Beijing mayor calls for belt-tightening amid ‘external uncertainties’, revenue squeeze
- Under pressure from slowing economy, big-ticket commitments and dwindling income, city will cut spending by at least 5 per cent this year
Beijing city will slash its general expenditure by at least 5 per cent for 2019, its mayor said on Monday, citing tough fiscal challenges from “growing external economic uncertainties”, tax cuts and commitments like the Winter Olympics.
“[Officials] should be prepared to tighten their belts,” mayor Chen Jining said as he delivered his annual government report. “Despite stable economic growth, downward pressure leads to gaps between fiscal revenue and expenditure.”
Analysts said the fiscal challenges facing the capital city could also be a problem for other local governments struggling with a slowing economy amid the ongoing trade war with the United States.
Chen projected economic growth at 6 per cent to 6.5 per cent for the city this year, but said the government’s revenue was expected to grow by only 4 per cent – compared to a 6.5 per cent rise in 2018.
According to the budget, traditional revenue sources like the property sector had “fluctuated” as measures were taken to curb housing prices, China News Service reported.
Meanwhile, “growing external economic uncertainties” are expected to add to pressure on the city government’s finances.