(Yicai Global) April 20 -- Fiscal revenue, especially tax revenue, is a key indicator of macroeconomic development.
After posting negative growth in fiscal revenue last year, Shanxi and Heilongjiang, two of China's most energy-rich provinces, managed to turn it around in the first quarter, indicating that local economic growth is stabilizing and on an uptrend.
During the first three months this year, public budget revenues in the province totaled USD7.1 billion (CNY49 billion), up 12.6 percent from the year earlier. Specifically, tax revenues were up 41 percent to CNY35.64 billion, data released by the Shanxi finance department show.
In Heilongjiang, public budget revenues increased 8.3 percent (CNY2.45 billion) to CNY32 billion.
Liaoning swung back into the black in fiscal revenue, and its economic growth has remained stable, with its public budget revenue hitting CNY63 billion in the first quarter, up CNY6 billion or 10 percent, Liaoning provincial finance department data indicate.
The northeast provinces of Shanxi, Heilongjiang and Liaoning form a microcosm of the entire nation. In the first quarter, national public budget revenues totaled around CNY4 trillion, up 14 percent annually.
Rising prices, stabilizing economic growth and increases in the volume and value of imports were the main drivers of the strong growth in government revenues, Liu Zhuyu, head of the treasury department at China's finance ministry, told Yicai Global.
Significant increases in the producer price index (PPI) and some commodity prices thus far this year have translated into a sharp rise in fiscal revenues calculated based on current prices, he said. The rebound in prices has spurred an uptick in corporate production activities, increased profitability and renewed investor confidence, which has in turn resulted in strong growth of tax revenues in the industrial and services sectors.
For example, the 40 percent jump in Shanxi's tax revenue in the first quarter closely correlates with rises in the local PPI and commodity prices. The province is one of China's largest coal producers.
PPI in Shanxi surged 24.5 percent in January and February, according to the local statistics bureau.