China Maintains Austerity Amid Economic Slowdown
Public spending in China declined by 11.9% year-on-year in June, marking the largest decrease since October, amid escalating government efforts to tighten fiscal policies to counteract economic growth slowdown. Despite the decrease in spending, fiscal revenue increased by 1.8%, leading to a reduction in the budget deficit to 4.57 trillion yuan (around $675 billion) in the first half of the year. Estimates suggest that this decline in spending has significantly contributed to the slowdown in economic growth. The government continues to shift toward a more active policy stance to support the economy by increasing spending on infrastructure, education, and healthcare, as well as expanding financing tools, with the goal of achieving the targeted growth rate of between 4.5% and 5%. As the government moves toward improving spending and stimulating investment, it is expected that economic policy support will persist despite pressures from declining land sale revenues and a weak real estate market.
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