China Fiscal Year 2024 Budget

Impulse Note

Budget breakdown

Revenue by Source

Max = ¥7.1T (VAT) · Total ¥24.5T

Value-Added & Goods Taxes

Value-Added Tax (VAT)13% standard, 9% food/utilities, 6% services

¥7.10T5.2% GDP

Consumption TaxExcise on tobacco, alcohol, cars, fuel, jewellery

¥1.60T1.2% GDP

Income Taxes

Corporate Income Tax25% standard; 15% for high-tech & small enterprise

¥4.00T2.9% GDP

Personal Income TaxProgressive 3–45%; capital gains taxed separately

¥1.55T1.1% GDP

Trade & Other Taxes

Customs DutiesImport tariffs; strategic reductions post-WTO

¥0.84T0.6% GDP

Other TaxesStamp duty, land use, resource tax, urban construction

¥2.41T1.8% GDP

Non-Tax Revenue

Non-Tax RevenueCentral dept. special proceeds, admin fees, state dividends

¥4.47T3.3% GDP

Deficit FinancingCentral treasury bonds + local special bonds + ¥1T ultra-long bonds

¥4.1T3.0% GDP

Total Resources Available

¥28.6T

Note: China's four-budget system: This report covers the National General Public Budget (GPB) only. China operates three additional budgets: Government-Managed Funds (land-sale revenue), State Capital Operations (SOE dividends), and Social Insurance Funds (pension & healthcare contributions). The official 3% deficit applies only to the GPB. Economists estimate the broad deficit at ~6.5% of GDP.

Expenditure by Function

Max = ¥4.21T (Social Security) · Total ¥28.6T

Social Spending

Social Security & EmploymentPensions, unemployment insurance, employment subsidies

¥4.21T3.1% GDP

EducationK-12, higher education, vocational, rural schools

¥4.17T3.1% GDP

Health & SanitationPublic health programs, hospital subsidies; –9% COVID normalization

¥2.00T1.5% GDP

Infrastructure & Development

Urban & Rural CommunitiesUrban infrastructure, utilities, rural revitalization

¥2.17T1.6% GDP

Agriculture, Forestry & WaterFood security, flood control, irrigation — record +12.7%

¥2.71T2% GDP

TransportationHighways, railways, airports, ports — slight –1%

¥0.88T0.6% GDP

Defence, Security & Science

National DefencePLA: personnel, equipment, procurement, R&D; +7.2%

¥1.67T1.2% GDP

Science & TechnologyStrategic R&D, basic research, semiconductor & AI; +6%

¥1.00T0.7% GDP

Debt & Administration

Debt Interest PaymentsService on central government bonds; +8.8%

¥1.30T1% GDP

General Government & OtherAdministration, public security, housing, energy, culture

¥4.50T3.3% GDP

Total Expenditure

¥28.6T

Note: Central vs. local spending: Of the ¥28.6T total, only ¥4.1T was direct central government spending; the remaining ¥24.4T was local government spending. This extreme fiscal decentralization — where locals execute ~85% of spending — is a defining feature of China's public finance.

Context & explanations

🎓

Education: China's Largest Budget Line for a Decade

For over a decade, education has been the single largest line item. The ¥4.17T allocation covers compulsory education, rural school construction, vocational training, universities, and scholarships.

Education: 14.6% of all GPB spending

🌾

Agriculture Spending Surged 12.7% — a Record High

Spending on agriculture jumped nearly 13% to ¥2.7T in 2024, driven by rural revitalization programs, flood control, irrigation upgrades, and food security investments.

Agriculture: +12.7% · All-time record ¥2.70T

💊

Healthcare Fell 9% — COVID Normalization

Health expenditure fell over 9% to ~¥2.0T. This is actually a normalization: 2022–2023 saw massively elevated spending due to COVID testing, quarantine, and vaccination campaigns.

Health: ¥2.0T · COVID normalization

🛡️

Defence: Official 1.3% of GDP — But Actual Is Debated

China's official defence budget was ¥1.665T ($231B), a 7.2% increase. Independent estimates diverge: SIPRI estimates ~$309B; a RAND study estimates ~$471B accounting for off-budget R&D and paramilitary spending.

Official: ¥1.67T · estimates: $295–471B

💸

The Hidden Deficit: Land Sales Collapse

The official 3% deficit masks true fiscal strain. The Government-Managed Funds budget saw receipts fall 10.5% to ¥7.3T as the property crisis continued. PIIE estimates the broad deficit at ~6.5% of GDP.

Broad deficit: ~6.5% GDP

🔬

Science & Technology: Strategic Priority

Government S&T spending grew 6% to ~¥1.0T. Combined with all-sector R&D, China's total R&D reached ¥3.613T (2.68% of GDP) — second globally behind the US.

R&D: ¥3.61T total · 2.68% GDP

Primary sources: Primary sources: PRC Ministry of Finance — Budget Execution Report 2024; National Bureau of Statistics — Statistical Communiqué 2024; CEIC Data — Final Account: GPB Expenditure 2024; ChinaPower/CSIS; PIIE — China's Official Deficit Is No Longer Meaningful; SIPRI; Texas National Security Review.

Methodology: GDP reference: ¥136.5T nominal 2024. Exchange rate: avg ~7.19 CNY/USD. Revenue: ¥21.97T collected + ¥2.54T supplementary = ¥24.51T. Tax revenue ¥17.50T (–3.4% y/y). Non-tax revenue ¥4.47T (+25.4%). Expenditure line items from CEIC confirmed actuals and MoF data. The broad deficit of 6.5% of GDP (PIIE) includes all budget layers and off-budget items.