Revenue Insights - In July, the national general public budget revenue reached 2,027.3 billion CNY, showing a year-on-year growth of 2.7%[2] - Cumulative public finance revenue from January to July turned positive at 0.1% year-on-year, aligning with budget targets[2] - Tax revenue in July increased by 5% year-on-year, up from 1% previously, with personal income tax growing by 14%[2] Expenditure Trends - Public finance expenditure in July was 1,946.6 billion CNY, reflecting a 3% year-on-year increase, up from 0.4%[3] - Cumulative expenditure growth for the first half of the year was 3.4%, still below the annual target of 4%[3] - Social security, education, and health expenditures grew by 13%, 5%, and 14% respectively in July, indicating a focus on social welfare[3] Government Fund Performance - Government fund revenue in July was 368.2 billion CNY, marking a 9% year-on-year increase, although the growth rate has slowed[4] - Government fund expenditure reached 801.4 billion CNY in July, with a significant year-on-year growth of 42%, although this was a decrease from June's 79%[5] Fiscal Balance and Outlook - The gap in broad fiscal revenue and expenditure expanded to 5.6 trillion CNY, but the shortfall is narrowing due to improved revenue[6] - The issuance of special bonds and long-term treasury bonds has supported increased government fund expenditures, with 1.1 trillion CNY in special bonds issued in June and July[5] - The broad fiscal deficit is expected to remain high in Q3, with a potential decline in Q4 as bond issuance slows down[6]

Core Insights - The national narrow fiscal revenue growth has turned positive, reflecting a stable economic recovery [2][3] Fiscal Revenue Overview - From January to July, the national general public budget revenue reached 135,839 billion yuan, with a year-on-year growth of 0.1% [3] - The revenue growth rate has shown a gradual decline this year, but the decrease is narrowing, with July's revenue growth rate reaching a new high of 2.6% [3] - Tax revenue, which is a major component of fiscal revenue, totaled 110,933 billion yuan, down 0.3% year-on-year, but the decline is also narrowing [3][5] Tax Revenue Analysis - In July, tax revenue was 18,018 billion yuan, showing a year-on-year increase of 5%, marking a continuous recovery since April [3][5] - The four major tax categories showed improvement, with domestic VAT increasing by 3%, domestic consumption tax by 2.1%, and personal income tax by 8.8% [5] - Despite a decline in corporate income tax by 0.4%, the reduction is significantly less than in the first half of the year [5] Non-Tax Revenue Insights - Non-tax revenue for the first seven months was 24,906 billion yuan, growing by 2%, which is significantly lower than the previous year's growth of 12% [6] - Government fund revenue, primarily from land sales, saw a decline, but the decrease is narrowing due to increased competition for quality land in core cities [6] Fiscal Expenditure Trends - General public budget expenditure reached 160,737 billion yuan, with a year-on-year growth of 3.4%, supporting economic stability [7] - Social welfare, education, and health expenditures grew by 9.8%, 5.7%, and 5.3% respectively, surpassing the average growth rate [7] - Government fund budget expenditure increased significantly by 31.7% to 54,287 billion yuan, directed towards major project construction and new sectors [8]

Group 1 - The overall fiscal revenue is recovering, supported by increased government bond issuance, while fiscal expenditure remains robust [1][6] - In the first seven months of the year, the national general public budget revenue reached 135839 billion yuan, with a year-on-year growth of 0.1% [2] - The tax revenue for the same period was 110933 billion yuan, showing a slight decline of 0.3% year-on-year, but the decline is narrowing [2][4] Group 2 - The growth rate of tax revenue has not kept pace with economic growth, which was 5.3% in the first half of the year [2][3] - Major tax categories showed improvement, with domestic value-added tax increasing by 3%, domestic consumption tax by 2.1%, and personal income tax by 8.8% [4] - Non-tax revenue grew by 2% to 24906 billion yuan, significantly lower than the previous year's growth of 12% [5] Group 3 - Government fund budget revenue was 23124 billion yuan, down 0.7% year-on-year, with land use rights revenue declining by 4.6% [6] - Fiscal expenditure for the first seven months was 160737 billion yuan, up 3.4%, with social security and education spending growing above average [6][7] - Government fund budget expenditure surged by 31.7% to 54287 billion yuan, primarily directed towards major project construction [7]

