On the left, the blue and grey lines show the year-over-year growth of government fiscal revenue and expenditure respectively. The Chinese government typically steps up spending during periods of slower economic growth. While its revenue growth has been broadly in line with economic growth, there were moments when revenue was pared back to provide additional support to the economy via tax cuts or suspension of government fees and charges.

On the right, actual deficit equals to fiscal revenues minus fiscal expenditures (as shown in the left chart). Budget deficit is the actual deficit adjusted with the fiscal stability fund. Augmented deficit is an estimate of all the fiscal resources used by the government to support economic growth, i.e. fiscal balance plus investment via local government financing vehicles, policy banks and other channels. In this year, although pressures from COVID on the economy keep rising, Chinese governments will likely remain cautious in expanding these deficits.