In an effort to save the economy from a wave of US tariffs, China has 'burned money' by 9.3 trillion yuan (RM6.2 trillion) in the first three months of 2025 alone.
The spending has set a new record and is the highest since 2022.
This public spending accounts for 22% of their annual budget, exceeding last year's rate.
But the strategy seems to be backfiring as government revenue fell 2.6%, land sales fell 16.5%, and tax revenue continued to decline for two consecutive months.
As a result, the budget deficit exploded 41% to 2.3 trillion yuan.
So is this a smart strategy or not?
With exports facing the threat of tariffs of up to 245% from the US, the property market continues to be gloomy, and consumers are still being frugal, analysts expect China's growth to sink below 4% — far from the official target of 5%.
China will likely continue to issue bonds, cut interest rates, and loosen bank reserves to “pump” more funds into the system.
The question is, will these funds be enough to cover the growing economic wounds?
