China’s state firms to pay US$260 billion in profits to help fund Beijing’s spending spree
- People’s Bank of China and other state-owned institutions and monopolies are required under Chinese law to pay part of their profits to the government
- The law had been suspended for two years due to the coronavirus, but they are now expected to pay a total of 1.65 trillion yuan (US$261 billion) in profits this year
China’s central bank will be among state financial institutions paying some of their profits, including arrears, to the government this year to fund an increase in fiscal spending, the finance ministry said on Tuesday.
The People’s Bank of China and other state-owned institutions and monopolies are required under Chinese law to pay part of their profits to the government, although it had been suspended for two years due to the coronavirus, the finance ministry said in a statement on its website.
China Investment Corporation, the sovereign wealth fund, and China National Tobacco Corporation, the world’s biggest cigarette maker, are among the financial institutions and monopolies that will pay surplus profits from previous years, it said.
The payments and other fund transfers will help boost fiscal spending by 2 trillion yuan this year, the ministry said.
China will step up its fiscal spending this year to support the slowing economy, despite a lower budget deficit ratio, Finance Minister Liu Kun has said.