China logs first fiscal revenue drop since 2020 on property slump, weak consumption

[BEIJING] China’s fiscal revenue fell 1.7 per cent in 2025 from a year earlier, the finance ministry said on Friday (Jan 30), the first contraction since 2020 as a protracted property slump and weak domestic demand saddled the economy.

Fiscal revenues in 2025 totalled 21.6 trillion yuan (S$3.9 trillion), a ministry official said at a press briefing. Expenditures grew 1 per cent to 28.7 trillion yuan, slowing from 3.6 per cent growth in 2024.

Growth in China’s fiscal revenue slowed to 1.3 per cent in 2024. Revenue dropped 3.9 per cent in 2020 when the initial outbreak of the Covid-19 pandemic disrupted economic activities.

Tax revenue rose 0.8 per cent in 2025, while income from non-tax sources slumped 11.3 per cent. Revenue from stamp taxes on securities transactions surged 57.8 per cent, buoyed by a stock market rally.

Revenue from land sales by China’s local governments declined for a fourth straight year as the property downturn rolled on, although the 14.7 per cent drop in 2025 narrowed from a 16 per cent fall a year earlier. These revenues have in the past been a key driver for local economic growth measures and the sharp drop has strained local authorities’ coffers and weighed on overall business activity.

China’s economy grew 5.0 per cent in 2025, meeting the government’s target, as strong global demand for goods helped offset weak domestic consumption – a phenomenon that economists warn will be difficult to sustain.

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Chinese leaders have pledged to continue to implement a more proactive fiscal policy this year and maintain the necessary fiscal deficit, overall debt levels and expenditure scale to support broader economic growth. REUTERS