Local governments' general public budget revenue for the first half of the year totaled 6.88 trillion yuan, a 2.7% year-on-year increase, accelerating by 0.6 percentage points from the first quarter. Revenue growth was observed across the eastern, central, western, and northeastern regions. Among the 31 provinces, 28 reported revenue gains. How should the fiscal performance of local governments in the first half of the year be assessed? Recently, all 31 provinces, autonomous regions, and municipalities have disclosed their half-year financial reports.

Overall, local fiscal operations remained stable in the first half of the year, with general public budget revenue at 6.88 trillion yuan, up 2.7% year-on-year. Among the 31 provinces, 28 recorded revenue growth, an increase of three provinces compared to the first quarter. By region, revenue growth was positive across the eastern, central, western, and northeastern areas. In terms of total revenue, major economic provinces like Guangdong, Jiangsu, and Zhejiang maintained their positions as the top three in general public budget revenue. Guangdong recorded local general public budget revenue of 742.1 billion yuan, a 2.8% increase. Jiangsu and Zhejiang each reported general public budget revenue exceeding 500 billion yuan in the first half of the year. Taking Jiangsu as an example — its fiscal revenue side showed steady growth with a high share of tax revenue. The province's general public budget revenue was 594.1 billion yuan, of which tax revenue reached 454.5 billion yuan, up 3.4%, with a tax share of 76.5%, indicating a continuously improving revenue structure. Looking at major tax types, value-added tax revenue grew by 5.8%, and corporate income tax revenue rose by 2.5%, reflecting a sustained increase in business activity. Personal income tax revenue increased by 17.4%, signaling a solid trend in resident income and employment. In terms of growth rates, the three provinces and regions of Tibet, Xinjiang, and Gansu led the nation with general public budget revenue growth of 36.9%, 10%, and 8.2%, respectively.

Among the half-year budget execution reports released by multiple provinces, strict budget enforcement and strengthening basic "three guarantees" (guaranteeing basic wages, operations, and public services) at the grassroots level were key priorities for many local fiscal operations. In the first half of the year, the fiscal department of Anhui province conducted a comprehensive review of the "three guarantees" budget preparations across all 120 regions, ensuring that cities and counties adequately budgeted for these needs. Strengthened monitoring of "three guarantees" operations saw that expenditures for these items in the province's cities and counties reached 52.5% of the budget, with overall stable grassroots operations. In Liaoning, the provincial people's congress standing committee, while reviewing the province's half-year budget execution report, recommended vigorously optimizing the fiscal expenditure structure, strengthening financial support for key areas such as major projects, key programs, and basic livelihoods, to promote high-quality economic development and enhance public welfare.

Local fiscal balance has been secured. This year, various fiscal policies have progressed smoothly, playing a positive role in ensuring the implementation of major national strategies, safeguarding and improving people's livelihoods, and promoting stable local fiscal operations. On the expenditure side, local general public budget spending in the first half of the year reached 12.2111 trillion yuan, a 0.6% year-on-year increase. Guangdong, Sichuan, and Jiangsu were among the top provinces in general public budget expenditure, with spending on key areas like people's livelihoods maintaining resilience. In the first half of the year, livelihood-related expenditures in Guangdong accounted for approximately three-quarters of its local general public budget spending. In Jiangsu and Zhejiang, spending on social security and employment grew by over 7%. Shandong saw a 14.6% increase in healthcare expenditure. Livelihood spending remains a centerpiece of local fiscal operations. Local financial resources have been strengthened. This year, the central government has allocated 10.42 trillion yuan in transfer payments to local governments, a scale that has remained above 10 trillion yuan for four consecutive years. It also disbursed 2.83 trillion yuan in equalization transfer payments, a 3.7% increase from the previous year. Additionally, the Ministry of Finance has reduced some special transfer payments to increase fiscal transfer payments, selected certain provinces to pilot the integration and coordinated use of transfer payment funds, and enhanced local financial autonomy and coordination capabilities. In areas such as child-rearing subsidies and one year of free pre-primary education, the central government has temporarily increased its share of costs, alleviating pressure on local fiscal expenditures and supporting stable local fiscal operations. Addressing the claim that "in the first quarter of this year, all provinces had a fiscal self-sufficiency rate below 100%, with none achieving fiscal self-balance," Tang Zaifu, Deputy Director of the Budget Department of the Ministry of Finance, explained that the fiscal self-sufficiency rate refers to the ratio of a region's general public budget revenue to its general public budget expenditure. Under China's budget system, the sources of local general public budget expenditure include, in addition to their own general public budget revenue, central transfer payments, funds transferred from government-managed funds and state capital operation budgets, and the use of carryover and surplus from previous years. "Since local general public budget revenue is only one source of expenditure, a fiscal self-sufficiency rate below 100% is normal. Although the local fiscal self-sufficiency rate is below 100%, the central government has increased transfer payments to local governments, enabling them to achieve fiscal balance," Tang said.

The issuance and use of local special bonds have accelerated. Effectively utilizing local special bond funds is a key part of implementing a more proactive fiscal policy in various regions. This year, the national new local government debt limit is 5.2 trillion yuan, including 4.4 trillion yuan for new local government special bonds, which support the construction of major projects, replacement of implicit debt, and clearing of government arrears. Overall, in the first half of the year, local governments focused on implementing the new mechanism for managing special bonds and strengthening their issuance and use management. The policy effects of special bonds continued to be released, with a batch of major projects starting construction, orderly replacement of existing implicit debt, and an issuance progress of 47%. In terms of investment direction, funds were mainly allocated to key areas such as municipal and industrial park infrastructure, transportation infrastructure, urban renewal, and social undertakings. Over 170 billion yuan was used for project capital, better leveraging the guiding role of government investment. In terms of management, fiscal authorities strengthened through-the-line supervision of special bond funds, conducting "scanning" reviews of their usage. They also enhanced the management of assets from special bond projects, establishing asset ledgers to form a closed management loop from fund management to asset management and from the debt side to the asset side. This year, Hebei, Jiangxi, Hubei, and Chongqing were included in the pilot scope for "self-review and self-issuance" of new local special bonds. It is understood that these provinces and municipalities have formulated their own pilot work plans, clarifying responsibilities and tasks at each stage—project selection, fund use, fund supervision, and debt repayment—focusing on strengthening departmental coordination, improving project reserve quality and efficiency, and significantly accelerating the pace of issuance and use. Zhao Zeyong, Deputy Director of the Debt Management Department of the Ministry of Finance, stated that the Ministry will guide and urge all regions to further strengthen the closed-loop management of special bonds: enhancing departmental coordination and review at the project planning stage; better coordinating fund use and project construction to accelerate fund disbursement and progress, forming physical workloads as soon as possible; strictly implementing "negative list" management, standardizing project asset management, and improving the scientific and standardized nature of post-investment management; and accelerating the establishment of debt service reserve fund systems, preparing repayment plans, and ensuring the collection of project operating income to effectively improve debt repayment capacity.