1 CCDI commentary reflects blowback from ‘strict Party governance’ policy
On Sept. 4, the CCP anti-corruption authorities published on the website of the Central Commission for Discipline Inspection and National Supervisory Commission a commentary article titled, “Combining Strict Control and Kindness to Encourage Cadres to Take Action” (以嚴管厚愛結合激勵幹部擔當作為).
The article noted that in the “pioneering undertaking” of promoting “Chinese-style modernization,” the CCP regime will “inevitably encounter many brand-new topics that have never appeared before, various difficulties and obstacles, and withstand many major tests that throw up high winds and rough waves (風高浪急) and perilous situations (驚濤駭浪). Therefore, it is necessary on this “new journey” to force a “stronger leadership force” through unifying to a high degree “strict management and supervision” and the “encouragement of responsibility.”
The article then called for the deepening of the application of the “four forms” (四種形態) of strict Party governance and the need for “accurately grasping policy strategies.” The article also urged the motivation of cadres and “stimulation [of their] entrepreneurial enthusiasm” through the implementation of the “three distinctions” (三個區分開來).
The article also repeated some of the views expressed by Xi Jinping in his speech at the second plenary session of the 20th CCDI in January. In particular, the article quoted Xi as saying, “The purpose of comprehensively and strictly governing the Party is not to rigidly control people, to make people hesitant and fearful, and to turn [people] into a stagnant pool of lifelessness and inaction. Rather, [comprehensively and strictly governing the Party is meant to] create a positive and healthy political ecology and a good environment for entrepreneurship by clarifying the direction, establishing rules, maintaining a positive atmosphere, and strengthening immunity.”
‘Four forms’ and ‘three distinctions’
Four forms
The “four forms” of intra-Party supervision and discipline enforcement are:
- Intra-Party relations should be normalized, and criticism and self-criticism should be carried out regularly. This is so that intra-Party self-regulation and frank addressing of problems (咬耳扯袖、紅臉出汗) becomes the norm.
- The majority of discipline cases should require light Party discipline and organizational punishment.
- The minority of discipline cases should require severe punishment for serious breaches of discipline and major job adjustments.
- Only a very small number of cases should involve serious violations of discipline and suspected violations of the law.
The “four forms” of intra-Party supervision and discipline were part of the regulations on inner-Party supervision that were reviewed and approved during the Sixth Plenum of the 18th Central Committee on Oct. 27. 2016. The “four forms” were later included in the revised Party Constitution adopted at the 19th Party Congress in October 2017.
Three distinctions
The “three distinctions” refer to:
- Distinguishing between cadres who make mistakes and errors in promoting reforms due to a lack of experience and experimentation, and cadres who knowingly violate discipline and the law.
- Distinguishing between cadres who make mistakes and errors in exploratory experiments of which their superiors have not imposed clear restrictions, and cadres who violate discipline and the law and insist on going their own way in matters of which their superiors have made explicit prohibitions.
- Distinguishing between cadres who are found to have been unintentionally negligent in promoting development, and cadres who violate discipline and the law for personal gain.
Xi Jinping first brought up the “three distinctions” in a seminar for provincial and ministerial-level leading cadres on Jan. 18, 2016 in pointing out that Party Committees at all levels should combine the strict management of cadres with “enthusiastic concern” for them.
Our take
Xi Jinping’s anti-corruption campaign was primarily a tool to purge factional rivals and consolidate power during his first term. Over time, the campaign gradually evolved into a broader “self-revolution” mechanism meant to rectify problems in governance (“orders not leaving Zhongnanhai,” “prefer left rather than right,” “one-size-fits-all” approaches, and other Party culture-derived bad habits) and improve policy implementation.
The “four forms” and “three distinctions” were introduced near the end of Xi’s first term, and appear to be his leadership’s way of modulating the anti-corruption campaign so that officials do not become entirely risk-averse to innovate and reform when implementing Beijing’s orders as the “strict governance of the Party” is enforced. Yet the anti-corruption authorities’ publication of the Sept. 4 article on the “four forms” and “three distinctions” suggests that CCP officials have barely, if at all, been adhering to the two modulating measures. Therefore, officials have become more passive, prone to “inaction,” and prefer to be “politically correct” rather than taking actions that are actually correct (a good example is the local government’s disastrous handling of the recent Hebei floods) over the years as Beijing moved to more strictly govern the Party instead of doing as the Xi leadership has been urging and “actively take responsibility and be good at struggling” (積極擔當作為、敢於善於鬥爭).
