What’s new: China’s fiscal revenue returned to year-on-year growth in the July-to-September period at 4.7%, after shrinking for two consecutive quarters, data from the Ministry of Finance showed (link in Chinese) Wednesday.
Fiscal revenue rose year-on-year for four months from June to September as the economy steadily recovered, according to an official with the ministry.
Tax revenue shrank 6.4% year-on-year in the third quarter, milder than the 11.3% drop in the first half-year.
What’s the background: China’s fiscal revenue shrank 14.3% and 7.4% year-on-year in the first and second quarters, respectively, amid the fallout of the Covid-19 pandemic.
The government has increased the fiscal deficit and sold more bonds to raise funds to offset fallout from the pandemic and shore up the economy. In the first nine months, local governments issued 5.68 trillion yuan ($854.1 billion) of bonds, up 35.8% year-on-year, including 3.37 trillion yuan of special-purpose bonds (SPBs), according to (link in Chinese) official data. SPBs are a kind of local government debt that fund infrastructure and public welfare projects.
Related: China’s Economic Recovery Continued in Third Quarter, Though Slower Than Expected
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)
