Unlike many scholars and experts who discuss the collapse of the CCP from a political or moral perspective, Fanchou, author of the book “China after the fall of the CCP,” discussed this from China’s economic and local finance perspective. The author believed that the financial capacity of each province and city could be used as a criterion to measure the disintegration of the CCP.
Voice of America interviewed the author, the founder of Taiwan’s “Outpost Prediction” website, and an Asia-Pacific political and economic risk forecaster.
Due to excessive anti-pandemic measures, the fire in Urumqi, Xinjiang, caused the victims not to escape in time, and the rescue force failed to respond, leading to a tragedy of at least 10 deaths and many injuries. Students from dozens of colleges and universities, such as Beijing University and Tsinghua University, joined the “White Paper Revolution” to express their strong dissatisfaction and opposition to the CCP. The people’s demands and protest slogans also changed from calling for the government to “stop the lockdown” to asking “Xi Jinping to resign.” This is considered the largest wave of protests in China since the Tiananmen Massacre of June 4, 1989, regarding the spread of the cities, the composition of participants, and the number of people.
Fanchou expressed that more than 80% of the CCP’s revenue is from the provinces. But if the provinces and autonomous regions cannot maintain financial balance, and if this case lasts for two years, China could enter the “post-communism” period.
He said that when the manuscript for the book had just been completed in July this year, there were three provinces, Shanghai, Guangzhou, and Guangdong, still reaching financial balance, earning more than spending. But by the book’s release in October of this year, all localities in China had financial deficits.
Fanchou said that, at present, the CCP has no money. It has to cut the salaries of civil servants, many places set up “salary reduction offices,” teachers go back to the era of the 1980s and 1990s (not being paid but receiving a debit note). Employees of companies in Shenzhen have to compete and accept salary reductions to stay. Tens of millions of university graduates were unemployed, unfinished buildings everywhere, and even “Dabai” (Chinese anti-pandemic staff) took to the streets to demand wages. “When localities cannot even pay salaries to police, it means that the CCP has entered a stage of financial disintegration!” he said.
Fanchou said that the most significant public discontent in the “White Paper Revolution” was the “zero-COVID” policy and city lockdowns. People were forced to take nucleic acid tests daily, and many communities collected fees from $0.43 (3 yuan) to $1.72 each time. Looking at the “White Paper Revolution” from a financial point of view, it shows that the local authorities, which have lost a vital source of economic revenue from the land, must collect even the small fees of nucleic acid, reflecting that local finance has entered the “post-communism China” period.
Fanchou said that the shortage of local finance would lead to successive reductions or disappearances of various public services; 60% of China’s population has been urbanized, and a market-oriented supply and marketing mechanism, transportation system, health system, and education system are needed to support people’s lives. Moreover, once there is a shortage of public services, people’s eating and drinking can also become a problem, increasing discontent among the people and creating a vicious cycle.
NetEase reported in March 2022 that in 2021, the total financial revenue of the CCP was about $1.6 billion, financial spending was about $3 billion, the national financial autonomy rate was 53.01%, and the fiscal deficit was about $1.4 billion. According to data from the website of the CCP, in 2021, local authority budget revenue was about $1.34 billion, of which gain from the sale of state-owned land use rights was about $1.25 billion, accounting for 92.67%. In terms of scope, China is like a giant corporation. If real estate collapses, China’s finance and the economy will collapse.