Apr 2, 2013
Translated by Li Jing

China collected more than one trillion yuan in real estate taxes at the local level in 2012, accounting for 16.6 percent of all local fiscal revenue according to a recent report published by the Shanghai-based E-house China R&D Institution (上海易居房地产研究院).

The report said that this 1 trillion yuan in revenue was an increase of 23.2 percent over 2011 and 20 times the amount collected in 2001.

Revenue collected from land transfer fees was 2.69 trillion yuan in 2012, a decline of 15 percent from 2011. Land transfer fees in 2012 accounted for 31 percent of total local fiscal revenue, down 7 percentage points from 2011.

Liu Weiwei (刘卫卫), a researcher with E-house China R&D, told the EO that there had been no change in terms of the pattern of local governments relying on land transfer fees for revenue and that such revenue has been expanding at the local level since 2003.

The report also indicated that while the scale of China's local fiscal expenditure has continued to expand over the past decade, since growth in outlays has been quicker than growth in local fiscal revenue, deficits at the local level have also grown.

In 2012, local revenue was about 6.11 trillion yuan, an increase of 16.5 percent over the amount collected in 2011. Local expenditure, however, was over 10.6 trillion yuan with an increase of 15.7 percent over 2011. A gap of almost 4.6 trillion yuan that needs to be filled with transfers from the central government.

According to a report produced by the National Audit Office in 2011, the maturity of local government debt would peak over the 2011 to 2012 period.

Liu noted that "Given that most of the debt that fell due during 2011 and 2012 was rolled over to the following year, the amount of debt falling due in 2013 is likely to maintain a high level. If we add in speculation that interest rates might be adjusted after the new year, then the coming two years will be the most risky in terms of the debts owed by local governments in China."

Economic Information Daily: 2012年房地产总体税收首次突破万亿大关