China implements first fiscal deficit cut in 2023

China has reduced its fiscal deficit for the first time in over two years, with the cumulative deficit decreasing by 4.1% over the first five months of the year to reach 3.16 trillion yuan (466 billion dollars), despite slowing domestic demand and a drop in economic growth. Government spending has also declined for the third consecutive month, while public revenues increased by 0.8%. The Chinese economy is heading towards adopting austerity measures at the expense of growth, with expectations of decreased consumer and investment expenditures, even though exports are benefiting from the global boom in artificial intelligence.

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