MNI BRIEF: China's Soft Land Sales Reducing Fiscal Income

MNI (BEIJING) - China’s sluggish property market continued to drag down fiscal revenue as income from land sales saw their biggest decline in over a year, according to the Ministry of Finance. 

The revenue form “transfer of state-owned land use rights,” which gauges income relative to land sales, printed at CNY1.8 trillion at the end of July this year, decreasing by 22.3% y/y, compared with a decline of 18.3% in the first half of the year. As a result, the national government fund budget revenue decreased by 18.5% y/y in the first seven months to CNY2.3 trillion, continuing to fall from a decline of 15.3% in H1. (See MNI INTERVIEW: China To Contain Property Spillover - Advisor)

Local governments with income heavily dependent on land sales have continued to suffer as their fund budget revenue decreased by 20.7% y/y from a fall of 17.4% in H1.