China’s local land sales revenue tumbles 27% in Q1

THE income that local authorities in China get from land sales slid in the first quarter, a sign that a housing slump is crimping government finances.

Revenue in the first three months of 2022 from selling rights to use state-owned land fell 27.4 per cent from the same period a year ago to 1.2 trillion yuan (S$255.3 billion), according to Ministry of Finance data released Wednesday. That drop follows the biggest sales slump on record for the first two months of 2022.

The slide poses a test for cash-strapped local authorities, who rely on land as a source of income yet already face pressure to bolster economic growth by cutting taxes and spending more on infrastructure. 

China’s worst Covid-19 outbreak since Wuhan in early 2020 is prolonging its property slump, starving stressed developers of cash and weighing on growth. Official data released this week showed that the Asian nation’s real estate sector contracted for a third straight quarter. 

The ministry also said Wednesday that fiscal spending totalled 6.36 trillion yuan in the first three months of this year, up 8.3 per cent on-year. Fiscal revenue for the period rose 8.6 per cent rose to 6.2 trillion yuan. BLOOMBERG