China Economy: Fiscal expenditure rose to over $3.5 trillion in 2022
Last year, China’s fiscal expenditure rose by over six percent, reaching 3.7 trillion U.S. dollars. The government provided financial support to help economic and social development amid the COVID-19 pandemic.
LIU KUN Chinese Minister of Finance “In 2022, the ministry strengthened the implementation of fiscal policies and worked to stabilize economic markets. In the past five years, the overall deficit rate has been kept under three percent, and policy space has been reserved for coping with new difficulties and challenges.”
Meanwhile, China’s fiscal revenue rose 0.6 percent in 2022, a sharp drop from the 10.7 percent increase in 2021 which was in part due to large tax rebates. The ministry said it helped take pressure off enterprises, especially small and medium businesses which suffered during the pandemic.
ZHU ZHONGMING Deputy Minister, Ministry of Finance “Tax reductions, refunds and deferments exceeded 600 billion USD in 2022 (4.2 trillion yuan). Last year, China’s tax revenue as a proportion of GDP fell to 13.8 percent. The cash flow of enterprises has increased, as well as their resilience in dealing with risks and challenges.”
CHEN YILIN Beijing “Recently, many organizations and agencies including the IMF and the World Bank have raised China’s growth forecast for 2023. The ministry says it will continue to use proactive fiscal policy and prudent monetary policy this year. It also says one of the key challenges it faces is in improving the effect of policies and targeting key areas.”
LIU KUN Chinese Minister of Finance “On one hand, we should improve tax preferential policies, enhance accuracy and pertinence. On the other hand, we should optimize the structure of fiscal expenditure, drive social investment and consumption, as well as support key areas like scientific and technological research, rural revitalization, and green development.”
The ministry said that while the challenge of balancing fiscal revenue and expenditure still remains, authorities will never cut expenses related to people’s livelihoods, including employment, education and healthcare. CYL, CGTN, Beijing.