Revenue from the sale of land-use rights in China, a critical source of income for local governments, fell by 13.2% in 2023 as the country’s deep real estate recession hit municipal finances hard, reports Nikkei Asia. The data, released Thursday by China’s Finance Ministry, shows that sales dipped to their lowest since 2017. Sales declined for a second consecutive year for the first time since 2012, the earliest data available.
Local governments in China sell usage rights for land, which is owned by the state, to real estate developers. New development on condominium projects has slowed due to the extended slump in sales, leading to a drop in land-use rights transactions.
For the central government, China’s general public budget revenue increased by 6.4% last year. Tax revenue was up 8.7%, the first increase in two years. Value-added tax revenue increased 40%, rebounding from 2022 refunds enacted to support corporate cash flow.