China quickens spending on public housing, transport to fight slowdown

BEIJING: China's fiscal spending jumped in July to 37.1 per cent from a year earlier, quickening from 17.7 per cent in June, official data showed on Friday, the latest evidence that the government is stepping up efforts to combat an economic slowdown.

The world's second-largest economy expanded at the slowest pace in more than three years in the second quarter and the latest data pointed to weaker factory output and retail sales, fanning market expectations of fresh policy easing from Beijing.

Fiscal expenditure of 952.8 billion yuan ($149.83 billion) in July consisted of 167 billion yuan by central government and 785.8 billion yuan by local governments, the Ministry of Finance said in a statement.

The government has been fast-tracking some infrastructure projects and doling out subsidies for energy-efficient home appliances in hopes of giving a lift to its economy.

Government spending was focused on key programmes to improve people's livelihood, the ministry said. Spending on affordable housing soared 39.2 per cent during the January-July period from a year earlier while that on transportation rose 34.9 per cent.

The government has also increased expenses on healthcare and education, with spending on the two areas rising 25 per cent and 32 per cent in the first seven months year-on-year, respectively.

China's fiscal revenues rose 8.2 per cent in July from a year earlier to 1.07 trillion yuan, the ministry's data showed. The growth rate slowed from a rise of 9.8 per cent in June and 13.1 per cent in May.

The ministry attributed a slowing fiscal revenue growth to falling corporate earnings and tax cuts in some sectors.

Revenues from value-added tax in July edged up 0.7 per cent from a year earlier, while consumption tax receipts rose 11.5 per cent.

Receipts from cooperate income tax in July inched up 2.8 per cent from a year earlier, after a rise of 10.1 per cent in June, in line with the slowing economy and falling factory-gate prices, which eat into corporate earnings.

Fiscal incomes from business tax rose 13.3 per cent from a year earlier, with tax receipts from the property sector rising 7.6 per cent.