MNI: China Oct Fiscal Spending Drops; Revenue Growth Softens

     BEIJING (MNI) - China's fiscal spending decreased for the first time this

year while fiscal revenue growth slowed in October, the Ministry of Finance said

Friday.

     The MOF said fiscal spending decreased 8% year-on-year to CNY1.112 trillion

in October, compared with an increase of 1.7% last month and a decrease of 12.5%

in October last year. 

     Spending by both central and local governments decreased on an annual

basis. Central government spending declined 6% year-on-year in October to

CNY208.4 billion, compared with a gain of 6.4% in September, while local

government spending dropped 8.5% to CNY903.8 billion, compared with an increase

of 1.1% last month.

     "Fiscal spending had been accelerating in the previous months this year, so

spending will be reduced in the remaining months of the year as spending quotas

are reached," the ministry explained in a statement. 

     In the January-October period, total fiscal spending increased 9.8% y/y to

CNY16.30 trillion, compared with growth of 11.4% in the first nine months. 

     Spending by the central government grew 6.9%, and has so far accounted for

78.3% of the total fiscal budget quota set at the start of the year, while

spending by local governments increased 10.3%, accounting for 84.9% of the

budget.

     Fiscal revenues, meanwhile, increased 5.4% year-on-year to CNY1.62 trillion

in October, compared with an increase of 9.2% in September and a gain of 5.9% in

the same month last year.

     Central government revenues rose 3.7% to CNY826.9 billion, compared with a

10.6% gain in September, the MOF said, while local government revenues increased

7.3% to CNY796.5 billion, compared with a gain of 8.1% last month. 

     Tax revenues rose 10.1% to CNY1.42 trillion, from a jump of 17.6% in

September, while non-tax revenues dropped 18.5% to CNY204.2 billion, the MOF

noted.

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

18.7% to CNY123.3 billion, compared with 4.6% growth last October, because of a

larger volume of imports, the MOF noted.

     Revenue from the resources tax rose 34.8% year-on-year to CNY11.2 billion

in October, from 21.9% growth in the same period last year, because of the

rising prices of some minerals, the MOF said.

     Consumption tax revenues declined 8.7% to CNY83.5 billion, led lower by

decreases in refined oil and tobacco tax revenues. 

     For the first 10 months of this year, total fiscal revenues rose 8.7% to

CNY15.04 trillion, compared with 9.7% growth in the first nine months, according

to the MOF. 

     Revenues of the central governments grew 8.7% y/y, taking 91.1% of the

total fiscal budget set in the early party of this year, while those of local

governments increased 9.7%, accounting for 87.5% of the budget.

--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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