Summary of Key Points from the Conference Call Industry Overview - The report focuses on the fiscal situation in China, highlighting trends in fiscal revenue and expenditure as well as property-related government revenue. Core Insights and Arguments 1. **Fiscal Revenue Growth**: On-budget fiscal revenue growth increased slightly to **3.2% year-on-year (yoy)** in October from **2.6% yoy** in September, despite a broad-based weakness in activity data [1][3][7] 2. **Fiscal Expenditure Decline**: Fiscal expenditure growth fell significantly to **-9.8% yoy** in October from **+3.1% yoy** in September, marking the lowest growth rate since December 2021 [2][7][9] 3. **Property-Related Revenue Weakness**: Property-related government revenue saw a notable decline, with land sales revenue dropping **-27.5% yoy** in October compared to **-0.9% yoy** in September. On-budget property-related tax revenue also remained weak at **-1.4% yoy** [2][8][9] 4. **Augmented Fiscal Deficit (AFD)**: The AFD metric narrowed in October, indicating a less supportive fiscal policy for growth. The AFD ratio was **-10.6% of GDP** on a 3-month moving average basis [1][3][9] 5. **Government Spending Trends**: The government’s fiscal "spend-through" ratio decreased slightly to **98.5%** in October from **98.8%** in September, suggesting a slowdown in fund deployment [9][10] 6. **Impact on Fixed Asset Investment (FAI)**: The deceleration in government spending growth, particularly in infrastructure, may have negatively impacted FAI growth, although other factors may also contribute to this trend [10] Additional Important Insights - **Non-Tax Revenue Contraction**: Non-tax revenue experienced a significant contraction of **-33.0% yoy** in October, widening from **-11.4% yoy** in September, primarily due to a high base effect [7] - **Overall Government Revenue**: Total government revenue growth slowed to **-0.6% yoy** in October from **+3.2% yoy** in September, while government expenditure growth dropped to **-19.1% yoy** from **+2.2% yoy** [9] - **Future Fiscal Policy Outlook**: There is a downside risk to the AFD forecast for this year (projected at **12.0% of GDP**), but expectations for continued fiscal expansion into next year remain, as indicated by recent policy communications [10]