From Bloomberg, November 17:
China’s broad fiscal spending slumped in October by the most since at least 2021, crippling a key driver of investment and economic growth.
The combined expenditure in China’s two main budgets — the general public account and the government-managed fund book — tumbled 19% in October from a year earlier to 2.37 trillion yuan ($334 billion), according to Bloomberg calculations based on data released by the Ministry of Finance on Monday.
It was the steepest slide since comparable data started in early 2021, while the value of money spent was the least since July 2023. Goldman Sachs Group Inc. said its proprietary “augmented fiscal deficit” metric narrowed last month, indicating that budget policy “turned less supportive of growth.”
The plunge reflects an evolution of government policies and underlines waning fiscal support for the world’s second-largest economy, which lost steam across the board last month.
Investment, a large part of which is driven by budget expenditure, posted an unprecedented decline in October, adding to a drag from sluggish consumption and weaker foreign demand.
The “data suggest that the meaningful deceleration in government spending growth, together with a larger portion of incremental spending being spent on repaying corporate arrears — rather than investment projects — may have significantly weighed on headline fixed-asset investment growth,” Goldman economists including Lisheng Wang wrote in a note.
Infrastructure-related spending under the general public budget, including outlays on transportation, water conservation and urban and rural community affairs, fell almost 26% on year last month to 361.6 billion yuan, according to Bloomberg calculations based on the Ministry of Finance numbers....
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On top of that Chinese household borrowing is dropping. From Caixin, Nov. 17:
China’s Credit Growth Weakens as Households Cut Back on Debt
