Chinese Localities Adopt ‘Sell Everything to Save the Day’ Policy to Ease Debt

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In the first half of 2024, Chongqing’s general public budget revenue grew by 12.2% year-on-year

Chinese local governments are desperately seeking new revenue streams by leveraging government-owned assets to address mounting debt pressures and dwindling coffers.

A document from Bishan District in Chongqing, southwest China, went viral online, outlining the formation of a “Sell Everything to Save the Day” task force aimed at monetizing state-owned assets.

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Chinese local governments are monetizing state-owned assets to address debt pressures and declining revenue, with initiatives outlined in multiple regions including Chongqing, Gansu, and Inner Mongolia.
Fiscal challenges are exacerbated by declining tax revenues and reduced land sale incomes, highlighting a need for comprehensive debt-clearing plans.
Chongqing’s efforts in 2023 led to significant growth in non-tax revenue from asset disposals, while maintaining a focus on revitalizing state-owned assets for financial stability.

AI generated, for reference only

What Happened When

2023：: Zhuozi County in Inner Mongolia managed to reduce debts of 1.3 billion yuan by asset disposal. Delingha City in Qinghai Province outlined plans to sell assets of eight government-owned enterprises to generate 113 million yuan.

July 2023：: The Politburo urged local authorities to guard against and mitigate debt risks by implementing comprehensive debt-clearing plans.

First half of 2024：: Chongqing’s general public budget revenue grew by 12.2% year-on-year, though the growth rate slowed 3.8 percentage points compared with 2023. Tax revenue growth dropped to 2.8%, while non-tax revenue surged by 31.2%, driven primarily by asset disposals.

July 2024：: The country’s national fiscal revenue contracted by 1.9% year-on-year. Local governments saw their land sale income fall to its lowest level in two years.

August 2024：: Dingxi city in Gansu urged local government-backed financing vehicles to step up asset disposals to pay off debt.

Monday, August 26, 2024：: The Ministry of Finance reported that local governments' debt risks had generally eased, with a declining trend in hidden debt.

Wednesday, August 28, 2024：: A staff member at the Bishan District Finance Bureau said he was unaware of the situation involving the 'Sell Everything to Save the Day' task force when contacted by Caixin.

AI generated, for reference only