China’s Fiscal Revenue Improves but Spending Momentum Fades
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China’s fiscal revenue growth remained solid in April as recovering factory-gate prices and steady industrial activity boosted tax receipts, though weaker government spending pointed to persistent pressure on domestic demand.
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- China's general public budget revenue rose 6.7% year-on-year in April, the second consecutive month of growth above 6%.
- Corporate income tax returned to growth in April, supported by rising industrial profits in Q1.
- GPB spending fell 3.2% in April, while local land sales revenue dropped 34.8%, reflecting persistent property downturn.
1. China's fiscal revenue showed consistent growth in April 2025, supported by recovering factory-gate prices and steady industrial activity, which boosted tax receipts. However, weaker government spending indicated ongoing pressure on domestic demand. [para. 1]
2. General public budget (GPB) revenue increased by 6.7% year-over-year in April, marking the second consecutive month of growth above 6%, according to data from the Ministry of Finance. The GPB is the largest of the four budgets in China's fiscal system. [para. 2]
3. Corporate income tax returned to growth in April, following a jump in industrial profits during the first quarter of the year. [para. 3]
4. In contrast, GPB spending fell by 3.2% in April, after slowing in the previous month. This decline could weigh on investment activity, as China's fixed-asset investment slipped back into contraction in the first four months of 2025, based on earlier official data. [para. 4]
5. Local governments' revenue from land sales—a key funding source—dropped by 34.8% in April, extending the negative impact of the property downturn on the government-managed funds budget. [para. 5]
- First quarter of 2026：
- Industrial profits jumped.
- First four months of 2026：
- China's fixed-asset investment slipped back into contraction.
- April 2026：
- General public budget (GPB) revenue rose 6.7% year-on-year, marking the second straight month of growth above 6% in 2026.
- April 2026：
- Corporate income tax returned to growth.
- April 2026：
- GPB spending fell 3.2%.
- April 2026：
- Local governments' revenue from land sales fell 34.8%.
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