China Jan-Feb fiscal spending quickens in fight to support slowing economy

People cross a bridge at Pudong financial district in Shanghai
FILE PHOTO: People cross a bridge at Pudong financial district in Shanghai August 11, 2014. REUTERS/Carlos Barria

March 18, 2022

BEIJING (Reuters) – China’s fiscal spending rose 7.0% in January-February from a year earlier, the finance ministry said on Friday, quickening from a 0.3% rise in 2021 as policymakers step up support for the slowing economy.

Fiscal spending totalled 3.8 trillion yuan ($597 billion) in the first two months of 2022, including 180 billion yuan on transport and 79 billion yuan on energy conservation and environmental protection, the ministry said.

Chinese policymakers have pledged to step up their fiscal spending this year to cushion a slowdown in the world’s second-largest economy, despite a lower budget deficit ratio.

China’s fiscal revenues in the first two months of 2022 rose 10.5% from a year earlier to 4.6 trillion yuan, the ministry said in a statement on its website, cooling slightly from a 10.7% rise in 2021.

Revenues from value-added tax rose 6.1% in January-February to 1.48 trillion yuan, while incomes from corporate income tax rose 5.4% to 912.7 billion yuan, the ministry said.

China has been stepping up outlays in infrastructure investment, mainly funded by local government special bonds, under an annual quota of 3.65 trillion yuan.

($1 = 6.3619 Chinese yuan renminbi)

(Reporting by Kevin Yao and Beijing newsroom; Editing by Jason Neely and Hugh Lawson)