China Jan-Feb Tax spending accelerates in fight against slowdown

China’s household spending rose 7.0% year-on-year in January-February, the Finance Ministry said on Friday, accelerating from a 0.3% rise in 2021 as policymakers ramp up support for the slowing economy.

Household spending totaled 3.8 trillion yuan ($597 billion) in the first two months of 2022, including 180 billion yuan for transportation and 79 billion yuan for energy conservation and environmental protection, the ministry said.

Chinese politicians have pledged to increase fiscal spending this year to cushion a slowdown in the world’s second largest economy, despite a lower budget deficit ratio.

China’s tax revenue grew 10.5% year on year to 4.6 trillion yuan in the first two months of 2022, the ministry said in a statement on its website, cooling from a 10.7% increase for the year 2021 slightly.

Value-added tax revenue rose 6.1% to 1.48 trillion yuan from January to February, while corporate income tax revenue rose 5.4% to 912.7 billion yuan, the ministry said.

China has increased infrastructure investment spending, mainly funded by local government special bonds, at an annual rate of 3.65 trillion yuan.

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