China government spending and revenue growth pick up in 2017

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China’s fiscal revenues rose 7.4 percent in 2017 to 17.26 trillion yuan (2.7 trillion US dollars) on the back of stronger-than-expected economic growth, while fiscal spending rose 7.7 percent to 20.33 trillion yuan (3.22 trillion US dollars), the Ministry of Finance said Thursday.

Those growth rates compare to 4.5 percent for revenue and 6.4 percent for spending in 2016.

The central government collected more than 8.1 trillion yuan (1.28 trillion US dollars) in fiscal revenue, up 7.1 percent year-on-year, while local governments saw fiscal revenue expand 7.7 percent to top 9.1 trillion yuan (1.44 trillion US dollars).

China's Ministry of Finance in Beijing /VCG Photo

The ministry attributed the strong growth to the country's improving economy, rising industrial prices, effective supply-side structural reforms, and other supportive policies.

The country's economy expanded 6.9 percent in 2017, with the pace of growth accelerating for the first time since 2011.

With the economy on a firm footing and fiscal revenue increasing, economists expect China to continue its efforts in tax reduction to lower business costs and sustain the strength of economic recovery.

Revenue from taxes expanded 10.7 percent year-on-year to 14.4 trillion yuan (2.28 trillion US dollars) while that from non-tax incomes dropped 6.9 percent to 2.8 trillion yuan (442 billion US dollars).

Income from value-added tax increased 8 percent year-on-year to 5.6 trillion yuan (886 billion US dollars), while the corporate income tax and personal income tax both saw faster growth of 11.3 percent and 18.6 percent, respectively.

Last year, fiscal spending rose 7.7 percent year-on-year to 20.3 trillion yuan (3.2 billion US dollars). Expenditures on energy-saving projects rose 19.8 percent to 567.2 billion yuan (89.7 billion US dollars).

The 2017 difference between spending and revenue amounted to 3.5 percent of last year’s GDP, but the figures are subject to revisions and the final amount of the deficit may be lower than preliminary indications.

China pledged to continue to implement a proactive fiscal policy in 2018, targeting a deficit equivalent to 3 percent of GDP in 2017.

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Source(s): Xinhua News Agency