According to 2024 fiscal revenue data recently released by the Chinese Ministry of Finance, total fiscal revenue of local Chinese governments amounted to 21.97 trillion yuan (US$ 3.03 trillion) in 2024, representing a year-on-year growth of only 1.3 percent, significantly lower than the 6.4 percent increase in 2023. Revenue from taxation accounted for 17.497 trillion yuan, marking a 3.4 percent decline compared to the previous year. Revenue from local government land sales dropped by 16 percent year-on-year, with the decline attributed to weakness in the Chinese real estate sector. Non-tax revenue saw a sharp increase, totaling 4.473 trillion yuan, a 25.4 percent year-over-year growth.
Many local governments have faced severe funding shortages in the past year. Chinese media have been flooded with reports of local governments resorting to various means to generate revenue so as to sustain their operations. Some have retrospectively audited up to 30 years of private enterprises’ financial data, forcing them to “repay taxes” based on old records. Some local governments have dispatched police to other regions to arrest entrepreneurs, coercing them into paying money. Some have even resorted to “criminalizing debt,” where debtors use police intervention to detain creditors, forcing them to settle debts in exchange for their freedom. A more widespread approach among local governments has been to leverage their administrative powers to impose arbitrary fees, directly levying charges to fill their coffers.
According to Voice of America (VOA), “These measures may have temporarily increased local governments’ revenues, but they have severely damaged business confidence and will lead to further economic weakening.”
Source: VOA, January 25, 2025
https://www.voachinese.com/a/china-2024-fiscal-revenue-growth-shrinks-non-tax-income-jumps-20250124/7948819.html