China fiscal revenue rises 14.4% in April

PBOC Says Sharp Drop in Lending Due to Local Government Debt Swaps

BEIJING:China's fiscal expenditures rose by 4.5 per cent in April from the previous year, slowing sharply from a 20.1 per cent jump in March, data from the Finance Ministry showed on Friday.

The total assets of China's banking industry reached 208.6 trillion yuan (32.09 trillion US dollars) at the end of March, up 16.7 percent year on year, the country's banking regulator said on Thursday.

The government is trying to arrest a prolonged slowdown in the economy, which expanded 6.9% in 2015, the slowest pace in a quarter of a century.

But a report in official media this week, quoting an "authoritative person", warned that too much reliance on debt to kick-start activity could lead to a financial crisis or an economic recession.

NEW yuan loans fell to a six-month low in April, a sign of policy-makers' possible reluctance to overstimulate the economy.

"Also, it could be related to (recent) government controls on the property sector and tighter lending rules", Li said, referring to recent attempts to curb sharp home price rises in big cities and limit credit to unprofitable business sectors.

China's broadest measure of money supply, M2, was up 12.8% at the end of April compared with a year earlier, below the 13.4% rise at the end of March.

"The foundation for revenue growth remains unsteady as downward pressures on China's growth remain and economic restructuring still faces many challenges", the ministry noted.

April saw net new issuance of 1.2trn in government bonds, mostly at the local level, much of which would serve to refinance off-budget local government debt previously included in the TSF tally, but a part of those funds would be funnelled into new spending.

China International Capital Corp said in a note that the figures were all weaker than expected, indicating that the credit expansion in the first quarter was unsustainable.

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