China's annual revenue falls 2.4% deficit or over 500 billion

Governments ' pockets of money are getting tighter, and China is in a tight state, but the June is a little relieved. The financial revenue and expenditure of June, released by the Ministry of Finance July 13, shows that, after the May revenue growth is positive, June national revenue to achieve positive growth, growth of 19.6%.　　But the entire first half of the year's revenue fell 2.4%. Standard Chartered predicts that China's fiscal deficit is likely to be larger than originally thought, and that the 2009 fiscal deficit is expected to reach 4.4% of the G DP, about 1.5 trillion yuan. At the beginning of the year, the Treasury arranged a budget deficit of 950 billion yuan, accounting for 2.5% of the G DP.　　The central budget deficit of 750 billion yuan, the local fiscal deficit of 200 billion yuan. The Ministry of Finance acknowledges: the balance of fiscal revenue and expenditure is still outstanding all year. The Treasury believes that the recent rise in revenue has rebounded to a considerable extent because of the oil tax reform after the transfer of consumption tax increased more, as well as the impact of some one-off income increase, the basis for sustained revenue growth is not strong, the annual financial balance of payments　　, 2). From the first half of the trend, the first 4 months of the national revenue fell 9.9%, May growth of 4.8%, June growth of 19.6%.　　The first half of the national revenue 3,397,614,000,000 Yuan, down 2.4% from the same period last year. Revenue in the main revenue projects, to achieve growth in the project is that the domestic consumption tax growth of 63.1% year-on-year, sales tax growth of 6.4%, personal income tax year-on-year growth of 0.7%, the income decline of the project is, domestic value-added tax down 3%, corporate income tax down 13.8%, import goods value-added tax, Consumption tax fell 14.9% Year-on-year, tariffs fell 29.9%, securities trading stamp duty fell 74.5%, the vehicle purchase tax fell 6.2% per cent year-on-year.　　In addition, the export tax rebate year-on-year growth of 21.9%, the corresponding reduction in revenue. The Ministry of Finance analysis, the main reasons for the rise in revenue growth in the last two months: first, some positive changes in the economic operation, in the business tax and other related taxes are reflected; second, in 5 June, the liquidation of the last year's arrears of income increased some one-time income, Non-tax income also corresponding increase　　Third, the implementation of oil and tax reform to improve the consumption of oil products to replace the highway road maintenance fees and other six charges and the increase in oil sales in recent months led to a substantial increase in consumption tax, increase cigarette consumption tax also increase part of the income; In the first half, national fiscal spending rose 26.3% from a year earlier. The World Bank has forecast a 5% drop in China's fiscal year. For the rest of the year, it is expected that spending will grow much less than in the first 5 months, with annual spending growing by 22%, meaning that the annual deficit will almost reach 5% of G D p (Figure 4), higher than the budget plan for the size of G D p3% in the Government's work report this year. The bank believes that 1/3 of the deficit is due toThe impact of the revenue policy on the choice of the camera includes an increase in the tax rebate rate for the last two rounds of exports. Despite rising deficit rates, the bank notes that China's fiscal position is still good enough to cope with the rising deficit.　　The bank cautioned that there was an alternative relationship between fiscal stimulus in 2009 and stimulus measures in 2010, and that additional stimulus measures this year could reduce policy space for next year. Make up the deficit gap: there is not only a headache for China in the second half of the growing debt-strapped fiscal budget (Figure 3). Liu Olin, a CICC researcher, said the market had seen a marked rise in inflation and the depreciation of the dollar after the US government began buying the Treasury plan in March, and that the bond market had been under heavy pressure in 5 June.　　Some EU Member states are more financially than the US. In the face of the fiscal deficit, our first reaction is to send out bonds. The Treasury announced its 2009 third-quarter bond issuance programme. According to the announcement, the Treasury will issue 24 bonds in the third quarter of this year, flat in the second quarter. But it is noteworthy that the surge in the second quarter of discounted government debt will be reduced in the three quarter, while the key period of the issuance of Treasury bonds than the size of the plan at the beginning of the increase.　　Market participants pointed out that this can be seen as a financial deficit may be a breakthrough in the budget signal, the second half of the debt in the issuance of the speed or circulation will be significantly accelerated. "Yes, we think it is possible, but not necessary, to issue additional debt." Stephen Green, director of China Research at Standard Chartered Bank, forecasts that China's fiscal deficit in 2009 was about $600 billion trillion, more than the budget for the beginning of the year.　　That means the need for additional government debt to cover the deficit gap. The National People's Congress approved the 2009 Treasury bond issue balance can reach 6.271 trillion yuan, compared with the end of 2008 to report the balance of government bonds increased by 943 billion yuan.　　Enough to cover a budget deficit of $750 billion and a local debt of $200 billion. Green believes the Treasury will make full use of the 2009-year bond issue limit, so StanChart will raise its net issuance forecast for 2009 from $540 billion to $950 billion, which will raise the official government debt to 20% of GDP by 2009 years.　　Since January-June, the Treasury only issued more than 300 billion yuan in government debt, the second half still has a lot of room for debt. "The Treasury's choice is to get permission from the State Department (approved by the NPC) to increase the size of the 2009 proposed government debt from 950 billion to 1.5 trillion yuan, or adjust it to other options," he said. "There are plenty of benefits to this," he says, not only to save a lot of Treasury deposits, but to leave more cash reserves for the Treasury in the next two years, without using social security funds. In addition, the Government's role in stimulating the economy can be openly and transparently reflected.　　In recent months, many Asian countries, including Thailand and India, have expanded their bond issuance programmes. But there are some drawbacks to this approach. First, it is somewhat embarrassing for the Treasury to recognise the bias in the budget arrangement, and the process of applying for additionalNeed to coordinate consultations with the State Department and other departments.　　Second, given the many criticisms raised by the US government's issuance of bonds, the same move by China would have some negative effects that could raise concerns about the worsening fiscal situation.　　Third, the move will spark a backlash in the bond market, especially as long-term bond yields will be pushed higher.　　Easing the financing dilemma: a move or a choice of Treasury deposits in addition to issuing Treasuries to ease the financing dilemma, Mr Green argues that the Treasury uses its deposits at the central bank or a more realistic option (Figure 5). The use of Treasury deposits has pros and cons. On the positive side, it is easy to do without the approval of the State Department or the NPC and will be welcomed by the bond markets, which inject new liquidity into the bond market and remove the pressure on the central bank to release liquidity to markets through open market operations ———　　The Treasury's use of deposits means releasing liquidity to the banking system, which has a certain hedging effect on increasing deposits. One drawback is that the Treasury will have less money on its central bank account ——— could erode social security funds. By the end of April 2009, the Treasury's single treasury account ——— including central revenue and local revenue ——— total deposits amounted to 1.782 trillion yuan.　　If the Treasury were to spend 500 billion yuan in 2009, there would be only about 1 trillion dollars remaining in the year-end accounts. Although the fiscal balance is likely to show a large daily volatility, it is enough to withstand the shocks. But one of the bigger constraints on the use of fiscal deposits is that StanChart believes that most of the money in the account (perhaps 1.5 trillion yuan) is for social security funds.　　Although theoretically these funds could be recovered by issuing bonds in 2010, the status quo is clearly unsatisfactory. Stephen Green speculated that using treasury deposits would be the Treasury's preferred option. If the deficit is too large, the Treasury will have to increase the size of its bond issue. The issuance of government bonds will make up for the 2010 budget deficit and raise more money to finance deposits.　　This will bring the official debt balance to 24% of G D p by the end of 2010. This reporter Jongming Zhou Yanni intern jianming