China’s Fiscal Revenue Decline and Proactive Policy Measures
In the January-February period, China’s fiscal revenue fell by 1.6%, marking a reversal from previous growth. Fiscal spending rose by 3.4%, a slowdown from earlier increases. The government has pledged a more proactive fiscal approach, including a higher budget deficit to support the economy amid trade tensions.
China’s fiscal revenue experienced a decline of 1.6% in the January-February period compared to the same timeframe last year, according to data released by the finance ministry on Monday. This decline marks a reversal from a reported 1.3% increase observed throughout 2024. Meanwhile, fiscal expenditure during the initial two months of 2025 increased by 3.4%, a rate that has slowed from the 3.6% rise seen in 2024.
In light of these fiscal challenges, China’s leadership has committed to implementing a more proactive fiscal policy this year. This approach includes raising the budget deficit ratio to approximately 4% of the country’s economic output, aimed at stimulating domestic consumption and mitigating the effects of a deteriorating trade relationship with the United States.
In summary, China’s fiscal revenue has recorded a downturn of 1.6% in early 2025, contrasting with the modest growth from the previous year. In response to these economic challenges, the government’s proactive fiscal policy will involve increasing the budget deficit to bolster consumer spending and address the impact of trade tensions.
Original Source: www.tradingview.com
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