How government waste threatens conservation - China Dialogue
Energy

How government waste threatens conservation

China wants to cut inefficiency and create a “conserving society”. But its efforts may be undermined by profligate local governments, argues Tang Hao.

In the past few years China’s central government has begun promoting the concept of a “conserving society”. But this should not just be an economic concept; it should be a mode of social development driven by need to conserve China’s resources. And in a country like China, with its traditionally “government-led society”, there can be no doubt that a “conserving government” is needed. However, local governments are among the most wasteful factors in Chinese society, and it is hard to see how they can currently help us achieve that goal.

Waste in government work

Firstly, we should look at some of the ostentatious offices that local governments build. One district in Zhengzhou, the capital of Henan province, has government buildings that cover 100 mu (66,670 square metres), with six office buildings and a giant hemispherical conference centre surrounded by greenery and fountains. Officials in one district of Fuyang, in Anhui province, have housed themselves in a building modelled on the White House. Locals have dubbed a local government office in the city of Chongqing “China’s most luxurious neighbourhood government office”; a township government office in the same city mimics Beijing’s Tian’anmen Gate. These buildings take up valuable urban real estate, yet are constructed and decorated to standards entirely out of step with the modest means of the populations they are supposed to serve.

We should also consider the day-to-day waste these institutions generate. Astronomical sums are spent on eating at restaurants on a government tab, on the use of government cars and the hosting of elaborate ceremonies. The use of government cars for private purposes cost the country over 200 billion yuan in 2006 (around US$26 billion), according to Liu Guangfu, a member of the Chinese People’s Political Consultative Conference, around the same amount as the national defence budget. In fact, government vehicles are only used for their intended purposes one-third of the time.

Government also consumes shocking amounts of water and electricity. One survey in Beijing found that 48 government institutions used four times as much energy and three times as much water as the average Beijing resident. Government organisations were found to use as much as 9,402 kilowatt-hours per person every year – 19 times the average for the city. In other words, a public servant in their government office uses as much electricity in one day as an average citizen does in 19 days. 

It seems the real source of waste is not the people, but their government. But why are public assets so readily wasted? The answer lies in a lack of supervision and punishment mechanisms, and a lack of respect for taxpayers on the part of the government.

Cutting consumption

US economist Thorstein Veblen wrote inThe Theory of the Leisure Class that conspicuous consumption is primarily aimed at displaying one’s superior status. But the case of China’s local governments is not that simple.

Recent increases in property and land prices have meant rocketing incomes – far in excess of GDP growth – for local governments, who have a monopoly on land resources. This has meant more and more waste, and in other countries the government could not act so freely. Excessive government spending betrays a lack of political awareness – and a lack of respect for the taxpayers and their money. Government officials believe the only way they can benefit from the money is to spend it, and act as if there were no point in saving it. The motto seems to be: as long as the money doesn’t actually end up in your pocket, spend it as you will. This attitude damages both social and political morals.

There are also three structural reasons for this wastefulness. Firstly, the limits of government power are unclear, and it is easy for officials to avoid taking responsibility for their actions. Secondly, there is a lack of government oversight, and there are no limits or supervision on government use of funds. Government offices are exempt from any limits on energy usage, and when electricity is cut to factories and homes to save power during peak hours, it is still business as usual for government. Thirdly, current supervision of public finances is inefficient, and government auditing of public finances requires far less in terms of cost-saving measures than private businesses. The foundations of both corruption and waste lie in these systematic problems. With anti-corruption measures becoming ever stronger, some officials are opting to spend money on large, luxurious projects that they can also benefit from.

Besides a lack of self-regulation, there is no public supervision of government. The taxpaying citizen – the natural regulator of government – is excluded from the supervision process. This is a major reason that local governments continue to consume so excessively at the public expense; the people do not have the awareness of western taxpayers and are so used to government waste that they sometimes see it as normal.

Waste is not the preserve of a few at the government level – it is a widespread social phenomena arising from structural factors. These failures mean that prudent government is not rewarded and profligacy goes unpunished. As economic entities acting in their own interest, local governments have the motive and the opportunity to benefit and become truly “wasteful governments”. And when the advocate of a “conserving society” is itself wasteful, its slogans will fall on deaf ears.

Building a conserving government

There are three changes that governments can make to prevent such waste. Firstly, the relationship between the government and the market should be put in order, and the government’s size must be reduced. In a government-led economy, constant interference in the market results in the government’s size and roles expanding, despite efforts to simplify it. Transforming and limiting these roles – and thus slimming government – is essential to reduce spending. Secondly, the state should consider reducing taxes, forcing local governments to tighten their belts. Thirdly, a new government budgeting mechanism must be put in place, government operational costs should be audited and effective internal control mechanisms should be established to bring free-spending officials under control.

There are many things people can do to help build a less wasteful government and society; for instance, we can apply public pressure to increase transparency and encourage openness in government spending. China Central Television has recently exposed a series of cases of excessive government spending, which contributed to the central government issuing policies on dealing with this waste. This type of action has limits, but it may help stop the rot from spreading – and improve mechanisms for government oversight. However, to truly transform our current “wasteful governments” into “conserving governments” we need to make social supervision regular and sustained, and not merely temporary protests.


Tang Hao, born in 1974, is a newspaper columnist, deputy editor of Shimin (Citizen) magazine, and assistant professor of politics at Huanan Normal University. His essays and opinion pieces have appeared in Contemporary International Relations, International Studies, Nanfang Daily, Yangcheng Evening News, Southern Window and many other publications.

Homepage photo by Xie Xian he Luobote