This issue provides an overview of the macroeconomic trends in Q1 2020, some policy updates and hot topic analysis.
Here are some macro-economic highlights:
Total bank loans reached 7.44 trillion yuan, the highest quarterly level on record
According to data from the PBoC, in Q1, the total aggregate financing to the real economy (AFRE) reached 11.08 trillion yuan or 961 billion more than the same period last year. This is mainly because GDP declined by 6.8% in the first quarter. Total loans to the real economy increased by 1.19 trillion and reached 7.44 trillion yuan, the highest quarterly level on record.
Fiscal spending decreased by 5.7%, while fiscal revenue reduced by 14.3%
As a result of negative GDP growth, China’s general public budget revenue reduced by 14.3% in the first quarter year-on-year. The situation has worsened compared to 2019 when fiscal income growth hit a 30-year low with a growth rate of 3.8% reaching 19.04 trillion yuan.
As a result of the coronavirus outbreak in many countries, China’s economic growth has been seriously hit, particularly after the countrywide lockdown that took place at the end of January and during February. The unprecedented damage caused by the pandemic has presented the global and Chinese economy with several challenges. So, how is China’s private sector weathering this storm, particularly since the majority of these companies are small and medium-sized enterprises? What challenges does the private sector face? Are there any opportunities in the post pandemic period?
China Tax Leader, Central China Markets Leader, Shanghai Office Lead Partner, PwC China
Tel: + (21) 2323 3029