WHAT EXACTLY is going on in Shenyang? This city of eight million people in Liaoning province rarely makes the headlines, and is generally best known as the site of the Mukden incident (or the Manchurian incident) in 1931 when the Japanese blew up a section of railway track. They used the incident as an excuse to invade and occupy China for the next 14 years.

Recent years have seen the former heavy engineering stronghold try to reinvent itself as a go-ahead second-tier city. Ireland’s Glen Dimplex has located not far from Shenyang.

Next year, Shenyang will host the National Games. This knowledge has prompted a rumour that the government is planning to make a lot of snap inspections of local businesses so that it can impose fines and swell empty public coffers.

Fears of heavy fines have forced large numbers of shops in the city to close suddenly, and residents have posted photos on the Twitter-style Weibo website showing all the shops in central shopping precincts closed. Among the reports circulating online are of shops punished for not displaying business certificates, or for selling counterfeit goods and of restaurants that have flies buzzing around.

The perception among business owners is that the local government is planning to introduce stiff penalties for dubious violations of the city’s sanitation and safety codes, amid a slowing local economy and falling tax revenues.

The government is trying to end the rumours and get the shops to open again. “Recently some small businesses closed their doors after hearing unfounded rumours,” ran a message posted by an the official microblog of Shenyang’s propaganda bureau.

“Relevant authorities have neither carried out dedicated campaigns nor imposed heavy fines,” it said.

The local police have had to issue a notice saying that a previous crackdown on counterfeit goods has ended.

The local people are not happy, however. “The situation drives me crazy. I can’t buy ice cream around the community since all the convenience shops are closed these days,” local resident Guo Xiaoguang told the China Daily. “If I want to buy necessities, I have to drive half an hour to the supermarket downtown.”

Shenyang is famous for its fighting spirit, of course. It was the capital of the Manchu empire in the 17th century, and it was from here that the banner armies of the Manchus conquered China and established Beijing as capital.