Local governments across China released their fiscal reports for the first half of 2024, revealing a 2.7% year-on-year increase in general public budget revenue, reaching 6.88 trillion yuan. This growth rate improved by 0.6 percentage points compared to the first quarter. Revenue growth was observed in all four major regions—eastern, central, western, and northeastern China—with 28 out of 31 provinces reporting positive gains.

28 provinces see revenue growth

Overall, local fiscal operations remained stable in the first half of the year. Among the 31 provinces, 28 recorded revenue increases, three more than in the first quarter. In terms of total revenue, the economic powerhouses of Guangdong, Jiangsu, and Zhejiang maintained their top-three positions nationally. Guangdong's local general public budget revenue reached 742.1 billion yuan, up 2.8% year-on-year, while Jiangsu and Zhejiang each exceeded 500 billion yuan. For instance, Jiangsu's general public budget revenue stood at 594.1 billion yuan, with tax revenue accounting for 76.5% of the total, an increase of 3.4% to 454.5 billion yuan. Among major tax categories, value-added tax grew by 5.8%, corporate income tax by 2.5%, and personal income tax surged by 17.4%, indicating strengthening business activity and stable employment conditions.

In terms of growth rates, Tibet, Xinjiang, and Gansu led the nation with increases of 36.9%, 10%, and 8.2%, respectively. Many provinces prioritized strict budget enforcement and safeguarding basic needs at the grassroots level. For example, Anhui's finance department audited the "three guarantees" (basic salary, operations, and livelihood) budget plans for all 120 regions, ensuring adequate funding for county-level and city-level operations. Meanwhile, Liaoning's provincial legislature recommended optimizing fiscal spending structures to support major projects, key sectors, and basic welfare, promoting high-quality economic development.

Local fiscal balance is assured

Various fiscal policies implemented this year have supported the execution of national strategic tasks, improved welfare, and stabilized local finances. On the expenditure side, local general public budget spending totaled 12.21 trillion yuan in the first half of 2024, a 0.6% increase year-on-year. Guangdong, Sichuan, and Jiangsu reported the highest spending volumes, with provinces maintaining robust expenditure on livelihood-related areas. For instance, Guangdong allocated about 75% of its local general public budget to welfare, while Jiangsu and Zhejiang saw social security and employment spending grow by over 7%. Shandong's health spending increased by 14.6%.

Local financial resources were strengthened by central government transfer payments, which totaled 10.42 trillion yuan for 2024, maintaining a level above 10 trillion yuan for four consecutive years. Equalization transfer payments rose by 3.7% to 2.83 trillion yuan. The Ministry of Finance also reduced certain special transfer payments to boost general-purpose funding, and selected provinces to pilot integrated management of transfer funds. Additionally, the central government temporarily increased its share of costs for child-rearing subsidies and preschool education fee exemptions, alleviating local fiscal pressures.

Addressing concerns about fiscal self-sufficiency rates dropping below 100% in all provinces during the first quarter, Tang Zaifu, Deputy Director of the Ministry of Finance's Budget Department, explained that this rate measures the ratio of local general public budget revenue to spending. However, local spending also relies on central transfers, fund transfers from other budgets, and prior-year surpluses. "A self-sufficiency rate below 100% is normal. With increased central transfers, local governments can achieve fiscal balance," Tang noted.

Accelerated issuance and use of local special bonds

Utilizing local special bonds is a key component of implementing a more proactive fiscal policy. This year, China approved a total of 5.2 trillion yuan in new local government debt limits, including 4.4 trillion yuan in special bonds, to support major projects, replace hidden debt, and clear overdue government payments. In the first half of 2024, special bond issuance reached 47% of the annual quota, with funds directed toward municipal and industrial park infrastructure, transportation, urban renewal, and social services. Over 170 billion yuan was allocated for project capital, leveraging government investment to stimulate private sector participation.

The Ministry of Finance strengthened oversight of special bond funds through "penetrating" supervision and "scanning" reviews of fund usage. It also established asset registries for bond-financed projects, creating a closed-loop management system from funding to asset management. Hebei, Jiangxi, Hubei, and Chongqing were selected as pilots for a new "self-review and self-issuance" mechanism for special bonds. These regions have developed work plans defining responsibilities for project selection, fund management, and debt repayment, resulting in faster issuance and spending. Zhao Zeyong, Deputy Director of the Ministry of Finance's Debt Management Department, stated that the ministry will guide provinces to strengthen the "borrowing, using, managing, and repaying" cycle, ensuring efficient fund utilization and timely project completion.