China’s local government financial crisis has spread to universities. Government subsidies at the Kunshan Research Institute in Jiangsu Province have been decreasing. Interviewees say that the overall economic situation in Kunshan is deteriorating, with 300,000 people having already left and business owners unwilling to invest further. Universities in Henan are running businesses on campus, with students, professors, and lecturers working as laborers.
A researcher named Wang Feng (pseudonym) from a research institute in Kunshan, Jiangsu, recently told Epoch Times that his unit is a research institute where the staff members have at least a bachelor’s degree, with others being postgraduates and doctoral students. Due to the poor economy and a lack of government funding, their unit has also been affected. The government’s subsidies have been decreasing over the past two years. “Nowadays, I have to ask the government for money every month, every quarter.”
He mentioned that their research institute has also been laying off employees, with no new hires. Due to financial constraints, salaries are low, leading some to leave voluntarily.
Wang Feng from the Kunshan Research Institute in Jiangsu also mentioned that the overall situation in Kunshan is not good, as university graduates are struggling to find jobs. Factories either relocate or close down. “Some business owners refuse to spend money on hiring people or renting factory buildings. They simply do not want to invest time and money, which is a common scenario.”
“I know that in the past, business owners had plans to invest, but now they are hesitating and not putting money into investments. This is related to the outflow of local migrant workers,” Wang Feng explained. Kunshan has lost 300,000 laborers, causing many businesses to struggle, with some unable to even cover their rent.
He also mentioned hearing about some unit leaders experiencing a 10% to 20% decrease in income. “Their previous salaries were high, so a slight decrease doesn’t bother them.”
Kunshan in Jiangsu was once one of the fastest-growing counties in the mainland and was known as the “world’s factory.” According to statistics, in 2022, Kunshan’s GDP surpassed 500 billion, making it the first prefecture-level city in the country to break the 500 billion GDP mark. The county’s economic output surpasses that of most ordinary prefecture-level cities. Kunshan’s economic prosperity is closely tied to its manufacturing industry.
At the end of 2022, as the CCP loosened pandemic control, various economic issues began to surface. All companies are facing the impact of a sluggish market environment. Media reports have already highlighted the significant closure and relocation of factories in Kunshan.
In recent years, there have been continuous reports on mainland media and social platforms about factory closures and labor force loss in Kunshan.
In early May this year, news of a sudden dissolution of a foreign-funded optoelectronics factory in Kunshan spread widely on social media.
This company, Jingjia Optoelectronics, which had been operating for 23 years and invested hundreds of millions, dissolved because the investors no longer wished to continue running the business. The dissolution notice stated: “Due to market competition and technological bottlenecks, along with the impact of the pandemic and economic environment over the past three years, continuous decline in orders has forced the controlling shareholders to prematurely dissolve the company.”
A video related to Kunshan went viral on the internet a year ago. A well-known old company that had been in Kunshan for 30 years, Liuhe Machinery, was planning to leave Kunshan. After receiving compensation, the thousands of employees at the factory would have to face the harsh reality of unemployment.
Recently, a teacher named Mr. Zhong from a university in Henan told Epoch Times that the government is running out of funds, leading to the university falling behind on salaries for months with no welfare benefits available. In his university, they run businesses, produce goods, sell them, make profits, and teach simultaneously.
Mr. Zhong said, “I am responsible for teaching and managing this fruit business at the university, which operates at a self-financing profit or loss. Farmers deliver fruit to us, the factory processes them into various canned fruits. The factory workers are university students, professors, and lecturers who intern here without pay. After learning the trade, they can start their own businesses or open canned fruit factories in their hometowns to make a living.”
He mentioned that their business sells its products to the city and schools, focusing on the food industry.
Amid China’s economic downturn, reports of civil servants taking pay cuts and losing welfare benefits are on the rise. Since last year, there have been numerous social media posts about universities withholding or delaying salaries.
On January 9th, Hunan’s Changsha University of Science and Technology issued a notice delaying the payment of that month’s salaries.
Furthermore, social media reports claimed that on January 8th, the financial department of Guangxi Normal University notified employees that due to the closure of Guangxi’s treasury system, which had not released any financial targets, the January 2024 salaries could not be paid. This notice was later deleted.
“The treasury system has not been opened, and there are no financial targets set,” indicating that the university had not received the government’s financial allocation yet.