Recently, the term “smashing pots and selling iron” has sparked much attention among Chinese mainland netizens on social media platforms, but some related reports and comments have been deleted or blocked.
On August 28th, a document image announcing the establishment of the “smashing pots and selling iron” task force in Bishan District, Chongqing City, circulated on mainland social media. Currently, reposts of an article from Chuan Guan News citing the Hunan Daily reported that the local “smashing pots and selling iron” task force in Bishan District of Chongqing has indeed begun operating.
However, reposts of the Hunan Daily article by Qingdao Daily and Da Jiang Web were met with a “404” error (link not found). At the same time, some Weibo and WeChat posts discussing “smashing pots and selling iron” were also blocked.
Websites monitoring the deletion and banning of content in the Chinese network noticed that an article titled “Smashing Pots and Selling Iron! What’s Happening in These Places?” by the WeChat public account “Liu Xiaobo’s Financial Pro” was also inaccessible (404).
The article mentioned that the phrase “smashing pots and selling iron” has long been included in government work reports or documents in many places. For instance, in the 2024 government work report of Zhuozi County, Inner Mongolia, it was stated, “Smashing pots and selling iron to resolve debts of 1.337 billion yuan.”
According to the article, “smashing pots and selling iron” is primarily used by some local governments to dispose of assets, resolve local debt risks, meaning to sell idle assets, including land, buildings, and inefficient local state-owned enterprises.
A Chinese digital media website provided the original article link titled “Smashing Pots and Selling Iron! What’s Happening in These Places?” The reason given by the WeChat platform for blocking the article was for violating regulations and receiving complaints that it breached the “Internet User Public Account Information Service Management Regulations.”
The essence of “Smashing Pots and Selling Iron! What’s Happening in These Places?” can be summarized as follows:
Establishing a task force for “smashing pots and selling iron,” what does this mean? A quick search online reveals that the phrase has long been present in government work reports and documents in many places.
For instance, in the 2024 government work report of Zhuozi County, Inner Mongolia, it states the following regarding risk mitigation: “Smashing pots and selling iron to resolve debts of 1.337 billion yuan, achieving debt downgrading. Revitalizing funds of 14.896 million yuan, reclaiming funds of 6.5 million yuan, prioritizing debt resolution and major project expenditures.”
Ningxia’s Yongning County issued a “Plan for Disposal of Idle Properties of Relocated Houses” on July 25th this year, emphasizing the need to dispose of assets to resolve debts thoroughly.
Qinghai Province’s Development and Reform Commission website indicates that Haixi City in Qinghai is also implementing “smashing pots and selling iron.”
Not only in China’s central and western regions, but also in the northeast and coastal areas, the practice of “smashing pots and selling iron” is being carried out. On May 11th, 2024, Quangang District of Quanzhou City in Fujian Province convened the 37th executive meeting to discuss asset disposal and debt risk resolution through “smashing pots and selling iron” while strengthening budget management to cope with financial constraints.
Across various regions, the impactful term “smashing pots and selling iron” has been used unanimously, stemming from the 2023 “Document No. 47” concerning enhanced management of government investment projects in key provinces and the directive to “Smash pots and sell iron to fully resolve local debt risks.”
The document also lists 12 key provinces and cities for debt mitigation: Tianjin, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Guangxi, Chongqing, Guizhou, Yunnan, Gansu, Qinghai, and Ningxia.
As of the end of June 2024, the total outstanding debt of local governments nationwide was 42.6 trillion yuan, an increase of approximately 5 trillion yuan from the same period last year. However, this only accounts for regulated local debt. In addition to this, local governments have borrowed substantial interest-bearing debts through financing platforms (local state-owned enterprises), with the total scale exceeding 75 trillion yuan.
Data from Guangfa Fixed Income shows that the province with the highest urban investment debt ratio is Jiangsu at 934%, followed by Chongqing, Sichuan, and Zhejiang reaching 886%, 817%, and 816% respectively, with Guangdong, the leading economic province, standing at 191%.
The disposal of idle assets through “smashing pots and selling iron” across China mainly involves land, buildings, and stakes in inefficient state-owned enterprises, either used to offset debts or through auctions, ultimately increasing market supply and suppressing housing prices.