China grapples with fiscal overhaul as budgets come under pressure

COVID-19 has put massive pressure on China's local governments. Fiscal revenue growth has slumped as a result of the slowing economy, the property crisis and tax cuts, while spending has surged to pay for pandemic controls and testing and to finance infrastructure investment to shore up growth.

Data released by the Ministry of Finance on Jan. 30 show that in 2022, revenue in China's general public budget grew just 0.6% to 20.4 trillion yuan ($3 trillion). Notably, revenue from taxation fell 3.5% and revenue from the sale of land-use rights fell 23.3%, while nontax revenue jumped 24.4%. Meanwhile, expenditures from the general public budget grew 6.1% from 2021 to 26.1 trillion yuan.