China’s Fiscal Revenue Rises 5.1% as Land-Sale Income Remains Under Pressure

China's fiscal revenue increased 5.1% year on year in the first nine months of 2026, but falling revenue from land sales continued to put pressure on local government finances as authorities sought to sustain economic growth and fund public services.

National fiscal revenue reached 17.2 trillion yuan, or approximately $2.58 trillion, between January and September, according to figures from the Ministry of Finance reported by Reuters. The growth rate was slower than the 5.7% increase recorded in the first eight months of the year.

Tax revenue rose 6.1% year on year during the nine-month period, while non-tax revenue increased 1.2%. Government expenditure grew 1.0%, compared with 1.2% growth in January-August, suggesting that spending growth remained relatively restrained even as policymakers continued to support economic activity.

The figures offer a mixed picture of China's public finances. Revenue growth indicates that government income has continued to expand, but the slowdown in the headline rate and the pressure on land-related income highlight the uneven conditions facing different levels of government.

One of the most significant weaknesses remains the property sector. Revenue from land sales, an important source of funding for local governments for many years, fell 27.9% in January-September compared with the same period in 2025. The decline was slightly smaller than the 28.6% contraction recorded during the first eight months, but it still represents a substantial reduction in a traditional funding source.

The property downturn has broader consequences than lower land-sale proceeds alone. Weak land demand can affect local government revenue, construction activity and investment linked to residential and commercial development. It can also complicate the financing of infrastructure projects and other public spending commitments.

To support local finances and investment, China has accelerated the issuance of local government special-purpose bonds. Net special bond issuance reached 3.56 trillion yuan during the first nine months, representing 81% of the annual quota, according to Reuters. September issuance totaled 633.5 billion yuan, an increase of 214.8 billion yuan from a year earlier.

The government has also indicated that part of the 2027 issuance quota will be brought forward. Such measures can provide local authorities with additional financing capacity, although the economic impact depends on how funds are allocated, how quickly projects proceed and whether the resulting spending generates sustainable returns.

China's wider economic backdrop remains uneven. Official data released earlier in October showed that the economy expanded 4.5% year on year in the third quarter. Industrial activity and exports provided support, while domestic consumption and fixed-asset investment remained comparatively weak. The property market continued to weigh on confidence and local government finances.

Fiscal policy therefore faces a balancing act. Governments need to support infrastructure, public services and economic development while managing debt risks and adapting to a weaker property-related revenue base. Additional borrowing can help smooth the transition, but it does not eliminate the need for more sustainable sources of income.

For businesses, the pace of public spending can influence infrastructure contracts, construction demand and local economic activity. Companies that depend on government procurement or development projects may benefit from faster bond issuance, although funding conditions and implementation will vary by region.

The latest figures suggest that China's fiscal position is still generating revenue growth, but the underlying structure is changing. The slowdown in revenue growth and continued weakness in land-sale income will keep pressure on policymakers to improve fiscal sustainability while maintaining support for economic activity.