China, which was once among the world's fastest growing economies, is now struggling with economic slowdown and budget pressure. President Xi jinping has given a clear order to government officials across the country to cut down on travel, food and office expenses. This step is not only a sign of bringing discipline in government expenses, but also gives a glimpse of China's internal economic problems. After the government's decision, government employees will have to think about expenses even on alcohol and cigarettes. china is the same country that fills Pakistan's pockets. Today the situation has become such that it has become necessary to rein in its own expenses.
According to the report of Xinhua news Agency, this order is clearly a proof that the Xi jinping administration is now forced to adopt a decisive attitude against wasteful expenditure. In China's economic system, local governments used to earn revenue from large-scale land purchase and sale, but in recent years there has been a sharp decline in land sales, which has increased the budget deficit and the debt burden has reached its peak. For this reason, at the end of 2023, Xi jinping gave a clear message that we will have to get into the habit of 'belt-tightening', that is, we will have to control expenses at every level. Now in 2025, this policy is being implemented on the ground.
Effect on the stock market
The decision to cut government expenditure also had a direct impact on the Chinese stock market. The Consumer Staples Stock Index fell by 1.4%, while the stock of premium liquor maker Kweichow Moutai fell by 2.2% - the biggest decline in six weeks. Experts believe that this decline shows that the market has become uncomfortable with the possibility of reduced consumption by government institutions.
Tighter monitoring of corruption and wasteful spending
Xi jinping has intensified an anti-corruption campaign in recent years, punishing hundreds of officials. Now the control mechanism is being tightened further in an effort to rein in wasteful spending. The beijing administration has asked local governments to make budget review, managing debt risk, and cutting utility expenses their priority.
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