‘Foundations’ of China’s economic rebound yet to be ‘consolidated’ as fiscal revenue fell in 2020

China’s fiscal revenue fell 3.9 per cent in 2020 from a year earlier, while expenditure rose 2.8 per cent, the finance ministry said on Thursday

However, growth in fiscal revenue accelerated to 5.5 per cent in the fourth quarter, from 4.7 per cent the previous quarter

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China said the ratio of 2020 government debt-to-gross domestic product stood at 45.8 per cent, which was lower than the international redline of 60 per cent. Photo: Getty Images

Published: 12:42pm, 28 Jan 2021Updated: 12:43pm, 28 Jan 2021

China’s fiscal revenue fell 3.9 per cent in 2020 from a year earlier, while expenditure rose 2.8 per cent, the finance ministry said on Thursday, underscoring the difficulties in government finances amid the coronavirus pandemic.

However, as the world’s second-largest economy bounces back from coronavirus-triggered paralysis, growth in fiscal revenue accelerated to 5.5 per cent in the fourth quarter, from 4.7 per cent the previous quarter, the ministry added.

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 companies by more than 2.5 trillion yuan (US$386 billion), 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

China’s finance ministry

“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.