Latest news with #LishengWang
Business Times
11 hours ago
- Business
- Business Times
China land sales income hits decade low, widening budget deficit
[BEIJING] China's revenue from selling land plunged to the lowest in a decade, contributing to the widening of the budget deficit as the government ramped up spending in support of the economy. Land sales revenue slumped 14.6 per cent on year to 194.1 billion yuan (S$35 billion) last month, the lowest since May 2015. The figure, based on Bloomberg calculations from the Ministry of Finance (MOF) data released on Friday (Jun 20), reversed a 4.3 per cent growth in April, which had been the first increase in three months. The contraction contributed to a decline in overall government income, which reached 11.2 trillion yuan in the first five months of the year. The MOF only releases combined figures for January and February, which are averaged for comparing monthly land sales values. Meanwhile, total expenditure jumped to 14.5 trillion yuan as authorities increased spending at the fastest pace in three years to bolster economic growth, pushing the budget deficit to 3.3 trillion yuan. The slump in land sales underscores the persisting weakness in the property market, a major domestic drag on the Chinese economy, which is also contending with higher US tariffs on exports. This has also strained local government finances, limiting their ability to expand investment to aid growth. 'We maintain our forecast that government land sales revenue may decline further this year by 5 to 10 per cent, and continue to believe property construction and investment have not yet hit the bottom,' Lisheng Wang, an economist with Goldman Sachs, wrote in a note after the data release. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Revenue from real estate-related levies, including deed tax paid on property purchases, fell 8.6 per cent on the year in May, deepening from a 0.9 per cent drop the previous month. Total tax income increased 0.6 per cent for the month, decelerating from a 1.9 per cent gain in April. The government's spending push has been key in shoring up the domestic demand this year. Its consumer goods trade-in programme, for instance, boosted purchases of electronics and home appliances with subsidies funded by special sovereign bond issuance. The programme was so popular that some provinces temporarily suspended subsidies after exhausting national government allocations, prompting Beijing to assure consumers that more funds would be provided in the third and fourth quarters. Goldman's Wang expects further fiscal expansion in the second half to mitigate deflationary pressures in some sectors and bolster market confidence. A budget revision later this year remains possible, he said, though not urgent given that economic growth appears on track to exceed 5 per cent in the January to June period. BLOOMBERG
Yahoo
19-04-2025
- Business
- Yahoo
China accelerates budget spending to counter tariff woes
(Bloomberg) — China expanded government spending at the fastest rate for any first quarter since 2022, ramping up support for an economy bracing for foreign demand declines as a trade war with the US intensifies. DOGE Visits National Gallery of Art to Discuss Museum's Legal Status Trump Administration Takes Over New York Penn Station Revamp DOGE Places Entire Staff of Federal Homelessness Agency on Leave Trump Signs Executive Orders on Federal Purchasing, Office Space How Did This Suburb Figure Out Mass Transit? The combined expenditure in the general public budget and the government fund account, China's two main fiscal books, rose to 9.26 trillion yuan ($1.3 trillion) in the first three months, an increase of 5.6% from the same period a year earlier, according to Bloomberg calculations based on data released by the Ministry of Finance on Friday. That was the strongest gain for the first quarter in three years. The numbers meant nearly 22% of the outlays planned for the full year was spent in the period, faster than 21.6% at the same point last year. China has to strengthen public spending to shield the economy as surging American tariffs could send its exports into contraction while a years-long housing market downturn and deflation keep consumer and business sentiment weak. Its growth held up in January-March, but economists broadly expect it to slow sharply from the second quarter after the wave of export front-loading passes and benefits from a consumer trade-in program taper off. Several major banks have downgraded their forecast on China's expansion this year to 4% or lower, well below the government's goal of around 5%. Officials are focusing on implementing supportive measures announced at last month's parliamentary session, though they also said they have ample scope and tools to add stimulus when necessary. 'Fiscal policy will turn from a growth drag last year to a major driver this year, although it should be still insufficient to fully offset the impact of external shocks,' Goldman Sachs Group Inc. economist Lisheng Wang wrote in a Saturday note. Top leaders will likely strengthen the easing rhetoric in the meetings of the Communist Party's decision-making Politburo this month and in July, and the National People's Congress could approve an extra-budget bond issuance quota later this year, he said. The central bank is expected to cut policy rates, lower the amount of reserve lenders must keep in reserve, and buy bonds as the government further accelerates debt issuance and spending of the money raised in coming months, he added. Faster tax rebate payouts have been cited by some analysts as an option to help offset some squeeze posed by US tariffs on exporters. The payout as a share of exports last month came in at 11%, only up slightly from the level a year earlier, according to Bloomberg calculations based on official data. The property downturn remained a drag on government income last month, with land sales shrinking 16.5% on year and real estate-related revenues falling 0.1%. Tax revenue declined on year for a second straight month while the increase in non-tax income almost halved. Local authorities rushed to sell bonds to swap the so-called 'hidden debt' onto their books in a program aimed at alleviating their cash strains and reducing excessive fines imposed on businesses, which are a source of non-tax income. The continued contraction in land sales and tax revenues meant total income under the two major budgets fell 2.6% on year to 6.94 trillion yuan in the first quarter. The gap between government income and spending broadened as a result, with the broad budget deficit soaring 41% on year to 2.3 trillion yuan. (Updates with economist's comments. An earlier version corrected data for 2023-2024 average for February in second chart.) It's Legal to Pay US Workers With Disabilities as Little as 25¢ an Hour How Mar-a-Lago Memberships Explain Trump's Tariff Obsession Trump Is Firing the Wrong People, on Purpose Trade Tensions With China Clear Path for Salt-Powered Batteries The Monastery Where Founders Meditate on Code and Profit ©2025 Bloomberg L.P. Sign in to access your portfolio
