In the past three years, the Chinese Communist Party (CCP) has implemented a strict “zero-COVID” policy, which has drained local finances. Despite lifting lockdown measures, China’s economy continues to decline, with news of salary cuts for employees ranging from businesses to government officials becoming increasingly common. An informant working for a municipal-level government in Zhejiang Province revealed the reality of salary cuts for government officials and pointed out that the CCP is resorting to a “corrupt officials economy” to alleviate financial difficulties, with plans to construct new prisons for a larger-scale crackdown.
Since the second half of 2021, a wave of salary cuts for civil servants and various financially supported personnel has swept across almost all provinces in China, with allowances and bonuses being canceled or reduced. Tian Liang (pseudonym), who currently serves in a department of the municipal government in Zhejiang, disclosed in an interview with Da Ji Yuan that his salary has been cut by more than 20% over the past three years.
Tian Liang explained that the salary reduction is not directly deducted from the wages but implemented through various means. He stated, “The Communist Party now doesn’t even bother to explain when punishing you financially. Once the benefits are gone, they’re gone.”
He provided examples, such as a reduction in the amount of monthly bonuses after one year of employment, decreased year-end performance bonuses, and the elimination of quarterly bonuses. The quarterly bonus used to be around 2,000 yuan.
“At the end of 2021, the year-end bonuses for public officials were significantly reduced, with the assessment bonuses for government officials dropping from the original 60,000 yuan to 20,000 yuan, and the additional monthly bonus decreasing from 15,000 yuan to 3,000 yuan. As a result, my income has decreased from over 190,000 yuan to just over 140,000 yuan, a drop of 50,000 yuan, or around 20%.”
Tian Liang explained the breakdown of income for mainland civil servants:
– Basic salary consists of two components: position salary and rank salary, both of which are based on central standards set by Beijing. The position salary increases once every five years, while the rank salary increases every two years, and this part is currently unchanged.
– Monthly allowances and subsidies, all borne by local finances, vary depending on the rank of the government official. Higher-ranking officials receive approximately 500 yuan more in monthly allowances for each higher level. Currently, monthly allowances and subsidies have not been withheld.
– Year-end bonuses are divided into rewards for government officials’ performance evaluations, an additional monthly bonus before the Chinese New Year, and compensation for untaken annual leave that is usually paid at the end of the year or after the New Year. The longer the employment duration, the higher the compensation, with a cap of 15 days per year.
Furthermore, Tian Liang mentioned a rumor circulating that previous salaries may also be reclaimed by authorities and deducted retroactively.
According to his estimates, deputy bureau-level officials currently earn around 200,000 to 250,000 yuan on average, compared to the previous 300,000 to 350,000 yuan. Meanwhile, officials of the department level earn around 250,000 to 300,000 yuan, down from the previous 350,000 to 450,000 yuan. The current speculation is that authorities are preparing to deduct around 40,000 yuan per person.
Tian Liang expressed that the salary cuts are likely nationwide, with less severe reductions in the western regions. Western areas rely on financial support from eastern provinces and can also borrow money to fund development projects. “Now, here in Zhejiang, we also have to rely on borrowing. Therefore, there is not as much financial income transferred to the west, which puts the CCP’s finances in a major crisis, and it won’t be long before this becomes apparent,” he added.
He also pointed out that all economic phenomena within China do not comply with economic laws, as the economic system primarily serves the political purposes of the Communist Party. This is why many people struggle to understand the economic situation in mainland China.
The various levels of the CCP regularly announce fiscal revenue figures, and this year has seen a significant increase in non-tax revenue, including various government fines. According to data released by the CCP’s Ministry of Finance on September 20, national fiscal revenue in August decreased by 2.8% year-on-year, with a 5.2% decline in tax revenue and an 8.8% increase in non-tax revenue. Meanwhile, land sale revenue plummeted by 41.8% for two consecutive months.
However, there is persistent external skepticism regarding the authenticity of official data.
Tian Liang stated that the true state of the CCP’s fiscal revenue can be estimated from the extent of salary cuts and the closure of businesses. “With numerous businesses closing down, profits for export-oriented companies are very low, resulting in a significant decrease in corporate income tax. Furthermore, land transfer fees have dropped dramatically, signaling an imminent large-scale financial crisis,” he explained.
“A healthy fiscal revenue source relies on corporate income tax. Now that businesses are closing, it shows a deteriorating business environment. A good business environment requires a relaxed and complete legal system, which the CCP lacks,” Tian Liang said.
Describing the CCP’s financial difficulties, he revealed the development of a “corrupt officials economy” scheme. “This term is an internal consensus, an internal phrase,” he said.
He mentioned the construction of new prisons this year specifically for detaining fallen officials, dubbing them “corrupt officials prisons,” prevalent in every region of the province. As the economic situation deteriorates and finances become tight, the CCP has resorted to absurd practices such as confiscating the ill-gotten gains of corrupt officials to fill budgetary gaps.
“Every Communist Party official has evidence of their corruption in the Party’s disciplinary committee; it’s just a matter of whether it’s investigated or not. Fallen officials who are aware of the CCP’s sordid secrets are generally not forced to give up their secrets easily. Instead, their embezzled money is used to solve government problems. In short, corrupt officials are tools for the Communist Party to accumulate wealth,” Tian Liang emphasized.
He believed that the CCP is feeling insecure, as the officially reported amounts of corruption among officials have been significantly reduced. “The ranking of CCP officials is strict: small officials engage in small corruption, while large officials engage in large corruption. The bigger the official, the bigger the embezzlement,” he said.
Tian Liang disclosed that the authorities are preparing to arrest a large number of individuals, suggesting that there are similar prisons in every region nationwide specifically for detaining corrupt officials, also known as the “corrupt officials economy.” A key aspect of this practice is that “the CCP first uses corrupt officials to undermine private entrepreneurs, then the disciplinary committee arrests these officials and seizes their money. This is all part of a chain,” he elaborated.
He further stated that CCP officials seize the assets of private entrepreneurs for their own benefit through various means orchestrated by high-ranking officials directing junior officials. These methods include forcing entrepreneurs to take on partners, seizing dividends, changing legal business entities, conducting audits through tax authorities to impose fines, and coercing loans under the guise of borrowing from the government but essentially extorting money.
“These corrupt officials must carry out these acts, as failure to comply means trouble. There’s a saying within the Communist Party that ‘the higher the rank, the more pressure one faces.’ They are not only compelled to act but are also motivated by personal gain and various seductions. When they carry out these acts, many harbor a sense of impunity because only a minority of corrupt officials are actually caught,” Tian Liang said.
Information about the mass arrests made by the authorities has also been disclosed in official reports. According to a report by The Paper on September 28, the number of centrally managed officials who have fallen from power and exposed this year has risen to 43, approaching the total reported in all of 2023 (45 people according to the website of the Central Commission for Discipline Inspection of the Communist Party of China).
As per data from the CCP’s Central Commission for Discipline Inspection website, between January 1 and September 13 this year, they investigated 40 centrally managed officials, comprised of seven at the provincial-ministerial level, 28 at the deputy provincial-ministerial level, and five at the bureau level. In 2023, a total of 45 centrally managed officials were investigated throughout the year, making it the year with the highest number of investigated officials since the 18th National Congress of the Communist Party of China in 2012.