In China these days, there is an ongoing economic crisis, and China is trying various measures to address it.
However, it seems that none of these measures are proving effective in resolving its economic woes.
In fact, when China’s economy was rapidly advancing, it indulged in excessive spending and increased its expenses in its authoritarian regime.
As a result, when its economy started to slow down, it had to face economic difficulties in every sector.
Whether it is recruitment in city administration or increasing the recruitment of people in urban areas for security measures, high-ranking officials did not waste time in doing so and even resorted to corruption in this work.
On the other hand, in China, manufacturing, exports, and the influx of foreign tourists were also declining.
As a result, people started losing their jobs. Due to the COVID-19 pandemic, there was a significant decrease in demand for Chinese goods worldwide, and China’s strict lockdown exacerbated the situation further.
Furthermore, China’s economy has been in decline since 2023 with turmoil in the real estate sector risks and trust and asset management institutions, a struggling stock market and a looming financial crisis.
China was unable to fulfill the limited demand from foreign countries due to its stringent lockdown.
All these activities led to the loss of livelihood for the working class in China.
This segment used to invest around 20-25% of their income in real estate, which came to a halt.
China’s economy witnessed a series of bankruptcies, including Ever Grande, Country Garden, Vanke, Agile, Sichuan Holdings Greenland, China Resources Land, and many other real estate companies.
For some time, both the central and regional governments continued to pay salaries to their employees from their previous savings, but this led to their treasuries running empty.
Previously, while job cuts were happening in the private sector for employees and officials, now the impact could also be seen in the government sector.
It even started affecting people associated with China’s security sector.
Currently over 10 provinces and cities in China including Beijing, Chongqing, Tianjin, Shanghai, Hebei, Hunan and Sichuan have started organizational downsizing with some planning to reduce leadership roles.
This move follows the CCP’s institutional reform plan issued last March which required reforms at the central level by the end of last year and at the local level by the end of this year, experts view these reforms as the CCP’s strategy to prolong its life.
Li Yuanhua, an Australian-based scholar, observes that the CCP recognizes the high operational costs of its extensive bureaucratic system.
These recruitment efforts and the broader reform measures highlight the CCP’s urgent efforts to address public dissatisfaction and the existential threat to its dictatorship using all available means to maintain stability.
Before these reforms, some cities had up to ten deputy mayors.
The combination of too many officials and current financial strains is necessitating this downsizing.
Furthermore, China’s economy has been in decline since 2023 with turmoil in the real estate sector risks and trust and asset management institutions, a struggling stock market and a looming financial crisis.
CCP data reveals that as of last October, local government debt exceeded 40 trillion yuan leading to widespread bankruptcy.
Li Yuanhua notes that three years of pandemic lockdowns have depleted both central and local government funds.
This financial crisis has rendered the CCP’s bureaucratic system either non-functional due to lack of funds or barely operational.
Lai Jianping, a former Beijing lawyer and chairman of the Federation for a democratic China in Canada, explains that the CCP’s reduction in leaders serves two primary purposes, firstly, facing severe financial difficulty, the CCP is cutting personnel to effectively allocate limited resources, particularly in vital sectors like public security, legal and judicial systems, National Security and intelligence agencies to maintain its one-party rule.
Secondly, reducing the number of leaders aims to streamline decision-making. Fewer leaders mean fewer conflicting opinions and more efficient operation of the authoritarian system, enhancing regime control.
Amidst the surge and business failures, layoffs and unemployment local governments in China are recruiting grid members and security guards offering high salaries.
These recruitment efforts and the broader reform measures highlight the CCP’s urgent efforts to address public dissatisfaction and the existential threat to its dictatorship using all available means to maintain stability.
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