China's fiscal activity picked up in the January-March period, with central government expenditure rising 2.6% from a year earlier, the finance ministry reported. Total fiscal spending for the quarter reached 7.47 trillion yuan, up from a smaller gain the previous year when spending increased 1%.
Fiscal revenue also rose, increasing 2.4% year-on-year to 6.16 trillion yuan in the first quarter. Officials said the proportion of annual budgeted expenditure executed in the quarter was 24.9% - the highest level seen in recent years - reflecting an explicit effort to front-load government outlays to help achieve this year’s economic growth objective.
At a media briefing, a finance ministry official pointed to commitments made at an agenda-setting meeting last month, where policymakers pledged to maintain a "more proactive" fiscal stance for 2026. That package of measures included promises of record public spending, increased government bond issuance and larger transfers to local governments as part of a broader effort to support domestic demand.
Despite the lift in central spending, local government finances continued to show weakness linked to the property sector. Revenue from government land sales dropped 24.4% in the first three months compared with a year earlier. The ministry noted that land-sale revenue by local governments fell 25.2% year-on-year over the first two months of 2026, after a 14.7% contraction in 2025.
Local administrations have long depended on proceeds from the sale of land-use rights to property developers as a significant source of income. The ministry noted that the prolonged downturn in the property market, which began in mid-2021 and persists, has continued to weigh on local government coffers.
The ministry also provided the exchange rate used in its release: $1 = 6.8377 Chinese yuan renminbi.
Context and implications
The data underline Beijing's decision to step up fiscal support in the early months of the year. While central spending has been increased to help meet growth targets, the sharp fall in land-sale receipts highlights ongoing strain in the property sector and its knock-on effect on local government revenue streams.
Authorities have signaled further fiscal measures for 2026, including higher public spending and greater transfers to localities, but local finances remain exposed to the continued weakness in land sales and property activity.