China’s fiscal expenditure increased while fiscal revenue dropped in the first 10 months, leading to a surge in the budget gap.

Local media outlet Yicai citing Ministry of Finance data reported that China’s overall fiscal revenue was about $3.2 trillion (22.5 trillion yuan) in January-October, down 9.4% year-on-year.

Meanwhile, the country’s overall fiscal spending was about $4.1 trillion, a year-on-year increase of 7.4%.

In the first 10 months, the fiscal deficit was about $930 billion (6.66 trillion), an increase of 188% year-on-year.

China’s overall fiscal revenue is the sum of the general public budget and the  Chinese Communist Party’s (CCP” s) fund revenue.

This year, the general public budget revenue and the regime’s fund income have declined significantly due to the COVID pandemic’s impacts, tax rebates and tax reductions, and a crisis in the property market.

The regime’s funds, the second largest source of fiscal revenue after tax, refer to the monetary funds with particular purposes raised from citizens, legal persons, and other organizations. CCP authorities at all levels collect them, mainly for infrastructure and public utilities.

Data from the Ministry of Finance showed that, in the first 10 months of this year, the general public budget revenue was about $2.42 trillion, a year-on-year decline of 4.5%.

Meanwhile, revenue from the regime’s national fund was $728 billion in the first 10 months, down 22.7% from last year.

The CCP increased the issuance of local special bonds to fill the budget gap. As a result, the scale of new special bond issuance exceeded $560 billion for the first time this year.

All localities have also been stepping up their efforts to revitalize existing assets, increase funds transfer, and use carry-over surplus funds.

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