China’s H1

China’s first-half fiscal revenue edged up 3.4 percent to 10.78 trillion yuan from a year earlier, according to data released by the Ministry of Finance on July 16.

“Due to the impact of policy on tax and fee cuts, fiscal revenue growth has been slowing since the start of this year and pressures on revenue and spending have increased,” Hao Lei, an official of the ministry said at a briefing in Beijing.

Fiscal spending in the first six months increased by 10.7 percent year-on-year, settling at 12.35 trillion yuan and faster than the growth of fiscal revenue.

“In the first half, the nationwide fiscal spending growth was significantly faster than revenue growth, providing a strong support for investment in key areas,” said Liu Jinyun, another official from the ministry.

The country is set to maintain a proactive fiscal policy stance in 2019, with a higher deficit-to-GDP ratio to leave policy space to address potential risks.

China’s tax revenues rose only 0.9 percent in the first half from a year earlier, compared with a 5.4 percent rise in the first quarter, according to the ministry.

Taxes and fees levied on enterprises and individuals were reduced by approximately 1.3 trillion yuan in 2018 as a result of multiple tax reduction policies.

The ministry vowed to continuously lower burdens on the manufacturing sector as well as small and micro firms, moderately expand fiscal expenditure and increase financial input in targeted areas.