"A great challenge of life: Knowing enough to think you're doing it right, but not enough to know you're doing it wrong."
In the previous decade, the roaring teenies for China, land sales subsidised many public services. And this created a whole economic sector that relied on land sales continuing and property prices to continue to go up. The local govt is now broke, and there have been cutbacks everywhere. Salary cuts, clawbacks on bonuses, and delaying payment to the point of default for suppliers. But that does not address the fact that some services are not making money. Take the high speed rail, there are estimates that cumulative losses added to total liabilities of the HSR is at nearly USD1tr. When China was booming, it can be argued that there are spillover effects. But when the local provinces are broke (and can't subsidise their share of the 'services') because the spillover effects did not translate into tax revenue - then some level of rationalisation or price hikes are in order. "China Railway, the state-owned operator of the country’s massive high-speed network, announced last week a price increase of around 20 per cent on four of its major high-speed lines. The fare increase, which will take effect from June 15, covers some busy major routes, including between Shanghai and Hangzhou, as well as between Wuhan and Guangzhou." 20% is not a joke. Soon airfare will also rise (not as much) because they do not have to compete with China Rail at the low low prices. So will utilities. And the tax office will be more strict the next few years.
