China Sept Fiscal Spending Growth at 2017 Low on Quota Limits

     BEIJING (MNI) - China's fiscal spending growth softened in September as

both local and central governments approached quota limits on total spending for

the year, the Ministry of Finance said Monday.

     The MOF said fiscal spending grew 1.7% year-on-year to CNY2.025 trillion in

September, compared with an increase of 11.3% in September last year and a gain

of 2.9% last month. It was the lowest growth so far this year. 

     Spending growth by both central and local governments slowed on an annual

basis. Central government spending increased 6.4% year-on-year in September,

compared with a 12.4% jump in the same period last year, while local government

spending rose 1.1%, compared with an increase of 11.1% last September.

     "It is normal to see a slowdown of fiscal spending as the government

accelerated expenditures in previous months and the relevant funds have been

spent," said Lou Hong, the head of the ministry's Treasury Department.

     In the January-September period, total fiscal spending increased 11.4% to

CNY15.189 trillion, compared with a gain of 12.5% in the same period last year.

Spending on environmental protection and energy conservation surged 51.7%

year-on-year and 44.2% respectively, the MOF said.

     Fiscal revenues, meanwhile, increased 9.2% year-on-year to CNY1.27 trillion

in September, compared with an increase of 4.9% in September last year and a

gain of 7.2% last month.

     Central government revenues rose 10.6% year-on-year in September, the MOF

said, while local government revenues increased 8.1%. Tax revenues rose 17.6%,

while non-tax revenues dropped 11%, the MOF noted.

     For the first nine months of this year, total fiscal revenues rose 9.7% to

CNY13.41 trillion, compared with 5.9% growth in the same period last year,

according to the MOF. 

     The MOF attributed the growth to rising prices.

     From January to September, value-added tax revenues in the industrial and

commercial sectors jumped 20.5% and 27.5%, respectively, from a year ago due to

rising product prices and increasing sales income, the MOF said

     Industrial corporate income tax revenue also surged 21.3%.

     Value-added tax and consumption tax revenues from imported goods increased

29.9%, compared with 19.1% growth last month, because of high commodity prices,

the MOF noted.

     Revenue from the resources tax surged 54% year-on-year to CNY103.1 billion

in September because of the rising prices of some minerals, the MOF said.

     "Fiscal revenues growth is expected to edge down in the fourth quarter, but

the whole-year target will be realized," Lou said. 

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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