Chinese economy (People News)
[People News] As China’s economy continues to slide downward and local government finances come under comprehensive strain, the Chinese Communist Party (CCP) has required party and government organs in all 31 provinces to “live frugally.” This has even led to extreme cost-cutting measures, such as schools being unwilling to replace aging equipment and local governments slashing welfare benefits. In stark contrast, however, Beijing’s “covert military assistance” to Russia has never been tightened; instead, it has continued to increase as the Russia–Ukraine war drags on. This has prompted outside observers to question: how can a fiscal crisis and an expansion of military support coexist?
Official data show that in 2024, all four first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—ran fiscal deficits. In Yunnan and Heilongjiang provinces, fiscal expenditures exceeded revenues by more than three times. According to Yicai (First Financial), local fiscal revenue in the first ten months of this year was about 10.5 trillion yuan, while expenditures reached as high as 19.1 trillion yuan, leaving a massive gap.
At the same time, since August, CCP party media have repeatedly published articles explaining that “living frugally does not mean living bitterly,” continually calling out to grassroots officials—an indication that resentment within officialdom is accumulating and that policy directives are difficult to implement.
Current-affairs commentator Li Linyi told The Dajiyuan: “The central authorities demand spending cuts, but grassroots officials are afraid of being held accountable and dare not spend money, so they can only tighten the belt further and further. And since officials are unwilling to reduce their own benefits, they shift the pressure of austerity onto equipment and people’s livelihoods.” This has been vividly reflected in frequent cases across the country of “printers not allowed to be replaced,” “broken streetlights not repaired,” and “shrinking welfare benefits.”
Yet while domestic finances are stretched to the breaking point, the CCP’s military and economic support for Russia has become increasingly evident, including drones, chips, dual-use civilian-military equipment, and even energy-settlement channels designed to evade sanctions. The scale of this transfusion of resources continues to expand.
Apollo News commentator Wang Duran pointed out that this is not a contradiction, but rather the inevitable result of the CCP’s political logic:
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Russia is viewed as a strategic buffer; if Russia were to fail, the CCP would directly face pressure from the West.
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Maintaining the “China–Russia alliance narrative” to avoid international isolation.
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Reliance on Russia for military technology and sanction-evasion capabilities.
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The belief that the cost of aiding Russia is lower than the geopolitical risk of “Russia’s defeat leading to China’s isolation.”
In other words, the CCP can tighten belts at home, but Russia must not fall.
In China, many localities cannot even replace printers, repair streetlights, or fix heating systems due to lack of funds, yet they continue to promote “growing China–Russia cooperation,” creating a glaring contrast. A regime in fiscal crisis that prioritizes limited resources for a foreign war rather than domestic livelihoods is generating increasing public dissatisfaction.
Wang Duran summarized: “The tighter the finances become, the more the CCP transfuses blood to Russia, because it fears isolation; but the more it transfuses blood outward, the more domestic finances collapse. This is a self-accelerating vicious cycle.”
(Apollo News report by Wang Duruo)
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