China’s Central Government Tightens Its Belt
What’s new: Many departments, enterprises and other types of organizations under the Chinese central government cut their budgets for 2021 from what they actually spent last year, official data show, as authorities warn about the high pressure facing the government’s financial situation.
Of the 102 central government-controlled organizations that had disclosed their 2021 general public budget as of Sunday, only 11 projected higher budget spending than the previous year’s expenditure.
The organizations include central government departments, public institutions, and some state-owned enterprises (SOEs).
One of the organizations that planned a significant budget cut is China State Railway Group Co. Ltd., an SOE that operates the world’s largest high-speed railway network. It projected (link in Chinese) a 98% drop in its 2021 general budget spending from the previous year’s expenditure.
In addition, it is the first time that central government-controlled organizations have disclosed their budget revenue and spending related to state capital operations, as required by revised budget regulations. Like general public budget revenue, revenue from state capital operations is a source of public funds.
The context: The Ministry of Finance has said the outlook for the fiscal situation in 2021 appears to be “grave,” although the year’s fiscal revenue is expected to rise from 2020 amid a low baseline.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
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