A Fiscal Resilient First Half
China's national tax revenue exceeded 10 trillion yuan in the first half of 2026, rising 4.9% year-on-year, the Ministry of Finance reported. The growth was supported by an improving industrial economy — particularly a recovery in factory-gate prices — and stronger corporate profits, even as large-scale tax and fee cuts remained in force.
Revenue Composition
- Total fiscal revenue: 83.4 trillion yuan cumulative, up 3.5%
- Tax revenue: 68.1 trillion yuan, up 3.9%
- Non-tax revenue: 15.3 trillion yuan, up 1.6%
- Central revenue: 35.5 trillion yuan, up 4.6%
- Local revenue: 47.9 trillion yuan, up 2.7%
The Cut vs Collect Balance
The National People's Congress had approved 1.91 trillion yuan in additional tax and fee reductions for 2026 — a policy commitment to ease business burdens. That the revenue still grew nearly 5% underscores how the recovering industrial profit cycle (industrial profits rose 18.2% in January–April) is generating enough incremental tax to more than offset the structural cuts.
Expenditure Side
General public budget expenditure reached 94.8 trillion yuan in the same period, up only 1.3% — a deliberate slowdown versus the expenditure surge of 2024. This reflects a pivot toward fiscal consolidation at the local government level, where debt-servicing pressure remains acute after years of off-balance-sheet borrowing.
Policy Signal
The H1 revenue outperformance gives Beijing more fiscal headroom for H2, but the government is unlikely to abandon its restrained expenditure stance. Any new stimulus is more likely to be targeted — urban renewal, technology funds, consumer subsidies — than broad-based.