[New Tang Dynasty News, Beijing Time, February 10, 2023]The CCP government’s finances continue to deteriorate. According to reports, the contradiction between fiscal revenue and expenditure in the mainland has been increasing, and the increase in local government debt far exceeds revenue last year. Therefore, local governments have vigorously reduced expenditures, and the budget reports of 31 provinces across the country all stated that they must “persist in a tight life.”
According to China Business News, according to the 2022 budget implementation and 2023 budget reports recently released by 31 provinces (autonomous regions and municipalities directly under the central government), all provinces have emphasized the need to “live a tight life” this year and “reduce non-urgent and non-rigid expenditures.” expenditure”.
For example, Chongqing’s budget report stated that last year, the city’s expenditure cuts were around 12 billion yuan (RMB, the same below), saying “to alleviate the contradiction between fiscal revenue and expenditure, and to ensure a stable and sustainable fiscal operation.”
According to the Beijing budget report, last year the local government reduced non-rigid, non-key projects and general expenditures by 4.06 billion yuan. According to the Guizhou budget report, general expenditures were reduced by 252 million yuan last year.
According to the Tianjin budget report, last year public and administrative operating expenses were reduced by 160 million yuan and 300 million yuan respectively; last year, expenditures at the provincial level in Guangdong province decreased by 6.5%; general expenditures of provincial units in Jiangsu decreased by 10%.
According to the fiscal revenue and expenditure data released by the Ministry of Finance of the Communist Party of China for the whole year of 2022, the contradiction between fiscal revenue and expenditure is very prominent. Generalized fiscal expenditure exceeds revenue by 8.96 trillion yuan, surpassing 2020 and setting a record high. According to Lu media, the main reason is that fiscal revenue has fallen sharply due to the impact of the epidemic.
In January of this year, the Institute of Finance and Taxation of Renmin University of China released the “Fiscal Development Index Report 2022 of China’s Regions”. The report stated that the fiscal revenue structure has deteriorated in the past two years, financial resources are uneven among regions, and the contradiction between fiscal revenue and expenditure has become increasingly prominent; In order to balance the contradiction between revenue and expenditure, local government debts increased rapidly. As a result, the growth rate of debt in the provinces far exceeded that of income last year.
Ma Guangrong, deputy director of the Finance and Taxation Research Institute of Renmin University of China, told Lu media that the main reason is that the economy has been hit by the epidemic, which has led to the expansion of local fiscal revenue and expenditure contradictions. Last year, the growth rate of the debt scale of various provinces significantly exceeded the growth rate of GDP and fiscal revenue, and the debt repayment burden increased.
According to public data, the scale of local government bond issuance has continued to expand in recent years, especially after the epidemic, the scale of new special bond issuance reached 3 trillion yuan, surpassing 4 trillion yuan for the first time last year. This has also led to a rapid increase in the balance of local government debt.
According to data from the Ministry of Finance, as of the end of November 2022, the balance of local government debt across the country is 35,036.4 billion yuan.
Starting from the end of 2021, many local governments in China have encountered financial difficulties one after another. In 2022, the closure of Shanghai and other places will lead to various secondary disasters, loan cuts, the white paper revolution, and the outbreak of the epidemic at the end of the year, which will undoubtedly hit the economy hard and local financial problems will intensify.
Minxin Pei, a well-known Chinese political and economic expert and a professor at Claremont McKenna College (CMC), wrote an article on the website of the Australian Strategic Policy Institute, a think tank headquartered in Canberra, on January 30 this year, pointing out that , Clearing left deep scars on the Chinese economy.
Pei Minxin said that while China has been talking about economic growth, the government has not announced any related plans, and there is no sign in official rhetoric that it is considering a fundamental change in the direction of the economy. He warned people not to believe the CCP’s hype, and China’s economy may remain stagnant for a while.
(Editor in charge: Tang Zheng)