Chinese Regime Suffers From Fiscal Hunger but Adds New Censors

October 18, 2013 Updated: October 20, 2013

The Chinese state has a huge problem called “fiscal hunger”. Prior to 2012, the government had money freely flowing, as the annual tax revenues maintained a double-digit growth. Although the total tax revenues have continued to increase, the state’s demands are even more pressing, as the revenue growth rate is dropping.

The state is now trying everything possible to cut expenditures as well as increase the sources of income. Delaying pension payments is one method they are using to cut expenditures. To increase the sources of income, the plan is to impose inheritance taxes and property taxes as soon as possible.

New Stability Maintenance Industry

Within this environment of straitened economic circumstances a new industry has appeared that, according to one online article by Xinhua Net employs 2 million. They are working in stability maintenance—putting down protests and free speech—and their specialty is the Internet.

Analysis of related information shows that the Internet Public Opinion Analyst started in 2008. They provide services to governmental organizations, enterprises and social organizations (e.g. Labor, Youth and Women union, etc.).

The work of the Internet Public Opinion Analyst is different from that of the Internet Commentators (the 50 Cent Party). The Opinion Analyst’s job is to “collect and consolidate the netizens opinions and attitudes, and deliver the report to the decision makers.” Those doing this job have been called “Internet special agents,” but the public opinion analysts disagree.

This new business of stability maintenance has some distinguishing features.

Their analysts are professionally trained and certified. Many central agencies have participated in the training program. It has been reported that training programs for human resources and social protection agencies began in September, and “Public Opinion Analysts Professional Training Certificate” will be given to those qualified.

The Online Public Opinion Monitoring and Measuring Unit of the People’s Net is also said to be interested in the “training” program, and allegedly it “will provide the first training to online public opinion analysts in eight courses including public opinion analysis, method of analysis, and public opinion crisis handling and response.”

The analysts will be paid much more than a fifty-cent commentator—people who are paid fifty cents for every post on line. According to the online web portal operated by China’s Internet company NetEast, the online public opinion analysts are graded into 4 classes with the lowest monthly wage of 6000 – 8000 yuan (US$980 – US$1,300).

The average monthly wage for the 4 classes will be at least 10,000 yuan (US$1,633), with estimated annual wage payment to those hired in this new business at 240 billion yuan (US$39.2 billion), not including the costs for software and equipment which are said to be very expensive too: “regular online public opinion censoring software will cost between 5 to a few hundreds yuan annually.”

The Scope

To tighten its control on public opinion and thinking, the state keeps recruiting more censors.

How big is the team? There is no accurate number for the 50-cent Party members nationwide, but the partially or indirectly revealed number in certain areas is quite overwhelming.

Take the informants in thousands of colleges in China for example. Online ads to hire informants are seen everywhere on college websites. On the website of Xi’an University of Technology on Nov.20, 2008 was an article, entitled “ Establish a Safe Campus and Promote the Teaching Environment—Statements on Our Establishment of a Safe Xi’an Campus.”

The article says there were 2,627 security informants among students and 65 informants among teaching staff. At that time, the total number of their students was 26,000. That is, there was one part-time informant out of every ten students.

A high-profile report on Xinhuanet on Feb.1, 2010 states the assistant of the Kailu County magistrate in Inner Mongolia, the party secretary of the public security bureau, and the head of the public security bureau Liu Xingchen, boasted that their county established a huge network of informants to be constantly on “high alert” to any dissidents and protests.

Detailed content is as follows: All the police and police assistants, regardless of police divisions and posts, are responsible for organizing twenty informants in each community, business unit or complex; there should be 10,000 informants.

Based on this, each of the criminal investigation force, economic crime investigation force, and state security police has to establish at least four informants of the criminal investigation; there should be a total of 100 informants. The number of informants mentioned by Liu Xingchen is 12,093 under the control of Kailu County Public Security Bureau.

The population in Kailu County is 400,000, one quarter being underage youth, which means there is at least one assigned informant to monitor every 25 adult citizens.

How Much?

For an industry employing 2 million people working exclusively for the regime on internet censorship, with the projected cost of 24 billion yuan (US$3.92 billion), exactly how much money do the taxpayers have to fund?

As it is not possible to accurately consider the tax payments from different industries, we can only look at the annual output value (or sales value) of some industries or equivalent businesses to make a rough comparison:

There are currently about 46,000 companies in China’s poorly performing on-line game industry employing about 2 million workers with output value about 10 billion yuan (US$1.6 billion).

For the moderately performing leather industry in China, there are more than 2 million working for 260,000 companies with output value close to 80 billion yuan (US$13 billion).

The best performing e-commerce industry has more than 2 million workers and sale value of approximately 7.8 trillion yuan (US$1.3 trillion).

A corporation is doing very well to achieve an average profit margin at 8 percent to 10 percent after taxes. For the 6 million workers engaged in the three types of industries listed above, their best performance will generate a profit between 560 billion to 700 billion yuan (US$91 billion to US$114 billion) (but the actual figure will be less than this).

So it will take all of the profits generated by the 6 million workers employed by these three types of industries to barely support the 2 millions workers engaged in the new line of business of stability preservation and cover the expensive equipment costs.

The stability preservation business offers service mainly to the Chinese regime, so naturally they will be funded by the regime. According to China’s Ministry of Finance, the budgeted fiscal revenue and expenditures for this year have been increased by 9.5 percent and 14.1 percent, respectively.

As the expected increase in fiscal expenditure is higher than revenue, the Chinese regime will be desperate to exploit wherever revenue sources they can.

Some low paid workers are suggesting the inheritance tax can be used to subsidize the poorer people at the lower level, but this is clearly wishful thinking. With more money spent on stability preservation—for example the use of high-class secret agents such as “internet public opinion analysts”—there is very little likelihood of any spare money for those suffering in poverty.

He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.

Translation by Amy Lien and Sophia Fang. Written in English by Christine Ford

This article first appeared in Voice of America. Published with permission.

Read the original Chinese article. 

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

He Qinglian
He Qinglian
He Qinglian is a prominent Chinese author and economist. Currently based in the United States, she authored “China’s Pitfalls,” which concerns corruption in China’s economic reform of the 1990s, and “The Fog of Censorship: Media Control in China,” which addresses the manipulation and restriction of the press. She regularly writes on contemporary Chinese social and economic issues.