BEIJING (Reuters) – China’s fiscal revenue decline slowed in the first three months this year as Beijing works to shore up its economy while weathering the storm from mounting U.S. tariffs.
Fiscal revenue in the January-March period totalled 6.0 trillion yuan ($821.54 billion), down 1.1% year-on-year, data from the finance ministry showed on Friday, a deceleration from a 1.6% decline in the first two months of 2025.
China’s tax revenue fell 3.5% in the first quarter from the previous year, while non-tax revenue surged 8.8%, the ministry said. Fiscal expenditure rose 4.2% on year in the January to March period.
China has set a budget deficit target to around 4% of GDP this year, its highest on record, to help hit its growth target of around 5%, though analysts believe it may be increasingly difficult to achieve in the face of hefty U.S. tariffs.
Earlier this month, global ratings agency Fitch downgraded China’s sovereign credit rating, citing rapidly rising government debt and risks to public finances, suggesting a tricky balancing act for policymakers seeking to expand consumption to guard against a trade downturn.
Recent data showed an even recovery in the world’s second-largest economy, which is facing increasing headwinds from an escalating trade war with the United States.
China’s new bank lending and exports beat expectations in March but deflationary pressures persisted as consumer prices fell for the second straight month and factory-gate deflation worsened.
China’s economic recovery since the COVID-19 has been shaky despite state stimulus, as domestic demand remains sluggish due to weak confidence in the face of a years-long property market crisis and renewed deflationary pressure.
Policymakers have repeatedly said the country has ample room and tools to bolster the economy and premier Li Qiang this month pledged to roll out more proactive policy measures.
($1 = 7.3034 Chinese yuan renminbi)
(Reporting by Reporting by Shi Bu and Kevin Yao; Editing by Ros Russell)
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