Coal-rich Chinese city fails to pay civil servants as Xi Jinping’s reforms hit hard
Leiyang finance bureau says it has ‘serious shortage’ of cash but wages have now been paid to all staff – nearly a month late
Leiyang, a city of more than a million people in central China, failed to pay its civil servants last month after a significant dive in government revenues.
It is the latest local government to show signs of financial stress amid President Xi Jinping’s ongoing supply-side reform.
Last month, workers on the government payroll in the Hunan province city began worrying when their wages were not paid on the 15th of the month as usual. They still had not been paid at the start of June, prompting some employees to ask the authorities for an explanation via an online forum.
Leiyang’s finance bureau responded in a letter dated June 5, circulated online and confirmed by the South China Morning Post, that the city had a “serious shortage” of cash reserves to pay staff and the government’s fiscal deficit had been getting worse every year.
The letter said the bureau would ensure retired staff received any payments owed first and had asked the provincial authorities to transfer the funds needed to keep the government afloat.
When contacted by the Post, an officer at the bureau said salaries had been paid on Friday morning and should appear in the bank accounts of all staff early next week.