Given the tenacity with which the media has tracked the rise and rise of China’s foreign exchange reserves (hey, we all like big numbers and bellwether trends), it’s difficult to process the concept that Beijing might be hard up. And it isn’t really. But in 2009 the state coffers will certainly be less full. Finance Minister Xie Xuren said yesterday that it “will be a difficult year” for government financing. The US$880 billion in fiscal revenue generated last year – up 19% on 2007 – is unlikely to be repeated. With falling tax revenues and falling profits at state-owned firms, as well as the huge expenditure tied to Beijing’s fiscal stimulus package, analysts expect China to post a budget deficit of anywhere between US$73.2 billion and US$117.1 billion this year. The same day as Xie’s announcement, the government cut taxes on the import and export of a host of raw materials used in export-processing. Over the weekend Premier Wen Jiabao talked of new bailouts for the auto and steel industries. At least this had a positive effect on the stock market, which closed up 3.3% on its first day of trading in the new year, with mining stocks unsurprisingly leading the way. But as relief for industry rises, so state revenues fall.