Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Government finances in China - statistics & facts
For a long time, China’s government budget grew by double digits year on year, but this situation has changed gradually over the last decade. Revenue growth has fallen below an average of five percent annually since 2019. At the same time, deficits increased and were estimated to range at more than seven percent of the GDP in both 2025 and 2026.
The largest single item in the Chinese government budget for many consecutive years has been education. In contrast, welfare spending is considerably lower than in Western countries. Spending on social security and employment only accounted for around 14.8 percent of the total budget in 2024.
In recent years, revenues were increasingly not on par with expenditures. While budget deficits have been widening since 2011, total government debt is mounting up and reached 84 percent in 2023, more than double from 37 percent in 2013. Compared to developed economies, this is still a moderate level.
However, the situation is aggravated by large amounts of debt held by state-owned companies, which have often taken up debt under the supervision of local governments. Total debt of the non-financial sector in China reached nearly 300 percent in 2024. This is a comparatively high level and was only surpassed by a few highly indebted jurisdictions such as Japan and Hong Kong.
China’s fiscal budget
China is a country with a low to moderate government spending ratio. Total government expenditure amounted to around 33 percent of the GDP in 2023, while this amounted to about 34 percent in the United States. For other Western countries, such as the United Kingdom, Germany, or France, this surpassed 40 or even 50 percent. Among Asian countries, however, government spending ratios are considerably lower, and China is ranging in a medium position.The largest single item in the Chinese government budget for many consecutive years has been education. In contrast, welfare spending is considerably lower than in Western countries. Spending on social security and employment only accounted for around 14.8 percent of the total budget in 2024.
In recent years, revenues were increasingly not on par with expenditures. While budget deficits have been widening since 2011, total government debt is mounting up and reached 84 percent in 2023, more than double from 37 percent in 2013. Compared to developed economies, this is still a moderate level.
However, the situation is aggravated by large amounts of debt held by state-owned companies, which have often taken up debt under the supervision of local governments. Total debt of the non-financial sector in China reached nearly 300 percent in 2024. This is a comparatively high level and was only surpassed by a few highly indebted jurisdictions such as Japan and Hong Kong.
Current developments
As China’s economic development is increasingly faltering and large amounts of debt have built up in the economy, the government budget will remain under pressure and revenues and expenditures will need to be rebalanced. The most difficult part will be the consolidation of local government finances and state-owned company debt. However, as most of the debt is from domestic lenders, the government has considerable leeway to manage the situation.
