On March 13, 2023, at the annual convening of the government’s “two sessions,” China finalized a new government budget that will play a major role in shaping the trajectory of the world’s second-largest economy. Beijing also released new data on spending in 2022, which provides valuable insights into the country’s evolving spending priorities and its overall fiscal situation. Yet these budgets can be difficult to parse, and the topline figures only tell part of the story. This ChinaPower feature untangles the details behind China’s government budget.
Key Takeaways
- China’s 2023 general public budget projects revenue of RMB 23.6 trillion ($3.4 trillion) and sets spending at RMB 27.5 trillion ($4 trillion), resulting in an official deficit of nearly RMB 3.9 trillion ($564.1 billion).
- China’s official 2023 deficit is pegged at about 3 percent of Chinese GDP, but the full deficit—which accounts for other spending areas—is much larger, at around 7.4 percent of GDP.
- New data on China’s 2022 general public budget shows the government brought in less revenue than previously projected, largely due to declining land sales, which are a critical source of income for local governments.
- China’s zero-Covid policies weighed on Chinese coffers. Spending on health and sanitation rose 17.8 percent in 2022—more than twice the growth rate of any other category.
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Our thanks to The China Power Project for sharing these insights.
