China Posts First Fiscal Revenue Decline Since Pandemic
By Cheng Siwei
China recorded its first annual decline in fiscal revenue since the Covid-19 pandemic, as a sharp fall in nontax takings outweighed a modest recovery in tax revenue.
Data released by the Ministry of Finance showed general public budget (GPB) revenue fell 1.7% in 2025 from the previous year, marking the first contraction since 2020, when revenue slid during the initial pandemic shock. GPB is the largest of the four budgets in China’s fiscal system.
The decline came despite a gradual improvement in economic activity over the year.
The setback was driven mainly by a sharp drop in nontax revenue, which fell at a double-digit pace. The finance ministry attributed the fall to a high comparison base in 2024, when one-off transfers from central government–affiliated entities boosted fiscal coffers.
Tax revenue rose slightly, supported by steady monthly collections through much of the year. Individual income tax grew notably faster than headline tax revenue, partly reflecting tighter enforcement, including stricter scrutiny of residents’ overseas income and more standardized tax reporting by online platforms.
A rally in domestic equities lifted securities stamp duty, while import taxes declined.
On the spending side, revenue weakness kept budget outlays subdued. GPB expenditure rose only marginally.
Land sale revenue — booked under the government-managed fund budget and a key source of local government funding — continued to fall sharply, extending a multi-year slide.
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