According to the CCP Finance Ministry, in the first nine months of 2022, tax revenues for all levels of the Chinese regime totaled 15.3 trillion yuan (about $2.11 trillion), down 6.6% year-on-year, while government fiscal spending rose 6.2% to 19.04 trillion yuan (about $2.63 trillion).
Bloomberg used the latest data on October 25 to calculate that China’s fiscal deficit at all levels of government reached nearly 7.16 trillion yuan between January and September of this year, nearly three times higher than the same period last year.
Revenue falls, spending increases, and of course this leads to a skyrocketing fiscal deficit.
In his latest show, the independent economist ‘Caijing Lengyan’ stated why government revenues are falling? The Chinese economy in general is in recession. The collapse of real estate sector, has basically destroyed land finance. Along with the “zero-COVID” policy, many companies have closed and laid off employees, business income has decreased, and of course business income tax is also significantly reduced. Business taxes are a major source of local revenue. Moreover, when large rivers dry up, small rivers also dry up. The whole economy goes into a negative cycle, companies lay off employees, and personal income tax will naturally decrease as well.
The independent economist said that land finance, business, and personal income taxes have all fallen, so it’s not uncommon for financial revenues to fall. The Ministry of Finance said the decline rate was 6.6%, but experts did not believe it, saying that the number may be 10% more, a decrease of 16% is possible.
As for why the regime’s fiscal spending has increased so much, “Caijing Lengyan” said that, in addition to nucleic acid testing and basic infrastructure proposed by the outside world, spending on maintaining control may be the main reason.
He believed that, looking at history, the disintegration or collapse of any dynasty was primarily due to a financial crisis, whether it was the Ming, late Tang or Song dynasties. If there were financial problems, the entire dynasty wouldn’t last. The CCP’s fiscal deficit has tripled in the first nine months of the year, which is a dangerous signal. If financial problems exist, the entire regime and army may not be able to function and the regime will suffer.