The fiscal strain on provincial governments across China isn't a new issue, particularly over the past three years due to spending on pandemic control and lockdown measures. According to the annual budget reports of local Chinese governments, just in 2022, the national government spent at least 352 billion yuan on handling the pandemic.
This year, with economic growth falling short of expectations and a series of collapses in the real estate market, local governments are losing their primary revenue source from land sales. Combined with the withdrawal of foreign investment and reduced local tax revenues due to lockdowns, these factors have led to a severe fiscal crisis for many local governments this year, with some even on the brink of bankruptcy.
#chinaeconomy #chinaobserver
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This year, with economic growth falling short of expectations and a series of collapses in the real estate market, local governments are losing their primary revenue source from land sales. Combined with the withdrawal of foreign investment and reduced local tax revenues due to lockdowns, these factors have led to a severe fiscal crisis for many local governments this year, with some even on the brink of bankruptcy.
#chinaeconomy #chinaobserver
All rights reserved.