Revenue Performance - In May 2025, the national general public budget revenue grew by only 0.1% year-on-year, a decrease of 1.8 percentage points from April's 1.9%[1] - The broad fiscal revenue in May saw a year-on-year decline of 1.2%, slowing down by 3.9 percentage points compared to the previous month[2] - Tax revenue increased by 0.6% year-on-year in May, down from 1.9% in April, while non-tax revenue fell by 2.2% compared to a growth of 1.7% in April[3] Expenditure Trends - In May, the national general public budget expenditure grew by 2.6% year-on-year, a slowdown of 3.2 percentage points from April's 5.8%[4] - Cumulative general public budget expenditure from January to May reached 38.0% of the annual budget, exceeding the average of 37.4% over the past five years[5] - Infrastructure-related expenditures in May decreased by 7.7% year-on-year, a decline of 9.9 percentage points from the previous month[6] Government Fund Insights - Government fund revenue in May fell by 8.1% year-on-year, a significant drop of 16.2 percentage points from the previous month, primarily due to a decline in land transfer income[7] - The land transfer income in May decreased by 14.6% year-on-year, a sharp decline from April's growth of 4.3%[8] - Government fund expenditure in May grew by 8.8% year-on-year, but this was a significant decrease from April's 44.7% growth rate[9]

Summary of Key Points Core Viewpoint - The article discusses the recent trends in China's fiscal revenue and expenditure, highlighting a slight decline in growth rates for both public fiscal revenue and tax revenue in May, while also addressing the implications of these trends on broader economic conditions and fiscal policy. Fiscal Revenue Trends - In May, public fiscal revenue growth slowed to 0.1% year-on-year, down from 1.9% in the previous month, while tax revenue growth also decreased to 0.6% from 1.9% [1][5][6] - Non-tax revenue turned negative for the first time in 2024, with a year-on-year decline of 2.2%, attributed to reduced reliance on non-tax revenue and a significant downward adjustment in the growth target for non-tax revenue [1][5] - Cumulatively, public fiscal revenue for the first five months showed a year-on-year decline of 0.3%, narrowing the gap from the annual target by 0.37 percentage points [1][5] Tax Revenue Breakdown - Value-added tax performed well with a cumulative year-on-year increase of 2.4%, likely linked to improved industrial profits [8] - Personal income tax saw a significant increase of 8.2% year-on-year, influenced by a low base, tax reconciliations, and active second-hand housing transactions [8] - Consumption tax showed neutral performance, with a cumulative year-on-year growth of 1.6%, reflecting a mismatch with high retail sales growth [9] Fiscal Expenditure Insights - In May, narrow fiscal expenditure growth slowed to 2.6%, with central government expenditure rising by 11.0% and local government expenditure increasing by 0.9% [12] - The resilience in expenditure is attributed to the accelerated issuance of ordinary government bonds, which reached 39% of the annual target by May, the highest level in recent years [12][13] - Social security and employment expenditures maintained high growth rates, reflecting strong fiscal support for social security funds and employment policies [12] Broader Fiscal Context - Government fund revenue growth turned negative again in May, with a year-on-year decline of 8.1%, primarily due to a significant drop in land use rights revenue [15][16] - The real estate market's performance is a key constraint, with land sales showing a downward trend in April and May [15][16] - The overall fiscal situation indicates that while narrow fiscal targets may be met, broader fiscal outcomes remain uncertain due to fluctuations in the land market [15][16] Future Outlook - The improvement of macroeconomic price levels, particularly the Producer Price Index (PPI), is crucial for enhancing corporate profits and tax revenues [17] - The establishment of new policy financial tools is anticipated to support infrastructure investment and credit growth, potentially alleviating construction sector challenges [17]

Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first five months of 2025, highlighting a stable fiscal income but an expansion in fiscal expenditure to support economic stability and demand growth [1]. Fiscal Revenue - National general public budget revenue for January to May reached 96,623 billion yuan, a year-on-year decrease of 0.3%, which is a slight improvement from the previous four months' decline of 0.4% [1]. - Government fund budget revenue was 15,483 billion yuan, showing a year-on-year decline of 6.9%, which is a slight increase in the decline compared to the previous four months' 6.7% [1]. - Tax revenue, which is a key component of fiscal income, totaled 79,156 billion yuan, down 1.6% year-on-year, but this decline is less severe than the previous four months' 2.1% [1]. - Corporate income tax revenue for the first five months was 21,826 billion yuan, down 2.5% year-on-year, although the decline is narrowing as industrial profits have turned positive [1][2]. Factors Affecting Revenue - The real estate market remains sluggish, leading to a decline in related tax revenues, such as deed tax and land value-added tax, which experienced double-digit decreases [2]. - Complex foreign trade conditions, including trade wars, negatively impacted fiscal revenue, with significant declines in import VAT, consumption tax, and customs duties [2]. - Low prices have also reduced nominal fiscal income, with the Producer Price Index (PPI) falling by 3.3% year-on-year in May 2025, affecting tax bases like VAT [3]. Tax Revenue Performance - Despite overall tax revenue declines, certain sectors showed strong performance, particularly in manufacturing and services. For instance, tax revenue from railway, shipbuilding, and aerospace manufacturing grew by 28.8%, while computer and communication equipment manufacturing increased by 11.9% [4]. - In the service sector, tax revenue from cultural, sports, and entertainment industries rose by 7.8%, and the information transmission and software services sector saw a 10% increase [4]. Non-Tax Revenue - Non-tax revenue for the general public budget reached 17,467 billion yuan, a year-on-year increase of 6.2%, primarily driven by asset activation [5]. Fiscal Expenditure - Total general public budget expenditure for January to May was 112,953 billion yuan, a year-on-year increase of 4.2%, which is significantly higher than the revenue growth rate [6]. - Key expenditure areas such as social security and employment saw growth rates of 9.2% and 6.7%, respectively, indicating strong support for public welfare [6]. - Government fund budget expenditure increased by 16% to 32,125 billion yuan during the same period [7]. Government Bond Financing - Net financing from government bonds reached 631 billion yuan in the first five months, an increase of 381 billion yuan year-on-year, supporting fiscal expenditure expansion [8].

Core Viewpoint - The article highlights the divergence in fiscal revenue and expenditure in April, with a notable improvement in tax revenue contributing to a more positive outlook for fiscal policy and spending [1][3][4]. Fiscal Revenue - In April, the general public budget revenue growth rate increased to 1.9% year-on-year, with tax revenue showing a significant improvement of 4.1 percentage points, marking the first positive growth this year [1][4]. - Cumulatively, tax revenue for the first four months remains at -2.1% year-on-year, with corporate income tax down by 3.1%, primarily due to low PPI [1][4][5]. - The performance of major tax categories in April was neutral, with corporate income tax contributing 1.21 percentage points to revenue growth, while personal income tax rose by 67.5% year-on-year, largely due to base effects [5][8]. Fiscal Expenditure - Fiscal expenditure showed a more positive trend, with a year-on-year increase of 5.8% in April and a cumulative growth of 4.6% for the first four months, exceeding the annual target growth rate of 4.4% [1][8]. - The expenditure progress for the first four months reached 31.5%, the second highest level in recent years, driven by spending on social security, education, and infrastructure projects [1][8][9]. - The issuance of ordinary government bonds was significantly advanced, contributing to the increase in fiscal spending [8][9]. Broader Fiscal Context - The government fund revenue also turned positive in April, with a year-on-year growth of 8.1%, driven by land sales and expected recovery in government fund income [2][15]. - The government fund expenditure rose sharply by 44.7% year-on-year in April, significantly outpacing revenue growth, indicating strong fiscal support for infrastructure and development projects [18][19]. - The overall fiscal revenue growth remains low, necessitating further measures to stabilize growth and expand domestic demand, with a notable fiscal deficit of 2.65 trillion yuan in the first four months [3][19].

