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With Economy Slowdown, China’s Local Governments Cut Revenue Targets

Due to the downward pressure on China’s economy in 2019, as well as the central government’s tax cut effort, China’s provinces and cities have lowered their fiscal revenue growth targets. Many places have planned to tighten their belts.

Provinces such as Jiangsu, Beijing, Sichuan, Henan, Hebei, and Fujian have lowered their 2019 revenue growth targets, vis-a-vis the 2018 growth rate.

Sichuan’s budget report states that the economy faces a large downward pressure in 2019, and this makes fiscal revenue growth more difficult. At the same time, with the implementation of a large scale tax cut and fee reduction policy, the public budget of 898.4 billion yuan (US$132 billion) for the whole year still cannot make ends meet. The growth of Sichuan’s public budget revenue in 2018 was 9.3 percent; in 2019 it was down to 7.5 percent.

The growth of Beijing’s 2019 fiscal revenue target was also reduced to 4 percent from 6.5 percent growth last year. 2019 will see a reduction of Beijing’s fiscal income of about 30 billion yuan (US$4.4 billion). With even more aggressive tax cuts and fee reduction measures, pressures will continue on the growth of fiscal revenue.

Jiangsu lowered its revenue growth target from 5.6 percent in 2018 to 4.5 percent in 2019.

In Hubei, the level of three major types of public expenses – buying and using government cars, overseas trips, and official receptions – face a projected reduction of 5.6 percent.

Source: Central News Agency, January 24, 2019