China 2019 fiscal spending up 8.1%, faster than economic growth

China 2019 fiscal spending up 8.1%, faster than economic growth

BEIJING (Reuters) – China’s fiscal spending climbed 8.1% in 2019 from the previous year, the finance ministry said on Monday, outpacing economic growth as policymakers sought to ward off a sharper slowdown.

Fiscal revenues increased an annual 3.8% last year, dragged by a 1.0% rise in tax receipts due to huge tax cuts, the finance ministry said a statement.

Fiscal expenditures were 23.89 trillion yuan in 2019, while revenues were 19.04 trillion yuan, the ministry said.

Tax and fee cuts exceeded 2.3 trillion yuan ($329.5 billion) in 2019, the ministry said, adding that it would continue to implement tax and fee reductions this year.

The ministry said it would closely watch changes in tax burdens on firms in various sectors, especially in light of the impact from the coronavirus outbreak.

Non-tax revenues, including incomes from state-owned firms, fines and confiscations, jumped 20.2%, the ministry said.

The finance ministry has allocated the 2020 local government special bond quota worth 1.29 trillion yuan, including 1 trillion yuan front-loaded in November, it said.

Local governments have completed 55.4% of the bond quota, the ministry said.

China’s economy grew 6.1% in 2019, the weakest pace in nearly three decades.