The Ministry of Finance recently held a press conference on fiscal revenue and expenditure for the first half of 2026, detailing the situation and answering questions from reporters. In the first half of this year, China's general public budget revenue reached 12.1047 trillion yuan, a year-on-year increase of 4.7%. General public budget expenditure was 14.3329 trillion yuan, up 1.5% year-on-year.

Regarding the self-balancing capacity of local finances, Tang Zaifu, Deputy Director of the Budget Department of the Ministry of Finance, addressed media reports stating that in the first quarter of 2026, no province achieved a fiscal self-sufficiency rate of 100%. Tang emphasized that since local general public budget revenue is only one source of expenditure, a self-sufficiency rate below 100% is normal. Despite this, the central government has increased transfer payments to local governments, enabling them to achieve a fiscal balance.

Supporting Stable Local Fiscal Operations

Tang explained that since the start of the year, the Ministry of Finance has firmly implemented a more proactive fiscal policy and increased its implementation intensity. To ensure the smooth execution of the policy, a regular tracking mechanism was established, along with a proactive fiscal policy list and work ledger, to accelerate the effectiveness of various measures. First, the budget disbursement schedule was accelerated. At the central level, budget approvals for all central departments were completed by the end of March. For central-to-local transfer payments, 9.4 trillion yuan had been disbursed by the end of June, reaching 90.3% of the initial budget, 0.5 percentage points faster than the same period last year.

Second, multiple measures were taken to expand domestic demand. The scope and standards of subsidies for replacing old consumer goods with new ones were adjusted and optimized, with 125 billion yuan in subsidy funds disbursed, driving sales of automobiles, home appliances, and digital products to approximately 1.1 trillion yuan. Third, efforts were intensified to ensure and improve people's livelihoods. In the first half of the year, 1.2 trillion yuan in basic pension insurance subsidies were disbursed to support the timely and full payment of pensions. Additionally, 386.4 billion yuan in subsidies for basic medical insurance for urban and rural residents were disbursed to consolidate insurance coverage and protection levels.

Childcare subsidies of approximately 100 billion yuan and 24.1 billion yuan in subsidies for exempting one year of preschool education fees were disbursed to reduce family childbearing and rearing costs. A total of 156.7 billion yuan in assistance subsidies for people in need were provided to support local governments in ensuring their basic living standards. Fourth, local fiscal capacity was strengthened. Central-to-local transfer payments were arranged at 10.42 trillion yuan, maintaining a scale above 10 trillion yuan for four consecutive years. Balanced transfer payments reached 2.83 trillion yuan, a 3.7% increase year-on-year. Some special transfer payments were reduced to increase fiscal capacity transfer payments, and pilot projects for integrating and coordinating the use of transfer payments were explored in selected provinces to enhance local autonomous fiscal capacity.

In areas such as childcare subsidies and exempting one year of preschool education fees, the central government's burden-sharing ratio was temporarily increased to alleviate local fiscal pressure and support stable fiscal operations.

Fiscal Expenditure Front-Loaded Overall

When introducing the characteristics of fiscal revenue and expenditure in the first half of the year, Ma Hongbing, Deputy Director of the Treasury Department of the Ministry of Finance, noted that fiscal operations were generally stable, exhibiting five key features. First, fiscal revenue grew steadily. In the first half of the year, national general public budget revenue reached 12.1 trillion yuan, a 4.7% year-on-year increase, with the cumulative growth rate rising month by month. This was mainly attributed to the resilience and vitality of China's economy, which maintained a stable and improvement-oriented development trend in the first half, along with factors such as rising prices, a buoyant stock market, and strong foreign trade growth.

Second, the growth rate of tax revenue continued to increase. In the first half, national tax revenue reached 9.79 trillion yuan, a 5.3% year-on-year increase, 3.1 percentage points higher than in the first quarter. By tax category, domestic value-added tax grew by 6%, driven by sustained growth in industry and services and rising producer prices; import VAT and consumption tax grew by 11.8% due to rapid growth in imports; corporate income tax grew by 3.9% due to increased corporate profits; and securities transaction stamp tax surged by 97.3% due to rising stock market turnover. Export tax rebates for VAT and consumption tax totaled 1.34 trillion yuan, an increase of 68.5 billion yuan or 5.4%, supporting export growth.

Third, non-tax revenue increased slightly. In the first half, national non-tax revenue reached 2.32 trillion yuan, a 2.3% year-on-year increase. Among this, income from the compensated use of state-owned resources (assets) grew by 3.5%, mainly due to higher revenue from mining rights transfer fees. Meanwhile, income from administrative and institutional fees fell by 4.4%, mainly because from the autumn semester of last year, preschool education fees were exempted for children in their final year of public kindergartens.

Fourth, revenue grew broadly across regions. In the first half, local general public budget revenue reached 6.88 trillion yuan, a 2.7% year-on-year increase, 0.6 percentage points higher than in the first quarter. By region, revenue in the eastern, central, western, and northeastern areas all maintained growth. Among the 31 provinces, 28 reported revenue growth, three more than in the first quarter. Fifth, fiscal expenditure was generally front-loaded. Fiscal departments at all levels earnestly implemented a more proactive fiscal policy, maintaining necessary expenditure intensity and ensuring spending in key areas. In the first half, national general public budget expenditure reached 14.33 trillion yuan, a 1.5% year-on-year increase. Among the major expenditure areas, health spending grew by 10.8%, mainly due to increased childcare subsidies; social security and employment spending grew by 7.6%; housing security spending grew by 6.1%; science and technology spending grew by 1.3%; and education spending grew by 0.6%.