Official figures point to a sharp decline in China’s fiscal revenues since the start of 2020 as a result of the economic impacts of the COVID-19 pandemic.
Figures released by the Ministry of Finance (MOF) on 18 May indicate that during the period from January – April 2020 China’s national general public budget revenues were 6.2133 trillion yuan (approx. USD$880 billion), for a YoY decline of 14.5%.
Central government general public budget revenues were 2.8522 trillion yuan, for a YoY decline of 17.7%, while local government general public budget revenues were 3.3611 trillion yuan, for a YoY decline of 11.5%.
National tax revenues were 5.3081 trillion yuan for the period, for a YoY decline of 16.7%, while non-tax revenues were 905.2 billion yuan, for a YoY rise of 1%.
During the period from January – April national general public budget expenditures totalled 7.3596 trillion yuan, for a YoY decline of 2.7%.
Central government general public budget expenditures were 1.0315 trillion yuan, for a YoY rise of 0.1%, while local government general public budget expenditures were 6.3281 trillion yuan, for a YoY decline of 3.2%.
On 27 March a meeting of the Chinese Politburo made reference to the need for “appropriate increases in the fiscal deficit,” while the current finance minister has also similarly flagged a rise in debt levels.
Domestic analysts expect China’s deficit-to-GDP ratio to breach the 3% threshold in 2020 as a result of the COVID-19 pandemic, while ex-finance minister Lou Jiwei recently called for an increase to 5.8%.
The prospect of a sizeable increase in deficit levels has triggered heated public debate in policymaking circles over whether or not China should monetise its fiscal deficit via money printing.
Related stories
Heated Debate over Deficit Monetisation Continues in Chinese Policy Circles