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China's shrinking tax revenue poses challenge to economy and response to US tariffs


Published on 2025-03-21 21:41:11 - Moneycontrol
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  • China's falling tax revenue is constraining its ability to manage economic challenges and respond to Trump's tariffs, as deflation, weak consumption, and a collapsing property market widen the country

The article from Moneycontrol discusses the challenges China faces due to its shrinking tax revenue, which is impacting its economy and its ability to respond to U.S. tariffs. China's tax revenue has been declining, influenced by a slowing economy, a property market slump, and reduced corporate profits. This reduction in fiscal capacity comes at a time when the U.S. has imposed tariffs on Chinese goods, escalating trade tensions. The article highlights that lower tax revenues limit China's options for economic stimulus or retaliatory measures against the U.S. tariffs. Furthermore, it notes that local governments in China, heavily reliant on land sales for revenue, are also feeling the pinch, which could lead to reduced public spending and infrastructure projects. This situation complicates China's economic strategy, as it must balance domestic economic stability with international trade relations.

Read the Full Moneycontrol Article at:
[ https://www.moneycontrol.com/world/china-s-shrinking-tax-revenue-poses-challenge-to-economy-and-response-to-us-tariffs-article-12972187.html ]