In the lead-up to the “National Day” holiday, local governments in mainland China are adopting a more frugal approach this year due to mounting debt and financial pressures.
According to reports from mainland China and Hong Kong media on October 1st, in Zhengzhou, the capital of Henan Province, the city’s Urban Management Bureau stated that the creation of an urban atmosphere will prioritize the use of well-maintained banners from previous years, which are cleaned, repaired, and reused. In the central Jinshui District of Zhengzhou, 192 old banners were reused, while in the Erqi District, only 94 new banners were used this time, with 436 old banners being reused.
In Shiyan City, Hubei Province, more than 7,300 flags and banners were hung along the city’s main roads, overpasses, squares, and parks, with a focus on reusing festival materials collected in previous years. In Zhongxiang City, no new brackets were added, and instead, old brackets removed and recycled in 2025 were renovated and reused.
In Leshan City, Sichuan Province, officials mentioned that the dual-color leaves used in the square’s revolving platform were reused in the current landscape arrangement.
The emphasis on “frugality to welcome the National Day holiday” in many places this year is related to local financial constraints. Data shows that land revenue has been continuously declining, leading local governments to tighten their budgets and reduce expenditures under debt pressure.
According to the announcement of the Ministry of Finance of the Communist Party of China on the “Financial Revenue and Expenditure Situation from January to August 2026” released recently, in the first eight months of this year, state-owned land use rights revenue totaled 1.3753 trillion yuan, a decrease of 28.6%, equivalent to a reduction of about 550 billion yuan compared to the same period last year.
Land finance is virtually the main component of local government fiscal fund budget revenue. In 2025, state-owned land use rights revenue accounted for as high as 77.6% of local government fiscal fund budget revenue.
Professor Xie Tian from the Darla Moore School of Business at the University of South Carolina previously told a Chinese media outlet that since the bursting of the real estate bubble, revenue from land use rights has been continuously decreasing. It is estimated that the decline for the remaining months of this year and the entire year will continue to expand.
American economist Davy J. Wong stated that this is not a simple cyclical decline, but rather, the previous fiscal expansion model is no longer viable.
The industry believes that factors such as the prolonged sluggishness in the real estate market, tight funds for real estate enterprises, decreasing willingness to acquire land, adjustments in land supply policies, and restrictions on urban investment and local state-owned enterprises have exerted greater pressure on the traditional land finance model.
Previously, the Communist government issued a document further emphasizing the need to “tighten belts.” Universities supported by government finances have also issued similar notices. Peking University recently required tightening of expenditures, including restrictions on meetings in scenic areas. Several other institutions such as Beijing Forestry University, Shanxi University of Finance and Economics, and Anhui Jianzhu University have also issued similar directives.