【Epoch Times, July 20, 2025】From the strictest alcohol ban in history to cracking down on the “extravagant and luxurious lifestyle,” the Chinese Communist Party (CCP) authorities have repeatedly emphasized tightening belts. Observers believe that this mainly reflects the financial strain at all levels of the CCP regime, with resources prioritized to the most powerful departments.
On July 16, the Ministry of Finance held a warning education conference and party secretary lecture. Lan Foan, the Party Secretary and Minister of the Ministry of Finance of the CCP, presided over the meeting, emphasizing the need to “thoroughly implement the Central Committee’s eight regulations” and to “crack down on the extravagant and luxurious lifestyle.” They must “learn from the lessons” (generally believed to refer to the death of an official in Henan after excessive drinking), understand the dangers of irregular eating and drinking, and the risks of irregular gift-giving.
Back in 2023, the Central Economic Work Conference proposed that “party and government agencies should get used to tightening their belts.” In recent years, the Ministry of Finance has repeatedly stressed the need to strengthen budget constraints and has urged local departments to adhere to tight budget controls.
“Now it’s gone too far! Not only can’t you use public funds for dining and drinking, even private gatherings require reporting,” said Ms. Lin, a knowledgeable individual in Mainland China, in an interview with Epoch Times. She mentioned that now even going to a hotel for a meal requires reporting to the community, and those going back to the office or encountering disciplinary investigations.
According to reports, large hotels in the area have become deserted, with chefs and waitstaff selling cooked dishes and fast food at the entrances. Occasionally, small eateries see retired individuals playing cards with friends, spending little on meals. Large hotels are particularly quiet, no longer hosting banquets or celebration events. Alcohol sales have plummeted, with unsold stocks of liquor, red wine, and beer piled up.
“Except for top leaders who still may have the chance to indulge in luxury, like hosting special events. But even they are cautious now, in the past, leaders used to enjoy private meals or dine in secret rooms at grand hotels. But now, with the trend of reporting violations, everyone is on edge,” she said.
Ms. Lin noted that the current financial situation is tense; local governments are heavily indebted. Provinces like Tibet, Guizhou, and the three northeastern provinces rely on fiscal transfers for 60% of their budgets. With the economy suffering, both the central and local governments are facing financial difficulties, with land sales failing and local fiscal resources depleted.
Regarding the lack of funds, she cited an example where a local enterprise was implicated in organized crime, involving tens of millions in assets. The city’s finance bureau wanted to seize the money, leading to arguments between the municipal public security bureau and the district finance bureau over jurisdiction. With the judiciary convicting them of criminal activities, the confiscated assets would flow back into the fiscal system.
Locally, civil servants either borrow from hospitals or through urban investment companies since the fiscal situation is dire. In recent years, due to fiscal constraints, many leaders’ “special relationships” have been cut short. In the past, units would tailor positions for leaders’ children based on their expertise, sometimes setting up secondary institutions to accommodate them.
“Now the finance is robbing Peter to pay Paul or imposing fines. People are driving less due to high fuel prices, leading to a surge in electric scooter riders. During hot days, traffic police are on the lookout, targeting those not wearing helmets and fining them fifty yuan,” she explained.
She mentioned that in the past, civil servants enjoyed numerous hidden benefits, including meal and car allowances (which could amount to a few thousand for city-level officials), year-end bonuses equivalent to half-yearly salaries, and various accolades. However, these perks are slowly being phased out due to financial constraints.
Ms. Lin noted that the economy’s downturn has triggered widespread closures, with physical stores shutting down as consumer spending declines. Even prominent storefronts in city centers are being auctioned off, with cinemas closing down due to lack of patronage. Community convenience stores are also shutting down due to an inability to sustain operations, leading to a downward shift in consumer spending. However, some commodities are now cheaper than before, with fruits and vegetables witnessing a significant price drop.
“There’s a growing fear of internal unrest; societal grievances are high, with an erosion of moral values. Many are unemployed, and many young people in our city are financially reliant on their parents, who not only cover mortgage payments but also support their children, grandchildren, and daughters-in-law, as many cannot afford to live independently,” she shared.
Recently, a prominent scholar reported that during times of crisis, the country’s resources are prioritized for the internal system, ensuring stability and safeguarding core cities from chaos. As a widespread financial crisis looms, many regions struggle to pay salaries, prompting a shift in financial resources towards maintaining stability.
An insider commented that the Ministry of Finance’s crackdown on extravagant living was paving the way for stability maintenance, aligning more funds to this aspect due to the worsening economic conditions. Profligate officials and grassroots workers accustomed to luxury living are finding it hard to cope in the current scenario, hence the rush to generate funds.
Ms. Lin pointed out that even the police departments are strapped for cash. With insufficient manpower, the police have recruited auxiliary personnel heavily reliant on fines and penalties to pay their salaries, as budget allocations are insufficient.
Noted rights activist Chen Guangcheng mentioned that the economic recession has left the government financially drained. A friend of his, a high-level stabilization official, noticed a downgrade in accommodations for security personnel following them at all times. The curtailment of expenses was not borne out of conscience but out of financial constraints bringing an end to the extravagant lifestyles government officials previously enjoyed.
Due to the economic downturn and immense fiscal pressure, departments are reducing staff, resulting in fewer personnel handling heavier workloads, leading to complaints about excessive work demands.
In response to this, Chen Guangcheng believes that the existing workload is being compared to the past when numerous personnel in rural towns were underutilized, with hundreds of staff members doing little work. These staff would often drive to remote eateries during work hours to enjoy leisurely meals. By reducing unnecessary personnel, substantial manpower can still be deployed effectively.
Ms. Lin maintained that the discipline inspection commission currently wields significant power, creating an environment of fear and apprehension across the public, judicial, and law enforcement systems. The disciplinary commission can arbitrarily incriminate individuals, akin to the “Cultural Revolution” era where bribery charges are swiftly imposed.
“People are taken to the interrogation center, essentially a mini-prison run by the disciplinary commission. Once detained, interrogation goes on incessantly for 24 hours without rest, bright lights glaring all the time, without enough food or water. The interrogators eat well, receiving hundreds in allowances every day,” she revealed.
“Where is good now? The military is the best; even at lower-ranking levels, cadres earn one to two thousand yuan a month, with good benefits and medical expense reimbursements. Local civil servants hardly earn a few thousand yuan, reporting thresholds last year were raised to one thousand. Even these civil servants are struggling, with imported medicines in short supply, including anesthesia being unavailable,” she explained.