China Bans New Government Buildings In Latest Frugality Drive
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
China has banned the construction of new government buildings for the next five years as it seeks to cut down on wasteful spending and address public anger at corruption, according to state media.
China has banned the construction of new government buildings for the next five years as it seeks to cut down on wasteful spending and address public anger at corruption, according to state media.
According to the official Xinhua news agency, the ban, which takes immediate effect, would also apply to the expansion of existing buildings under the guise of “building repairs”. It also said that government and party agencies were not permitted to accept any form of corporate sponsorship or to collaborate in any other way with companies to construct new buildings.
The ban – described as an “across-the-board halt” – also included “glitzy structures” built as training centres, hotels or government motels, Xinhua said. Projects that have already won approval but are not under construction yet should also be halted.
Instead, the State Council, China’s executive cabinet, and the Communist Party called for the funds to be spent on developing the economy and improving public welfare.
Related: China Vows to Step Up Bribery and Corruption Crackdown
Related Infographic: Red Money – China’s Wealthiest People, Companies & Cities
Across China, reports of extravagant government buildings – such as a local government office in poverty-stricken Anhui province covering an area larger than the U.S. Pentagon, and a government building in central Jiangxi province with a $45 million mechanical clock tower – have provoked public resentment towards government waste.
“Some office buildings use up a lot of money, there are operating costs and a lot of money is spent on people eating and drinking which all comes from government funds, so it’s a kind of corruption,” said Liu Shanying, a politics researcher at the Chinese Academy of Social Sciences in Beijing.
The five-year construction ban is a significant move to fight corruption, he told the AP, adding that offices of rural officials can sometimes be larger than the U.S. presidential office.
China’s austerity campaign, unlike those in the West which have been triggered by budgetary shortfalls – is driven largely by the leadership’s determination to address what is seen as the slipping moral standards of the country’s political elite.
Xi Jinping has made the fight against graft a key objective of his administration and last year, in his first move as head-of-state, imposed a ban on lavish banquets, red-carpet receptions and other trappings of corruption that have tainted the public’s perception of the government.
“Banning the building of new government buildings is important for building a clean government and also a requirement for boosting CPC-people ties and maintaining the image of the CPC and the government,” said Xinhua, which quoted the government directive.
Related: Chinese Officials Forced To Auction Off Luxury Cars To Pay Off Debt
Related: China Bans Luxury Gift Ads in Austerity Drive
Besides being linked with official graft, economists have warned that the ruling party’s reliance on state-led construction as a means of boosting growth is unsustainable.
“Lots of the investment in buildings has only raised most costs down the road. The money can be saved and used for more productive things,” said Shen Jianguang, an economist with Mizuho Securities.
Related: Can China Continue To Spend Its Way To Growth?: Michael Pettis