The systemic deficiencies of the CCP authoritarian dictatorship prevent the Xi leadership from tempering its self-rectification efforts; in fact, they enhance existing malign habits in the officialdom. Instead of creating a “positive and healthy political ecology and a good environment for entrepreneurship” through the “strict governance of the Party,” Beijing has made officials “hesitant and fearful” and reduced the bureaucracy into a “stagnant pool of lifelessness and inaction.” The CCP system’s deficiencies have also ensured that Xi’s intense power centralization has done more to hurt rather than help his and the Party’s governing ability, while leaving unresolved the various problems and crises left behind by Xi’s predecessors.
As Beijing continues to struggle to motivate officials and squeeze out more initiative from them, the CCP is looking increasingly ill-equipped to pass the “major tests that throw up high winds and rough waves and perilous situations.” And with Xi proclaiming paramount status (定於一尊) in the regime, he is setting himself up to be held ultimately accountable for the many failures that are befalling the CCP regime.
What’s next
The Xi leadership’s governance problems will likely worsen as the Chinese economy worsens and local governments run out of money to pay civil servants. Other disastrous moves like local governments in Hebei flooding rural communities to “protect Xiong’an” will further erode the Party’s political legitimacy in China.
Should current political and governing trends persist, there will be an increasing likelihood that overt or covert political crises (including political Black Swans) will be triggered before the end of 2023.
2 Civil servants in many parts of China not paid wages for months
Civil servants owed wages
Overseas Chinese language media and social media recently called attention to civil servants in the local governments of several places in China not receiving salaries:
1. On Sept. 4, a video circulating on Chinese social media showed retired teachers in Jiutai City, Jilin Province petitioning the local government over the suspension of their pension payments.
2. On Sept. 5, a help request posted on a Chinese social networking website noted that the zoo keepers at the zoo in Dongshan Park in Liaoning’s Wafangdian City have not been paid in six months, while the zoo animals are running out of food and are being fed at half their usual rate.
A photo circulating on the Chinese internet showed a signboard in Dongshan Park with the following notice dated Sept. 5 that appeared to be signed by the park staff: “We have not been paying wages for six months, and the animals have no food and will starve to death imminently.” Mainland media later reported on the statement and the help request.
On Sept. 7, semi-official mainland media The Paper quoted staff from the Wafangdian City Housing and Urban-Rural Development Department as saying that Dongshan Park is a public park and it mainly relies on government funding for income. The staff added that the local government had fallen behind on making monthly funding allocations to the park due to financial constraints. The staff further said that funding allocation for September had been made on Sept. 6 and the zoo keepers would be getting their salaries on Sept. 7.
The Paper said that the “relevant people” at Dongshan Park later informed them that it had received funding.
3. On Sept. 5, a video circulating on Chinese social media showed dozens of employees of the Guilin Radio and Television Bureau in Guangxi Province holding protest banners in front of their workplace to demand payment of wages owed to them.
One of the banners seen in the video read, “No salary for half a year!!! We want to survive!!! We implore our superiors to do something!!!” One woman was heard yelling, “No salary for eight months,” while others shouted, “We want to survive! We want to survive!”
On Sept. 7, the Guilin Radio and Television Bureau published a statement by the Guilin Cyberspace Administration of China on its official WeChat account to refute the video. The statement said that the claims made by employees of the Guilin Radio and Television Bureau that they had not been paid for six months because the bureau was in financial difficulties was “not true” after efforts at “verification.”
4. On Sept. 7, Radio Free Asia reported several cases of civil servants in China being owed wages:
- Some civil servants in Binzhou City, Shandong Province were being owed wages starting in August 2023.
- Civil servants and employees of public institutions in many towns and villages in Jiaozhou City, Shandong Province had not been paid wages for several months.
- Civil servants from many departments of at least four district government departments, including the Hebei District government in Tianjin City, had not received wages for several months due to local government financial constraints. Some officials even went to the Temple of Great Compassion to borrow money to pay civil servant salaries.
- Most civil servants from the Gaochun District government in Nanjing City did not receive their wages for August 2023. Eventually, the Jiangning District government, with the coordination of the Nanjing municipal government, lent money to the Gaochun District government so that the latter could pay civil servants their salaries.
