.”
Public information indicates that Dafang County is located in the Wumeng Mountain area of Bijie City, Guizhou Province. It was previously a nationally designated impoverished county and one of the key areas in the so-called “poverty alleviation battle.” The region has long faced challenges such as barren land, limited transportation, and weak industries.
In 2019, Dafang County announced its removal from the impoverished county list after being declared “poverty-free.” Evergrande Group had invested billions of yuan as a paired assistance enterprise, participating in poverty alleviation through industrial projects, relocation, and education initiatives. However, despite the official declaration of poverty alleviation by the Chinese Communist Party, Dafang County’s finances continue to heavily rely on transfer payments to sustain operations.