China’s fiscal revenue fell 3.9% in 2020 from a year earlier, while expenditure rose 2.8%, the finance ministry said on Thursday, underscoring the difficulties in government finances amid the COVID-19 pandemic.
However, as the world’s second-largest economy bounces back from COVID-triggered paralysis, growth in fiscal revenue accelerated to 5.5% in the fourth quarter, from 4.7% the previous quarter, the ministry said in a statement on its website.
China’s economy picked up speed in the fourth quarter, with growth beating expectations as it ended a rough coronavirus-striken 2020 in remarkably good shape and remained poised to expand further this year even as the global pandemic rages unabated.
The finance ministry expects tax and fee cut efforts last year helped reduce burdens on corporates by more than 2.5 trillion yuan, and pledged to continue implement reforms in value-added tax and personal income tax to maintain the necessary support to the economic recovery.
“Some industries are still digesting the negative impact brought by the pandemic and the foundations of a steady economic rebound are yet to be consolidated,” said the ministry.
It added the ratio of 2020 government debt to GDP stood at 45.8%, which was lower than the international redline of 60%.
Going forward, authorities would maintain a stable macro leverage ratio, balancing the needs of economic growth and risk control, said the finance ministry, adding that it would reasonably determine the size of government bonds to maintain an appropriate magnitude of spending.
It would firmly curb the increase in hidden local government debts and properly resolve the outstanding hidden debt issues, it said.
