The latest official data from the Chinese Communist Party shows that in the first half of the year, both national general public budget revenue and national government fund budget revenue have declined. In particular, state-owned land use rights revenue decreased by 18.3% year-on-year, indicating a continued downturn in the real estate market and a significant decrease in land sale revenue for local governments.
On July 22nd, the CCP Ministry of Finance announced the financial situation for the first half of 2024, showing that national general public budget revenue for the first half of the year was 11.5913 trillion yuan, a decrease of 2.8% compared to the previous year. Among them, tax revenue was 9.408 trillion yuan, down by 5.6% year-on-year; non-tax revenue was 2.1833 trillion yuan, an increase of 11.7% year-on-year.
According to Securities Times, Luo Zhiheng, Chief Economist of Yuekai Securities, pointed out that positive recognition should be given to the behavior of activating idle stock assets in non-tax revenue, while attention should be paid to the significant increase in confiscation revenue in certain regions to avoid worsening the business environment.
In the list of major tax revenue items officially presented, most items showed decreases. Domestic value-added tax decreased by 5.6% year-on-year, corporate income tax decreased by 5.5%, individual income tax decreased by 5.7%, and stamp duty decreased by 22.9% (including a 54% year-on-year decrease in securities transaction stamp duty).
At the same time, in the first half of the year, national general public budget expenditures reached 13.6571 trillion yuan, an increase of 2% year-on-year. Central general public budget expenditures were 1.8267 trillion yuan, up by 9.6% year-on-year; local general public budget expenditures were 11.8304 trillion yuan, an increase of 0.9% year-on-year.
Furthermore, national government fund budget revenue was 1.9915 trillion yuan, down by 15.3% year-on-year.
Looking at the central and local levels, central government fund budget revenue was 207.3 billion yuan, an increase of 8.4% year-on-year; local government fund budget own-source revenue was 1.7842 trillion yuan, a decrease of 17.4% year-on-year, with state-owned land use rights revenue at 1.5263 trillion yuan, down by 18.3% year-on-year, expanding by 4.3% compared to January-May.
Luo Zhiheng stated that the downward trend in land sale revenue in the first half of the year has put pressure on local finances, leading to a passive increase in debt risk indicators such as the visible debt ratio, and the short-term situation of a sluggish land market is difficult to improve.