The latest fiscal revenue and expenditure data for the period of January to April 2026 released by the Chinese Ministry of Finance reveals a mixed financial picture in the country. While overall fiscal revenue has maintained growth, a closer look at specific indicators shows a stark contrast in various sectors. The stock market trading frenzy has boosted stamp tax revenue, but the real estate sector continues to drag down local finances. Corporate profits have not significantly improved, and the debt pressure on local governments has further intensified.
In the first four months of this year, the national general public budget revenue reached 8.34 trillion yuan, a year-on-year increase of 3.5%. Meanwhile, the national general public budget expenditure was 9.48 trillion yuan, up by 1.3% compared to the same period last year. Central fiscal revenue increased by 4.6% year-on-year, higher than the 2.7% growth in local finances, indicating that local financial pressure is still greater than that of the central government.
It is worth noting that the credibility of official Chinese economic data continues to be questioned by the outside world. Against the backdrop of ongoing stagnation in the real estate sector and the expanding pressure of local debts, some economic pressures may not be fully reflected in the official data.
In terms of tax revenue, the national tax revenue for the period from January to April reached 6.8097 trillion yuan, a 3.9% increase year-on-year. The most notable is the stamp tax revenue from securities trading, which surged by 74.8% to 935 billion yuan, driving an overall increase of 27.8% in stamp taxes. This reflects a significant rebound in domestic stock market trading activity in the first four months. Additionally, individual income tax saw a double-digit growth of 12.2%, reaching 603.1 billion yuan.
Since the beginning of the year, under the official market stabilizing policies, trading volume in A-share market notably increased. Particularly since May, tech stocks such as semiconductors, AI, and computing power have continued to rise, with market funds concentrating on the tech sector, leading to a rapid increase in trading volume.
Recently, the People’s Bank of China published the “April 2026 Financial Statistics Report.” Financial news site Caixin reported that in April, national resident deposits decreased by 1.94 trillion yuan, an increase of about 550 billion yuan compared to the same period last year. Meanwhile, deposits in non-bank financial institutions such as securities, funds, and wealth management surged by 2.47 trillion yuan, nearly 900 billion yuan higher than the previous year.
This indicates that some residents are shifting funds from bank deposits to capital markets such as stocks and funds.
However, financial blogger “Anxious Cola Cake” believes that although capital is flowing into the capital market, the rising stock market has not significantly boosted consumer spending. Many investors feel that despite the continuous rise in stock indices, not many are actually making profits. The wealth effect has not yet significantly translated into consumer spending.
In contrast to the stock market fervor, revenues related to the real estate sector continue their downward trend. In the first four months, deed tax revenue reflecting housing transaction activity amounted to 137 billion yuan, a 15.3% decrease year-on-year; while land value-added tax was 152.2 billion yuan, down by 15.6%, indicating continued sluggishness in real estate transactions and development activities.
Of particular concern is the continuous sharp decline in local government land sales revenue. Data shows that from January to April, national government fund budget revenue was 1.02 trillion yuan, a decrease of 18.9% year-on-year, with local government fund revenue at 871.7 billion yuan, a 22.1% decrease.
Especially critical is the significant drop in revenue from the sale of state-owned land use rights, a key source of local government revenue, which decreased by 27.2% to 680.1 billion yuan.
For a long time, Chinese local governments have heavily relied on “land finance.” With the contraction of real estate investment and a cooling land market, local fiscal revenue has been directly impacted. In recent years, as several major real estate companies face debt crises, the land market remains depressed. To ease financial pressures, many local governments have resorted to delaying project payments, postponing infrastructure projects, cutting fiscal expenditure, and even reducing government salaries and external personnel.
The changing structure of fiscal expenditure also reflects an increasing financial burden on local governments. In terms of expenditure, infrastructure and investment-related spending significantly contracted in the first four months, compared to the past when these areas were key economic drivers.
Data shows that in the first four months of this year, social security and employment expenditure increased by 7.3%; health expenditure rose by 11.4%; and debt servicing expenditures grew by 6.5%.
However, on the other hand, several infrastructure and investment-related expenses clearly slowed down: agricultural, forestry, and water expenditures declined by 10.2%; transportation expenditures dropped by 3.6%; urban and rural community expenditures fell by 1.2%; and technology expenditures decreased by 1.8%.
It is noteworthy that debt servicing expenditures continue to rise, indicating that the issue of local debts is still accumulating.
For many years, Chinese local governments have raised substantial debts through urban investment platforms to drive infrastructure and land development. Now, with declining land revenue and economic slowdown, the pressure to repay debts in some regions is steadily increasing.
Despite official efforts in recent years through reserve requirements, interest rate cuts, and liquidity injections to stimulate the economy, fundamental issues such as weak real estate performance, insufficient consumer spending, and deteriorating local finances have not been fundamentally resolved.
Multiple finance bloggers in mainland China believe that the country’s economy still heavily relies on policy stimuli and liquidity support, while deep-seated problems such as sluggish real estate, weak consumer demand, and deteriorating local finances have not been effectively addressed to date.