Authorities have been strengthening the collection of taxes as they target overseas capital gains and other foreign income Read more at The Business Times.

cross-posted from: https://lemmy.sdf.org/post/55056010

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China narrowed its cumulative fiscal deficit for the first time in more than two years, pressing ahead with austerity despite muted domestic demand and slowing economic growth.

The combined shortfall under China’s two biggest government budgets shrank 4.1 per cent in the first five months from the same period a year earlier to 3.2 trillion yuan (S$611 billion), according to Bloomberg calculations based on data released by the Ministry of Finance late on Monday (Jun 22).

Last month alone, government expenditure fell 3.9 per cent on year, the third consecutive month of decline. Total spending under the two accounts fell 0.3 per cent in January to May, even as broad income climbed 0.8 per cent.

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The fiscal choices made by China come at the expense of economic growth, with consumer spending and investment dropping to levels unseen since the pandemic.

Exports are benefiting from a global artificial intelligence boom, however, reducing the urgency for stimulus to offset weak domestic demand.

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For now, infrastructure-related expenditure is in decline, decreasing 12 per cent on year in May after an 18 per cent slump in the previous month, according to Bloomberg calculations based on the official numbers.

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