In a rare concession by Chinese Communist Party (CCP) officials, the local Political and Legal Affairs Commission (PLAC) in Guangdong Province has agreed to compensate protesters 400,000 yuan ($59,180) for their lost business during the COVID-19 pandemic.
On Aug. 6, the PLAC of Huicheng district in Huizhou city approved the application from the local financial bureau for allocating 400,000 yuan towards “domestic stability preservation” to placate protesters demanding compensation for their losses due to bankruptcy of a local tutoring agency. Local officials from the education and public complaints departments showed no objection to the proposal.
Since January, Huizhou Mengzhiyuan Education Investment Ltd. had been out of business due to the impact of the CCP virus, commonly known as the novel coronavirus. In June, while other tutoring institutions in the city resumed operations, the company remained closed.
Parents who had prepaid for their children’s courses tried in vain to get back their money. Some had already paid for the whole year. For example, Ms. Chen had paid 16,000 yuan ($2,370) in tuition for her two children, but they had only received instruction for one semester. Her calls for a refund to the head of the company went unanswered, and she became extremely worried that the company would disappear forever.
Also affected were several employees at the company, who went without pay for months. Ms. Peng complained that the company owed her 10,000 yuan ($1,480) for work done from December last year.
Angry parents and Mengzhiyuan employees went to the local government for help. They also took to the streets with banners calling for public attention. After rounds of discussion between government sectors, the local authorities had to cave in and provide compensation.
Menzhiyuan began operating in its Huizhou office in 2016. It created eight branches to expand its business, which had reportedly not been registered as required.
Not only in Guangdong, but local governments elsewhere across China are also facing hard-hit financial situations.
In a similar situation, the Housing and Urban-Rural Development Bureau of Pulandian district in Dalian city, Liaoning Province, applied to their local government to borrow 1,600,000 yuan ($236,700) as “stability-maintaining funds” to reimburse employee insurances, including health, unemployment, job injury, maternity, and endowment, and to pay the Housing Provident Fund for their local public utility, whose business account had been frozen by the court for a long time.
Clandestine Funds for Preserving ‘Domestic Stability’
In Communist China, “domestic stability” expenditures remain a highly sensitive term. To avoid publicly revealing how much of its budget is dedicated to such efforts, the CCP has always played word games in an attempt to hide such spending, by naming it “public security spending” in official documents and statements. Its actual expenses and the recipients are considered top secrets.
As early as 2009, China’s “domestic stability” expenditure was 514 billion yuan ($76 billion), while its national defense budget was 480.7 billion (71 billion), according to a report published on May 27, 2010, in Social Sciences Weekly.
In a report titled, “China Spends More on Domestic Security as Xi’s Powers Grow,” on March 6, 2018, the Wall Street Journal pointed out that Beijing’s domestic security spending had been growing at a faster rate, exceeding the national defense budget by roughly 20 percent.
Bruce Lui, senior lecturer from Hong Kong Baptist University, wrote in Hong Kong’s Mingpao newspaper that the communist authorities in mainland China ended official reporting of “domestic stability” budgets in 2014. In fact, every year, two different budgets are prepared: one for the National People’s Congress (NPC) deputies and one for journalists, he explained. As such, it is extremely hard for outsiders to catch a glimpse of how China’s budgets, involving thousands of billions of yuan, grow year by year.