Cash-Strapped Chinese Cities Turn to Fines for Revenue, Study Shows

Local Chinese governments are increasingly relying on fines and asset confiscations to offset mounting fiscal pressures, a trend that is stifling new businesses, according to a newly published academic study.

Researchers from Renmin University of China analyzed data from 279 prefecture-level cities between 2015 and 2023. They found that fines and asset confiscations averaged 14.7% of local nontax revenue — well above the national average — and steadily grew as a revenue source over the period. Shenzhen was the least reliant on such penalties.