China bans chauffeur-driven cars for officials to cut spending

In a major initiative to cut public spending, China has scrapped the practice of giving chauffeur-driven cars to officials and instead provided a modest allowance for them to choose their own means of travel.
China will scrap the supply of vehicles for use in regular government affairs, while keeping those for special services such as intelligence communication and emergencies, a new rule to reform the supply and use of official vehicles, said.
Jia Kang, head of the Research Institute for Fiscal Science of the Ministry of Finance (MOF), estimates the latest round of reform will involve around 800,000 government vehicles and the public expenditure was expected to drop by seven per cent.

The move is aimed to cut down hefty spending in the area amid mounting public complaints over misuse of public money, state-run Xinhua news agency reported.
The central government will instead allocate a "proper amount" in subsidies to public servants to allow them to choose their own means of transportation, it said.
The move will affect officials below the ministerial level, and subsidies will range from 500 yuan (USD 85) to 1,300 yuan (USD 215) per month depending on their positions, the guideline said.

Officials have also been directed to properly relocate drivers or other staff who may be laid off as a result of this and auction the spare vehicles in an open procedure to avoid losses of state-owned assets.

The aim is to finish reform in the central government organs by 2014 and in local governments by the end of 2015 to accomplish comprehensive reform in two to three years, the guideline aimed at cutting down the public spending said.
In China, officials above a certain level have usually been provided a driver and car for their work, but many have used the vehicles for private purposes, causing massive waste of public funds and widespread complaints.
Also, China is affecting big cuts in public spending as the economy slowed down to around 7.5 per cent from the previous double digit GDP.

In the long run, if factoring in the maintenance costs of the vehicles and other administrative fees, expenditures on government vehicles will be cut by half, according to Jia.
The Chinese government announced earlier this year it plans to use 7.151 billion yuan (About USD 1.20 billion) on such items in 2014, slightly down from last year's actual spending of 7.154 billion yuan.
This year's budget includes 4.127 billion yuan for the purchase and maintenance of government vehicles, 126 million yuan less than the figure a year earlier, the MOF said.
The latest reform in the sector comes amid the country's ongoing frugality campaign that aims to build a cleaner and more transparent government.

In December 2012, the central authorities issued the "eight-point rules," requiring government officials to strictly practice frugality and clean up undesirable work styles, including formalism and extravagance.
Since then, formerly unchecked official activities, such as dining in high-end restaurants and receiving luxury gifts, have gradually ebbed.