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Worldcrunch

The Chinese Art Of Balancing Budgets By Booking Vacations With Taxpayer Cash

One middle manager takes us inside an all-too-common practice: public offices that must spend their annual funding increasingly turn to travel agencies to set up all-expense-paid vacations for the whole staff. And of course, the big bosses get extra special pampering.

Article illustrative image Partner logo A tourist bus in Beijing (unfoldedorigami)

Mr. Liu was just promoted to the job of deputy director of a small Investment Promotion Bureau in a northeast Chinese city that must remain nameless. Among Liu's end-of-the-year duties is balancing the bureau’s books. Unlike offices elsewhere in the world these days, he did not face the problem of costs. Instead Liu had to figure out how to spend the leftover annual public funds. For if he couldn't spend it all, the bureau was bound to get much less money next year. All this extra cash: what a headache!

Fortunately a friend from a public department in the nearby city of Dalian offered an idea. “Take a trip abroad, and call it an official visit. Take all your staff. Not only will you spend the money, you’ll have lots of fun!” The friend explained that his office had taken two recent “business trips” to Taiwan.

Another friend soon connected Liu to a local travel agency, where he booked an eight-day trip around Taiwan, with stays in four-star hotels. But at 6000 RMB ($946) per person, it seemed a bit much. Liu felt uneasy. After all this was the first time he was making such a decision. The travel agent misunderstood Liu’s hesitancy as a hint for a discount, so immediately knocked off 100 RMB per person. Liu was amazed by the offer. And again, the agent took his reaction as a rejection of the offer, and continued to bargain: “Tell us frankly how much you want, my brother, and we’ll arrange everything. No worries, we deal with such arrangement. We’ll get you something additional on the flights.”

Liu handed the dossier for the proposed business trip to his superior. What a surprise. Not only did he endorse it right away, he told Liu to purchase delicious Taiwan specialties on the trip. Liu had never expected that by spending money for his office, he could also put something aside for himself. But obviously, he realized, someone else was making even more than he did.

The Year-End Feast

Chang Yixuan, who has been working in the governmental travel sector for more than 10 years, was happy to talk about his business. For a lot of travel agencies, the year-end government tour groups are their biggest business. They set up so-called “Big Client Departments” to cater to these high-end groups. They provide tailor-made pleasure trips dubbed as “Fact-finding seminars” or “Business opportunity evaluations trips.”

“These people want the best and the most expensive of everything,” says Chang. “Nothing else matters.”

Trying to alleviate the “pressure” of how to spend the remaining budget at the end of the year, certain government departments negotiate their yearly travel plan right at the beginning of the year. For the travel agencies, no one is a better client than a public servant. The 12% profit margin is much higher than ordinary public tours.

China’s Ministry of Finance has repeatedly stressed the need for supervision of how Chinese officials manage their budgets. But with general public services spending increasing more than 10% each year, expenditure like Liu’s is a drop in the bucket.

Fortunately, Liu can relax and does not have to worry about the tens of millions remaining in the budget. “The leaders take the burden of spending the leftover money on themselves… small personal expenses like five star hotels, and top class suits and drinks, but they can also renew their fleet of cars, or pass large orders for office supplies. They take care of the problem.”

Read the original article in full in Chinese

Photo - unfoldedorigami

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About this article source Website: http://eeo.com.cn/

The Economic Observer is a weekly Chinese-language newspaper founded in April 2001. It is one of the top business publications in China. The main editorial office is based in Beijing, China. Inspired by the Financial Times of Britain, the newspaper is printed on peach-colored paper.

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