Local fiscal revenue: steady in the east, rapid in the west; this year's spending focuses on technological innovation and people's livelihood

In 2025, the overall fiscal revenue and expenditure across the country remained stable, with an optimized structural trend, and 27 provinces achieved positive growth in general public budget revenue. A review of the 2026 budget reports and the fiscal revenue and expenditure data for 2025 released by various provinces, autonomous regions, and municipalities found that in the past year, the major eastern economic provinces continued to play a supporting role through fiscal support, while fiscal revenue in the western and northeastern regions showed a clear rebound.

Although many budget reports from different regions indicate that the pressure to balance fiscal revenue and expenditure in 2026 will still exist, most regions generally expect fiscal revenue to maintain steady growth, with the growth targets for general public budget revenue (hereinafter referred to as “fiscal revenue”) set between 2% and 3% for 2026. In the new year, financial resources will further tilt toward key areas such as technological innovation, people’s livelihood security, and industrial upgrading.

Local Fiscal Revenue “Stable in the East, Faster in the West”

In 2025, nearly 90% of provinces (27) achieved positive growth in fiscal revenue, with only Shanxi, Inner Mongolia, Qinghai, and Shaanxi—four energy provinces—experiencing negative growth due to fluctuations in commodity prices.

Over the past year, the major eastern economic provinces continued to exert fiscal support. The six eastern provinces collectively achieved approximately 5.6 trillion yuan in fiscal revenue, accounting for 46% of the country’s local fiscal revenue. Guangdong led the nation with 1.39 trillion yuan in fiscal revenue. Among central and western provinces, Sichuan, Henan, and others ranked among the top in fiscal revenue scale.

According to the Guangdong Provincial Finance Department, last year Guangdong’s fiscal performance was characterized by “leading in total revenue and growth rate, strong support for key expenditures, and stable grassroots operations.” To address the prominent issue of regional development imbalance, Guangdong planned and implemented reforms to the fiscal system below the provincial level, adjusting and optimizing the revenue-sharing ratio between the province and cities/counties, significantly increasing financial resources allocated to cities and counties, and implementing surplus collection incentive policies across the province. In 2025, the proportion of tax revenue in 57 counties (cities) in Guangdong increased by 7 percentage points, effectively improving revenue quality and further strengthening autonomous financial capacity to support the “three guarantees” (employment, basic livelihood, and housing security) at the grassroots level.

In terms of growth rates, eastern provinces maintained steady fiscal growth last year, while western and northeastern regions experienced faster growth. Fiscal revenue growth in Tibet, Jilin, and Xinjiang remained double-digit at 14.7%, 13.3%, and 10.5%, respectively. Xinjiang’s fiscal revenue has achieved double-digit growth for four consecutive years.

From the revenue structure perspective, Beijing, Zhejiang, Jiangsu, Hainan, and Tianjin have tax contributions exceeding 75%, with Beijing leading the nation at 86.5%. Provinces with higher growth rates like Jilin and Xinjiang contributed significantly through resource, asset, and capital mobilization in non-tax revenue, such as Jilin’s 59.2% increase in income from paid use of state-owned resources, becoming an important supplement to revenue growth.

Expected Continued Tight Balance Pressure in 2026

In the new year, the fundamental conditions for long-term economic growth remain unchanged, and the basic foundation of fiscal operations remains solid. Most provinces’ 2026 budget reports generally indicate that China’s economy will continue its steady and positive trend, supporting fiscal revenue growth. However, regions such as Beijing, Zhejiang, and Fujian also stated that the pressure to balance fiscal revenue and expenditure in 2026 will still be significant.

On the revenue side, many budget reports cite factors such as the deepening impact of external environment changes, insufficient local effective demand, and the need for recovery in traditional industry tax bases as adverse influences on revenue. Provinces highly dependent on foreign trade like Zhejiang and Fujian pointed out that uncertainties in export growth could affect fiscal revenue. Budget reports from Shaanxi, Henan, and other provinces noted that traditional pillar industries such as energy and chemicals face sluggish tax base growth, while emerging industries, despite faster growth, have long cultivation cycles and limited scale, making it difficult to offset revenue shortfalls from traditional industries in the short term.

On the expenditure side, spending on people’s livelihood sectors such as education, healthcare, and social security continues to grow rigidly. The demand for support in areas like technological innovation, rural revitalization, and ecological protection is increasing, adding to fiscal pressure. Budget reports from Xinjiang and other provinces also pointed out that in 2026, government debt repayment and interest expenses will grow rigidly, and there will be substantial needs to resolve government arrears to enterprises.

In the coming year, China will continue to implement proactive fiscal policies, strengthening countercyclical and cross-cycle adjustments. Beijing’s 2026 budget report summarized that fiscal revenue and expenditure conflicts will become more prominent, with more obvious characteristics of tight balance and constraints.

Limited Financial Resources Focused on Key Areas

According to statistics from Securities Times, 20 provinces have already announced their 2026 fiscal revenue and expenditure budgets, with most setting growth targets between 2% and 3%, while some provinces like Beijing and Henan set targets at 4%. Guangdong expects a 3% increase in general public budget revenue in 2026, reaching 1.44 trillion yuan, continuing steady growth; Jilin, building on a 13.3% high growth in 2025, set a target of 3.7% for 2026; Xinjiang proposed a high growth target of about 10%, maintaining its leading position nationwide.

From the disclosed 2026 fiscal budget goals, most regions expect fiscal revenue to remain stable, with expenditures focusing on technological innovation, people’s livelihood security, and industrial upgrading, providing solid financial support for the economic and social development in the first year of the 14th Five-Year Plan.

To address the increasingly prominent fiscal revenue and expenditure contradictions, many regions have clarified plans to strengthen fiscal coordination and improve revenue and expenditure management. Some areas, like Sichuan, will continue to enhance tax base cultivation, actively utilize idle and inefficient assets, improve the contribution of state-owned assets and enterprises, and regulate non-tax revenue collection and management. Meanwhile, they will establish long-term mechanisms for frugal spending, continue to cut unnecessary expenditures, and ensure sufficient funding for key areas.

When preparing the 2026 expenditure budget, regions focus on optimizing expenditure structure, with continued increased investment in technological innovation. Guangdong allocated 3.721 billion yuan to support systematic basic research aligned with strategic, frontier, and market orientations, promoting sustainable development of laboratory systems; Zhejiang invested 4.239 billion yuan in major science and technology innovation platforms to enhance overall innovation capacity; Beijing optimized the use of industrial funds and increased government procurement of自主创新 products to deepen integration of innovation chains and industrial chains.

Public livelihood expenditure will remain high. Zhejiang explicitly stated that more than two-thirds of general public budget expenditure will be allocated to people’s livelihood sectors, with 3.218 billion yuan dedicated to basic living security for vulnerable groups and 1.463 billion yuan to support employment and entrepreneurship for key groups; Guangdong allocated 72.146 billion yuan to implement ten major livelihood projects, including 3.989 billion yuan to promote high-quality full employment, planning to conduct over 300,000 subsidized vocational skills training sessions, develop over 8,000 public welfare positions, and focus on assisting employment difficulties.