China’s local governments are on track for the first decline in annual revenue from sales of land use rights since 2015, dimming Beijing’s hopes of shoring up a sagging economy with public works projects, reports Nikkei Asia. Sales for the first half of 2022 sank 31% on the year, China’s Finance Ministry reports.
Regional governments and municipalities have come to rely heavily on this income stream, as other revenue has dwindled due to tax breaks aimed at boosting China’s economy. Revenue from land-rights sales exceeded the amount from taxes in 2020 for the first time in data going back to 2010.
But income from this lifeline has slumped since last summer, as tighter restrictions on the housing sector chill real estate demand. Last month’s year-on-year drop of 39.7% was the steepest decline since May 2015, amid an economic shock.