The Chinese Communist Party (CCP) is facing financial strain, with local authorities relying on fines and other means to boost income becoming a common practice. According to official disclosures, national tax revenue decreased by 3.4% in 2024, while non-tax revenue increased by 25.4% annually, with income from fines and confiscations rising by nearly 15%.
In 2024, China’s national general public budget revenue amounted to 21.97 trillion yuan, a 1.3% increase compared to the previous year. Within this, national tax revenue reached 17.49 trillion yuan, a decrease of 3.4% from the previous year, while non-tax revenue was 4.47 trillion yuan, marking a notable 25.4% increase.
The total national general public budget expenditure in 2024 reached 28.46 trillion yuan, showing a 3.6% increase from the previous year. According to a report by the Chinese media outlet “Caijing,” non-tax revenue in 2024 grew by 25.4% compared to the previous year. Officials explained that this was mainly due to the increased special revenue turnover by certain central units and the activation of local resource assets, which boosted the non-tax revenue growth rate by about 24 percentage points. Among these, income from fines and confiscations within non-tax revenue increased by 14.8%, with growth rates declining each quarter: 25.2% in the first half of the year, followed by 13.8% in the third quarter and a negative 4.4% in the fourth quarter.
China’s “non-tax revenue” includes revenue from special sources, compensated use of state-owned resources (assets), administrative and operational fees, fines and confiscations, and governmental housing fund income, among others.
The “fines and confiscations” income primarily comes from local sources, mainly concentrated in municipal-level finances, with revenue primarily derived from departments such as public security and courts. This includes general fines and confiscations from departments like public security, transportation, tax, courts, market supervision, as well as fines and confiscations related to smuggling from public security and market authorities.
Analysis by “Caijing” indicates that nationally, fines and confiscations have accounted for around 10% of non-tax revenue since 2018. The proportion of fines and confiscations varies among different provinces, with the top three provinces having fines and confiscations accounting for approximately 20% in 2023.
Liu Chengliang, a researcher at the Suzhou University Dongwu Think Tank and associate professor at the School of Politics and Public Administration, revealed in October last year that in 2022, the CCP’s fines and confiscations nationwide reached 428.3 billion yuan, marking a 10-year high. He believed that the abnormal increase in fines and confiscations is due to local finances heavily relying on land-related revenue in the long term, with the sluggish real estate market significantly affecting local financial income. Additionally, with the need for funding from higher levels to sustain operations and development in the central and western regions, inadequate transfers from top to bottom have led fines and confiscations to become an emergency means to offset the financial gap.
It is worth noting that the data disclosed by Liu Chengliang only pertains to 2022.
In 2023 and 2024, to compensate for reduced tax revenue, local CCP governments across China have generally increased income through methods such as activating stock asset resources. Meanwhile, numerous incidents of “long-range fishing” (illegal cross-province law enforcement) and arbitrary fines have occurred, leading to a rapid growth in income from fines and confiscations within non-tax revenue.
According to a report by the UK’s Financial Times on December 28 last year, CCP securities regulators often require listed companies to disclose situations where controlling shareholders, chairpersons, chief executive officers, and other top executives have been arrested by the police. The report revealed through document analysis that in 2024, there were up to 82 cases of arrests involving personnel from listed companies, with about half of them related to local authorities from other regions or unspecified locations.
These figures indicate that law enforcement agencies in multiple regions nationwide have conducted broader arrests of corporate executives.