Fri Jan 30 08:09:33 UTC 2026: Headline: China’s Fiscal Revenue Contracts in 2025, Signaling Economic Headwinds

The Story:
China’s fiscal revenue experienced a 1.7% contraction in 2025, marking the first decline since 2020, as reported by the Finance Ministry on January 30, 2026. This contraction is attributed to a prolonged slump in the property market and weakened domestic demand, which collectively weighed on the Chinese economy throughout the year.

Tax revenue saw a modest increase of 0.8% in 2025, but this was offset by a significant 11.3% drop in non-tax revenue. Simultaneously, fiscal expenditure rose by 1%. A notable decline was observed in land sales revenue by local governments, which plummeted by 14.7% compared to the previous year, reflecting the severity of the property downturn.

Key Points:

  • China’s fiscal revenue fell by 1.7% in 2025, the first contraction since 2020.
  • Tax revenue increased by 0.8%, but non-tax revenue slumped by 11.3%.
  • Fiscal expenditure rose by 1%.
  • Land sales revenue for local governments dropped by 14.7% in 2025.
  • The contraction is linked to a prolonged property slump and weak domestic demand.

Key Takeaways:

  • China’s economic growth is facing significant challenges, primarily stemming from the struggling property sector.
  • The decline in land sales revenue will likely put pressure on local government finances.
  • The overall contraction in fiscal revenue highlights the need for potential policy adjustments to stimulate the economy.
  • The drop in non-tax revenue suggests underlying issues within state-owned enterprises or other government revenue streams.
  • The first contraction since 2020 suggests a structural issue, rather than just a temporary setback.

    Read More

Related News: