China has seen a sizeable rise in transfer payments made by the central government to regional local governments in the first half of 2020 during the spread of the COVID-19 pandemic.
China’s national general public budget revenues for the period from January to June 2020 were 9.6176 trillion yuan (approx. USD$1.37 trillion) for a decline of 10.8% compared to the same period last year, according to figures released by the Ministry of Finance (MOF) on 17 July.
National general public expenditures were 11.6411 trillion yuan, for a YoY decline of 5.8%.
Central government transfer payments to local government have been 8.3915 trillion this year, for an increase of 950 billion yuan compared to last year, and a rise of 12.8%.
According to MOF this increase is the highest in terms of both size and percentage in recent years, with transfer payments focused on China’s central and western regions as well as disadvantaged areas.
MOF said that this year the COVID-19 pandemic had put far greater pressure on the grassroots “Three Protections” (三保) (protecting livelihoods, protecting wages, protecting the operation of the economy).
Special arrangement transfer payments were 605 billion yuan, for supporting revenue shortfalls and “Three Protections” gaps of local governments.
China Steps up Government Bond Issuance in 2020 to Deal with COVID-19 Impacts
Chinese Central Bank to Pay Interest on Centralised Customer Deposits of Payments Companies
China’s Fiscal Authorities Allocate over USD$10 Billion towards Containment of Coronavirus
Don’t Stigmatise Shadow Banking as a Delinquent Child: Chinese Academy of Fiscal Sciences Chair