CHINA-ECONOMY: CHINESE ECONOMY CONTRACTS YIELDING LOWER REVENUES
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Bloomberg financial services reported that “The income of central and local governments contracted 9.9% in the first two months of the year compared to a year ago”, describing it as the deepest fall since February 2009. It said “Tax revenue declined more than 11%, with drops in value-added taxes, corporate income taxes and car purchase taxes undercutting the government’s coffers just as it needs to find extra money to stimulate the economy.” It said the sharp declines are hurting the public sector’s ability to spend:“Spending also dropped, but a surge in outlays on health-care and social security kept the decline to 2.9% from a year ago.”
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