China 2020 fiscal spending up 2.8% y/y, revenue falls 3.9% By Reuters

© Reuters. Residential buildings under construction are seen near the central business district (CBD) in Beijing

BEIJING (Reuters) – China’s fiscal revenue fell 3.9% in 2020 from a year earlier, while expenditure rose 2.8%, the finance ministry said on Thursday, underscoring the difficulties in government finances amid the COVID-19 pandemic.

However, as the world’s second-largest economy bounces back from COVID-triggered paralysis, growth in fiscal revenue accelerated to 5.5% in the fourth quarter, from 4.7% the previous quarter, the ministry said in a statement on its website.

China’s economy picked up speed in the fourth quarter, with growth beating expectations as it ended a rough coronavirus-striken 2020 in remarkably good shape and remained poised to expand further this year even as the global pandemic rages unabated.

The finance ministry expects tax and fee cut efforts last year helped reduce burdens on corporates by more than 2.5 trillion yuan, and pledged to continue implement reforms in value-added tax and personal income tax to maintain the necessary support to the economic recovery.

“Some industries are still digesting the negative impact brought by the pandemic and the foundations of a steady economic rebound are yet to be consolidated,” said the ministry.

It added the ratio of 2020 government debt to GDP stood at 45.8%, which was lower than the international redline of 60%.

Going forward, authorities would maintain a stable macro leverage ratio, balancing the needs of economic growth and risk control, said the finance ministry, adding that it would reasonably determine the size of government bonds to maintain an appropriate magnitude of spending.

It would firmly curb the increase in hidden local government debts and properly resolve the outstanding hidden debt issues, it said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.