China's fiscal revenue fell 1.7% in 2025 from a year earlier, the finance ministry said on Friday, the first contraction since 2020 as a protracted property slump and weak domestic demand saddled the economy.
Fiscal revenues in 2025 totaled 21.6 trillion yuan ($3.11 trillion), a ministry official said at a press briefing.
Expenditures grew 1% to 28.7 trillion yuan, slowing from 3.6% growth in 2024.
Growth in China's fiscal revenue slowed to 1.3% in 2024. Revenue dropped 3.9% in 2020 when the initial outbreak of the COVID-19 pandemic disrupted economic activities.
Tax revenue rose 0.8% in 2025, while income from non-tax sources slumped 11.3%.
Revenue from stamp taxes on securities transactions surged 57.8%, buoyed by a stock market rally.
Revenue from land sales by China's local governments declined for a fourth straight year as the property downturn rolled on, although the 14.7% drop in 2025 narrowed from a 16% fall a year earlier. These revenues have in the past been a key driver for local economic growth measures and the sharp drop has strained local authorities' coffers and weighed on overall business activity.
China's economy grew 5.0% in 2025, meeting the government's target, as strong global demand for goods helped offset weak domestic consumption - a phenomenon that economists warn will be difficult to sustain.
Chinese leaders have pledged to continue to implement a more proactive fiscal policy this year and maintain the necessary fiscal deficit, overall debt levels and expenditure scale to support broader economic growth.
In a separate development, China is considering the sale of hundreds of billions of yuan in special government bonds to recapitalize some of its largest insurers, Bloomberg News reported on Friday citing people familiar with the matter, strengthening the biggest players in a sector facing consolidation pressures.
The potential bond sale would raise about 200 billion yuan ($28.8 billion) to help recapitalize the insurers, the report said, adding that the proceeds will be injected into state-controlled firms including China Life Insurance Group Co, the People's Insurance Co Group of China Ltd (PICC), and China Taiping Insurance Group Co.
The capital injection could be announced as early as this quarter, one of the people said, according to the report.
It would mark the first time China has used special bonds to support insurers, extending a financing tool previously reserved for state-owned banks.
The initiative could help bolster insurers that were directed to support the stock market during last year's volatility, while positioning them to help regulators manage smaller, higher-risk insurance companies.
In January last year, China unveiled plans to channel hundreds of billions of yuan in investment from state-owned insurers into shares to support the stock market.
Insurance companies' equity investments as a proportion of their total investment assets rose to 10.03% in the third quarter of 2025 from 7.51% in 2022, according to estimates from China Securities.
The potential recapitalization also comes as the insurance sector grapples with eroding profitability due to persistently low interest rates, with numerous small and mid-sized insurers reporting deteriorating solvency ratios in the third quarter last year.
Last year, China's finance ministry unveiled a recapitalization plan of around $72 billion to boost big state banks' core capital, a move aimed at helping lenders manage lower profit margins and asset-quality strains.
