Slowdown bites into China's 2012 fiscal revenues

The central government collected 5.6 trillion yuan in fiscal revenues in 2012, up 9.4 percent year-on-year, while local governments saw fiscal revenues grow 16.2 percent to 6.1 trillion yuan.

Given the slowing economic expansion, sluggish external demand and property sector curbs, local authorities started to lower their fiscal revenue target for 2013.

East China city Hefei set its annual growth for fiscal revenue at 10 percent in the next five years, 14.6 percentage points lower than that of the 2008-2012 period, while Beijing predicted 9-percent growth following the 17.3-percent real annual increase in the past five years.

Liu Shangxi, deputy director of the Research Institute for Fiscal Science under the MOF, forecast that national fiscal revenue growth will slow to a single digit but fiscal expenditure will retain a robust increase in 2013.

The Chinese government will target structural tax reduction and aid for small enterprises to boost the slowing economy, instead of massive stimulus measures, he said.

China's economic growth quickened to 7.9 percent in the fourth quarter of 2012, ending a seven-quarter slowdown after the government cautiously eased its monetary policy and fast-tracked investment projects.

However, impacted by the faltering global economy and a cooling domestic property market, the world's second-largest economy still recorded its slowest annual growth rate since 1999, expanding 7.8 percent in 2012.

The government has vowed to maintain a proactive fiscal policy and prudent monetary policy in 2013.

The country's total fiscal expenditure climbed 15.1 percent year-on-year to 12.6 trillion yuan in 2012, according to MOF data.

Spending on education recorded the fastest growth, surging 28.3 percent to 2.1 trillion yuan.

The central government spent 6.4 trillion yuan in 2012, including 4.5 trillion yuan in tax rebates and transfer payments given to local governments.

Local governments saw outlays rise 15.3 percent to 10.7 trillion yuan in 2012, the MOF data showed.

 

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