China’s slowing economic growth and potential headwinds may suggest fiscal loosening is imminent

China’s slowing investment approvals and lower-than-expected pace of government spending have fuelled debate over whether the country should be ramping up fiscal spending, particularly as economic growth looks to wane in the coming years.

In the first six months of this year, China’s fiscal expenditure rose 4.5 per cent from a year earlier to 12.2 trillion yuan (US$1.88 trillion), accounting for 49 per cent of the annual budgeted total. In comparison, revenue, which rose 21.5 per cent, already reached 59 per cent of the year’s budgeted income, data from the Ministry of Finance showed on Tuesday.