China Revenue Growth Slows But Beijing May Issue More Debt

Analysts say China’s economic recovery remains on shaky ground, with official data showing that fiscal revenue growth slowed in September.

Fiscal revenue grew 8.9% in the first nine months, down from a 10% gain in January-August, finance ministry data showed on Tuesday.

Fiscal revenue hit 16.67 trillion yuan ($2.28 trillion) during January-September, while fiscal expenditure rose 3.9% to 19.8 trillion yuan.

In September alone, fiscal revenue fell 1.3% year-on-year, compared with a 4.6% fall in August, according to Reuters calculations based on the ministry’s data.

ALSO SEE: China Tensions Leave US Firms Between a Rock and a Hard Place

Beijing could issue more bonds to boost economy

Fiscal spending was up 5.2% in September, cooling from a 7.2% rise in August.

Thanks to recent policy support, China’s economy grew at a faster-than-expected pace – 4.9% – in the third quarter while September activity indicators largely surprised on the upside.

But economists say there are still some significant weak spots, particularly in the property market, which remains in a deep contraction.

According to the National Bureau of Statistics, China could achieve its full-year growth target of around 5% if fourth quarter gross domestic product (GDP) growth is above 4.4%.

Some brokerages such as JP Morgan and Nomura have lifted their forecast for China’s 2023 economic growth.

Some government advisers are recommending China lift its 2024 budget deficit target beyond the 3% of GDP set for this year, which would allow Beijing to issue more bonds to revive the economy, policy insiders and economists have said.