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Twenty-four out of the 28 Chinese provinces and regions that have publicly shared data reported an increase in their overall public budget revenue — which includes both tax and non-tax income — during the first three quarters of the year.
Only two provinces, Xizang Autonomous Region and Jilin Province, experienced double-digit growth, with increases of 14% and 11%, respectively, over the same period last year. The remaining 22 regions saw growth rates of around 2%.
The modest growth in local government revenue can be attributed to two main factors. Firstly, the steady economic performance has provided a solid foundation for consistent revenue growth. Secondly, challenges such as a sluggish real estate market, difficulties faced by businesses, a weakening producer price index, and reductions in taxes and fees have all played a role in limiting revenue expansion.
Resource-rich areas like Qinghai, Shaanxi, Shanxi, and Inner Mongolia reported declines in overall public budget revenue, falling between 1.3% and 8.9%. Analysts link these decreases directly to falling prices of major commodities like coal.
Meanwhile, Xizang experienced the highest growth in public budget expenditures during the first three quarters, increasing by 13% from the previous year. Guangxi Zhuang Autonomous Region and Shanghai also saw expenditure growth of around 8%, whereas most other regions saw increases of less than 3%.
Throughout this period, the total expenditures of these 28 regions exceeded their revenues, with Sichuan showing the largest gap—about 560 billion yuan (roughly $78.7 billion).
Data from the Finance Ministry shows that local governments’ total public budget revenues grew by 1.8%, reaching around 9.3 trillion yuan (about $1.3 trillion) in the first three quarters. However, their expenditures increased faster, surging by 2.4% to approximately 17.7 trillion yuan (around $2.5 trillion).
In an environment of limited revenue growth and rising spending, local authorities are advised to prioritize the balanced management of financial resources and budgets. It is important to allocate funds toward essential public services and support key national and regional strategic initiatives to bolster financial stability and promote sustainable economic and social development.
Additionally, tax and fee policies should be rigorously enforced to ensure legal compliance and avoid damaging market confidence, investment, and consumer activity. Greater focus should be placed on revitalizing state-owned assets and resources, experts suggest.
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