China’s Fiscal Revenue Grows 3.5% in First Four Months

China’s national fiscal revenue continued to consolidate its positive momentum in the first four months of 2026, with the general public budget reaching approximately 8.34 trillion yuan ($1.15 trillion), up 3.5% year-on-year — an acceleration from the 2.4% growth recorded in the first quarter, according to data released by the Ministry of Finance on May 20 and reported by Xinhua News Agency.

Revenue Growth Driven by Tax Performance

Tax revenue, the core component of fiscal income, reached approximately 6.81 trillion yuan in the January-April period, rising 3.9% year-on-year — 1.7 percentage points higher than the first-quarter figure. Non-tax revenue totaled 1.53 trillion yuan, up a more modest 1.6%.

Professor Yao Dongmin, Director of the China Fiscal Development Collaborative Innovation Center at Central University of Finance and Economics, told Xinhua that “the scale and year-on-year growth rate of national general public budget revenue have both hit three-year highs, reflecting the current trend of stable and progressive economic development.”

Yao further noted that tax revenue growth outpaced non-tax revenue, indicating the improvement is driven by genuine economic activity. “Fiscal revenue, especially tax revenue, is closely related to economic performance,” he said. “Taxes closely related to real economic activity showed significant improvement, foreign trade-related taxes showed strong growth, and the active capital market provided a clear boost.”

Key Tax Categories Show Broad-Based Improvement

Domestic value-added tax (VAT), a key indicator of industrial and service sector activity, rose 5.9% to 2.78 trillion yuan. Import-related taxes posted even stronger gains, with import VAT and consumption tax climbing 11.2% and customs tariffs rising 10.9%, reflecting recovering import demand.

The securities transaction stamp tax surged 74.8% to 93.5 billion yuan, driven by elevated stock trading volumes in China’s capital markets. Overall stamp tax collection rose 27.8% to 206.3 billion yuan.

Government Spending Accelerates at Fastest Pace in Five Years

On the expenditure side, national general public budget spending reached approximately 9.48 trillion yuan in the first four months, up 1.3% year-on-year. Crucially, spending hit 31.6% of the annual budget target — the fastest pace for the January-April period in five years.

Yao described this as evidence that “more proactive fiscal policies are being implemented more quickly, with fiscal expenditure maintaining necessary intensity and showing a clear characteristic of front-loaded发力.”

Central government spending rose 5.1% to 1.29 trillion yuan, while local government spending increased 0.7% to 8.19 trillion yuan.

Social Welfare and Healthcare Prioritized

Spending on healthcare reached 831 billion yuan, up 11.4% year-on-year, driven by childcare subsidy distributions and increased financial subsidies for basic medical insurance. Social security and employment expenditure rose 7.3% to 1.81 trillion yuan, reflecting continued efforts to stabilize employment and safeguard basic needs.

Yao noted that these figures “fully demonstrate the continuous optimization of fiscal expenditure structure, with ‘real money’ continuing to be directed toward key areas.”

Broader Economic Context

The fiscal data follows the National Bureau of Statistics’ May 18 report showing industrial output grew 5.6% year-on-year in the first four months of 2026, as Xinhua reported. Both revenue and expenditure scales reached three-year highs for the January-April period, signaling that China’s economic recovery is gaining traction amid ongoing policy support.

Outlook

The accelerating revenue growth provides Beijing with greater fiscal space to continue supporting the economy. However, the sharp rise in securities transaction stamp tax — a volatile revenue source tied to stock market activity — introduces an element of uncertainty if market conditions shift. The front-loaded spending pattern suggests the government remains committed to using fiscal tools proactively to sustain the recovery momentum through the remainder of 2026.