Buried in China\u2019s latest government budget were some numbers that add up to an alarming trend. Tax revenue is dropping.<\/p>\n\n\n\n
The decline means that China\u2019s national government has less money to address the country\u2019s serious economic challenges, including a housing market crash and the near bankruptcy of hundreds of local governments.<\/p>\n\n\n\n
Weak tax revenue also puts China\u2019s leaders in a box as they square off with President Trump, who has imposed 20 percent tariffs on goods from China and threatened more to come. Beijing has less spare cash to help the export industries<\/a> that are driving economic growth<\/a> but could be hurt by tariffs.<\/p>\n\n\n\n The drop in tax collections leaves China\u2019s leaders in an unfamiliar position. Until the last several years, China enjoyed robust revenue, which it used to invest in infrastructure, a rapid military buildup and extensive industrial subsidies. Even as economic growth has slowed gradually over the past 12 years, taking a dent out of consumer spending, tax revenue held fairly steady until recently.<\/p>\n\n\n\n Read it all<\/a>.<\/p> China\u2019s Government Is Short of Money as Its Leaders Face Trump https:\/\/t.co\/ElmQsX47Dt<\/a><\/p>— Michael Standaert (@mstandaert) March 21, 2025<\/a><\/blockquote>