Communist China’s deficit reaches historic high

Communist China’s government budget deficit for the January-September period was 7.16 trillion yuan, almost three times the 2.6 trillion yuan deficit for the same period last year, according to an analysis of data released Tuesday by the Ministry of Finance. The ministry said government revenue fell 6.6% to 15.3 trillion yuan between January and September as authorities gave tax cuts to companies to boost the economy. Government spending, which is now focused on infrastructure for growth and job creation, rose 6.2% to 19.04 trillion yuan.

 Official data released Monday, nearly a week later than scheduled, a day after the unveiling of the new Politburo Standing Committee under Xi Jinping after the 1st Plenary Session of the 20th Central Committee, showed that mainland China’s economic growth rebounded to 3.9% year-on-year in the third quarter, despite harsh enforcement of “”Zero Covid”” policy. But the new Chinese Communist Party (CCP) leadership formed by Xi’s cronies worried markets, with Hong Kong stocks plunging more than 6% in response to the catastrophic crash.

 Beijing has set a growth target of about 5.5% for this year, but many analysts now believe this is unlikely to be achieved. The CCP is facing a crisis in its real estate market, which along with the construction industry accounts for a quarter of its gross domestic product. In October, prices of second-hand homes fell by the most since 2014.

 The real estate market in communist China is in a downward spiral, with global demand continue falling and a weak Yuan limiting the central bank’s ability to provide policy support,”” Julian Evans, an analyst at UK-based Capitol Macro, said in a note.