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The Supreme People’s Court in China has implemented a nationwide reform of early release since 2016, which connects the fulfillment of prison inmates’ monetary obligations—the payment of fines and restitutions—to their eligibility of parole and sentence commutation. This reform has had a huge impact in practice but little is known how it has actually functioned. Based on a multi-site survey conducted in several Chinese prisons, this study shows that the reform had little impact on the actual fulfillment of monetary obligations, as most inmates were unable to pay monetary sanctions in full and on time. Meanwhile, this reform creates a more intense strain on their lives and that of their families, which increased the risk of recidivism when they go back to the community. The negative effects of this policy reform appeared to have fallen most heavily on the most disadvantaged people in China.