China Fiscal Spending Soars at Twice Gain Seen in Revenue

Updated on
  • Government spending jumped to 1.61 trillion yuan in November
  • Receipts from land sales slumped 29.2% in the first 11 months

China’s government spending surged in November at more than double the pace of gains for revenue, a signal the government has stepped up fiscal stimulus.

Fiscal spending jumped 25.9 percent from a year earlier to 1.61 trillion yuan ($249 billion), while revenue rose 11.4 percent to 1.11 trillion yuan, the Ministry of Finance said in a statement on Monday. China’s government usually registers some of its biggest expenditures in the last two months of the year as provincial authorities rush to complete projects and meet spending targets.

Revenue growth this year has slowed mainly because of "slowing investment and industrial production, slumping general trade imports, falling producer prices, structural tax cuts and fee reductions," the ministry said in a statement. "While fiscal revenue growth is slowing, the pace of spending has picked up rapidly. All kinds of key expenditures are well ensured."

Policy makers are relying more and more on fiscal measures as six interest rate cuts since late last year show little sign of reviving the economy’s old growth drivers of residential construction and exports. Economists expect the central government will exceed its budget deficit target this year and expand the limit next year.

Receipts from land sales, a major revenue source for local governments, slumped 29.2 percent in the first 11 months, according to the report. But in November alone, proceeds from land sales increased 7.4 percent compared with the same month last year.

— With assistance by Xiaoqing Pi

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