China's fiscal revenues jumped by a quarter in 2011 to a record 10.37 trillion yuan ($1.64 trillion), China's Ministry of Finance said on Friday, leaving Beijing with plenty of financial firepower to help manage an economic soft-landing. Although Chinese governments, including Beijing and local governments, rushed to spend almost 2 trillion yuan in December alone, China's full-year fiscal deficit of 519 billion still fell short of the 900 billion yuan that had been pencilled into the budget in March.
The figures are subject to revision, but if the numbers hold, the official fiscal deficit will fall to 1.1 percent of China's gross domestic product of $7.47 trillion, an enviable level when compared with the world's other major economies that are saddled with heavy government debt. The finance ministry said the strong 24.8 percent growth of fiscal revenues in 2011 - much higher than the budgeted 8 percent - reflected China's rapid economic growth and handsome corporate profits.
"Some local government revenues that had originally been excluded from the budget were included in 2011, which amounted to an increase of about 250 billion yuan...and pushed up nation-wide fiscal revenue growth by three percentage points," the ministry said in a statement on its website (www.mof.gov.cn).
For many years, China's fiscal revenues have been rising faster than the overall economic growth, which was 9.2 percent last year, and the growth rate of household income, offering the government a growing share of the national wealth. Corporate income taxes rose 30.5 percent in 2011, while value-added taxes and import duties also rose quickly. Personal income tax revenues jumped 25 percent for the full year of 2011, but the ministry noted that personal income tax revenues in the last quarter fell 5.5 percent as China lifted the personal income tax threshold starting from September 1.