Revenue Performance - In March 2025, national general public budget revenue increased by 0.3% year-on-year, an improvement from a decline of 1.6% in January-February[1] - Cumulative general public budget revenue for Q1 2025 decreased by 1.1% year-on-year, lower than the full-year growth rate of the previous year[2] - Cumulative government fund revenue for Q1 2025 fell by 11.0% year-on-year, compared to a decline of 10.7% in January-February[1] Expenditure Trends - Cumulative general public budget expenditure for Q1 2025 grew by 4.2% year-on-year, an acceleration of 0.6 percentage points compared to the previous year[6] - In March 2025, general public budget expenditure increased by 5.7% year-on-year, up 2.3 percentage points from January-February[8] - Cumulative government fund expenditure for Q1 2025 rose by 11.1% year-on-year, significantly higher than the 1.2% growth in January-February[1] Tax Revenue Insights - In Q1 2025, tax revenue decreased by 3.5% year-on-year, while non-tax revenue increased by 8.8%[3] - In March 2025, corporate income tax revenue surged by 16.0% year-on-year, a significant increase of 26.4 percentage points compared to January-February[4] - Personal income tax revenue in March 2025 plummeted by 58.5% year-on-year, contrasting with a 26.7% increase in January-February, primarily due to the timing of the Spring Festival[4] Land Market and Special Bonds - Cumulative land use rights transfer revenue in Q1 2025 fell by 15.9% year-on-year, indicating ongoing weakness in the real estate market[9] - The issuance of special bonds in Q1 2025 was significantly high, contributing to a substantial increase in government fund expenditure[9] - Future issuance of special bonds and long-term special treasury bonds in April 2025 is expected to enhance investment and consumption stability[9]

Revenue Performance - In January-February 2025, general public budget revenue decreased by 1.6% year-on-year, slightly below the annual revenue budget target by 0.1%[5] - Tax revenue fell by 3.9% year-on-year, a decrease of 6.6 percentage points compared to the previous month[5] - Non-tax revenue increased by 11% year-on-year, but this was a significant drop of 83 percentage points from the previous month[5] Expenditure Trends - General public budget expenditure grew by 3.4% year-on-year, maintaining a rapid expenditure pace[5] - Social welfare and employment expenditures rose by 5.4%, reflecting a focus on social security and health spending[5] - Government fund expenditure increased by 1.2% year-on-year, with central government fund expenditure soaring by 74.2%, contrasting with a mere 0.6% increase at the local level[5] Future Outlook - The fiscal policy is expected to focus on increasing the deficit ratio and expenditure intensity, with plans for special bond issuance to accelerate spending[5] - There is an emphasis on supporting domestic demand and consumption, particularly in social security and employment sectors[5] - The central government has reserved sufficient tools and policy space to potentially introduce incremental policies throughout the year based on changing internal and external conditions[5]

Core Viewpoint - The article discusses the 2025 fiscal budget proposal, highlighting a shift towards a more proactive fiscal policy with an emphasis on flexibility in deficit targets and a focus on key areas such as technology, security, and public welfare [1][2][3]. Group 1: Fiscal Policy Adjustments - The 2025 fiscal budget sets a deficit rate of "around 4%", allowing for potential adjustments mid-year, which is a departure from the rigid numerical targets used in previous years [1]. - The budget reflects a more pragmatic approach to nominal GDP growth estimates, revising the implicit nominal GDP growth rate down from 7.4% in 2024 to 4.9% in 2025 [4]. Group 2: Spending Focus - The fiscal spending for 2025 will increasingly target technology, security, and public welfare, with notable increases in allocations for education, diplomacy, national defense, and scientific research [2]. - In contrast, spending related to infrastructure, rural community development, and transportation is expected to decrease in importance [2]. Group 3: Revenue Adjustments - The budget anticipates a significant reduction in non-tax revenue, with a projected year-on-year decline of 14.2%, reflecting a strategy to lessen reliance on unsustainable revenue sources [3]. - Tax revenue expectations remain high, with positive growth targets set for most tax categories, excluding specific taxes like the tonnage tax on ships and vehicle purchase tax [3]. Group 4: Debt Issuance - The central government's bond issuance is projected to rise, with central government bonds accounting for 56.2% of total government bond issuance, marking a shift where central debt issuance surpasses local [5]. - This indicates a greater responsibility for counter-cyclical fiscal adjustments being placed on the central government [5]. Group 5: Challenges in Fund Revenue - The budget acknowledges potential difficulties in meeting government fund revenue targets due to the ongoing challenges in the real estate market and declining land use rights revenue [6].