- The Jiang’an District government in Wuhan City, Hubei Province stopped allocating funds to charities and asked the employees of charities to solve their own living problems. Charities were previously able to raise money from Western countries, but donations from abroad and foreign private organizations almost dropped to zero following the deterioration of Sino-U.S. relations and the revisions of the PRC’s anti-espionage law in July 2023.
Other wage issues
February 2023: A video circulating on Chinese social media showed some employees of China Post’s Harbin branch demanding the payment of their wages and holding banners in protest outside their workplace.
Another video showed dozens of employees holding signs and banners demanding their salaries outside the gates of the Zhenjiang City Taxation Bureau in Jiangsu Province. Located at the confluence of the Yangtze River and the Beijing-Hangzhou Grand Canal, Zhenjiang is an important city in the economically developed Yangtze River Delta city cluster and the Nanjing metropolitan area.
June 2023: Overseas Chinese language media reported that government agencies and institutions in Ruzhou City in Henan Province had owed their civil servants half a year’s worth of wages. Ruzhou is one of the top 100 economically developed counties in China.
July 2023: According to information circulating on Chinese social media, the Dalian municipal finance bureau issued a notice dated July 31, 2023 on the delaying of wage payments in August (關於8月份工資延遲發放的通知).
The notice said that the payment of wages and social security for work units under the municipal budget would be postponed until after Aug. 15, with details to be released at a later date.
The notice also sought the “correct understanding and support” of the local police regarding the Dalian finance department’s decision, and reminded the police to “reasonably arrange” their personal expenditures” so as not to impact their personal credit.
Big picture
Local government troubles in paying wages to civil servants and employees come amid severe economic woes in China, with the official data for trade, real estate, and other economic indicators showing continued declines in August.
Our take
1. The phenomenon of civil servants in China being owed wages for as long as six to eight months points toward local government financial shortages, and is another indicator of serious economic deterioration in the regime.
Local governments have been known to frequently be behind in paying government employees or civil servants like teachers and sanitation workers who belong to less influential public institutions. However, local governments would struggle to issue salaries to their more valued employees due to fiscal shortages becoming more severe after the launch of the Sino-U.S. trade war in 2018 and during the three years of “zero-COVID.”
By 2020, then-PRC premier Li Keqiang was telling governments at all levels to “really tighten their belts” and cut back on spending. Since the beginning of 2021, news that civil servants in places across China—especially in economically developed coastal areas such as Jiangsu, Zhejiang, Guangdong, and Fujian—were receiving pay cuts began emerging. Meanwhile, Hegang, an important coal producing city and one of four major mining areas in Heilongjiang Province, became the first prefecture-level city to undergo financial restructuring at the end of 2021.
At the end of 2022 and in the first half of 2023, some local governments (including Kunming and Guizhou) went public with their local financial and debt problems. In attempting to gain the attention of higher-level governments, some of those local governments also revealed (see here and here) that they were having difficulties with paying civil servants and ensuring the “three guarantees” (basic livelihood, wages, and operations).
2. The inability of local governments to pay wages to civil servants and employees will make it more difficult for them to implement the central government’s policies to revive the economy (including supporting micro, small, and medium enterprises, boosting employment, absorbing graduates into the civil service, etc.), sustain basic government operations, “maintain stability” (the Dalian police are not getting paid in August, and this would undoubtedly have an impact on morale and willingness to work), and deal with natural disasters. The diminishing of local governing ability will in turn worsen local government financial shortages and create another vicious cycle that increasingly thwarts Beijing’s attempts at economic rescue, worsens social instability, and erodes the CCP’s political legitimacy.
The central government could technically resolve the issues of civil servant wage arrears by permitting local governments to issue special bonds and requiring state-owned banks to provide liquidity to local governments. However, local governments will likely have insufficient funds to both pay the wages of their huge civil service and still have enough left over to pay off debts and do a good job of spurring economic growth. Over time, both the central and local governments will find their governing ability greatly restricted.
What’s next
The situation with civil servants being owed wages is likely to worsen as the Chinese economy deteriorates further and local governments struggle to bring in funds. The prolonging of the wage situation will eventually result in the breakdown of government operations, rising social instability, and Beijing’s “orders not leaving Zhongnanhai” because local governments simply lack the means to do so.
The failure of local government will likely also lead the Chinese people to realize that they do not need the CCP to “guarantee” their livelihood, that the Party’s propaganda is empty words, and that the regime has limited control over them. Such realizations among the populace would eventually translate into political problems for Xi Jinping and the CCP, and increasingly force Xi to make a choice between preserving the Party or protecting himself.
