With lavish banquets, overseas junkets and traffic-stopping motorcades already taboo, Beijing has added one more item to the growing list of prohibitions for the country’s ruling elite: no new offices.
The five-year ban on the construction of government offices, which went into effect this week, is one of the toughest measures yet in the leadership’s campaign to steer Communist party officials on to a more frugal path.
“We must really use our limited funds and resources for the development of the economy and the improvement of people’s lives,” the State Council, China’s cabinet, said in a statement.
The ban also applies to the expansion of existing buildings. The government vowed to strictly enforce the edict after similar policies in the past failed to stop local officials from indulging their taste for architecture on a monolithic scale.
Unlike austerity policies in the west which have been triggered by budgetary shortfalls, China’s tightening moves are driven more by the new leadership’s determination to address what it sees as the slipping moral standards of the Communist party elite.
Xi Jinping’s first move as party chief late last year was to bar lavish banquets, red-carpet receptions, wasteful travel and other trappings of corruption that have stained the public’s perception of the government.
Those measures have had a clear impact on the economy, leading to slower consumption growth in the first half of the year and dealing a blow to luxury goods companies around the world.
Whether the latest ban has a similarly negative impact on the property market will depend on how it is interpreted by state-owned companies. Chinese corporate executives have felt pressure to comply with Mr Xi’s earlier austerity policies even though government officials, not companies, were his targets.
Beijing has previously tried to stop local governments from building massive new offices, but only with limited success. Even in poorer parts of China, cities and villages have built monolithic offices, replicas of the US Capitol building and faux-European palaces. In one notorious case, the government of the poor Yingquan district in Anhui province spent a third of its budget on a White House replica.
Under the new ban, renovations of outdated offices will be permitted, but the approval process will be extremely strict and there will be no tolerance for “luxurious decorations”.
In announcing the ban, the state council tried to anticipate the ways local governments might circumvent the rules. It said expensive government buildings could not be built under different names such as “institutes” or “centres”.
It prohibited the expansion of existing buildings under the guise of “building repairs”. It also said 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 buildings.
In his first public speech as Chinese premier in March, Li Keqiang said he would ban the use of public funds to build new government offices, halls or guest houses to reduce the size of the country’s enormous bureaucracy.
“It’s very, very positive. 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.
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