China’s 30% Gain in Tax Revenue Counters Risks from Local-Government Debt

http://www.bloomberg.com/news/2011-07-19/chinese-tax-revenue-surges-30-countering-risk-from-local-government-debt.html

China's tax revenue rose 29.6 percent to 5 trillion yuan ($773 billion) in the first half of the year, giving officials more room to maneuver as they grapple with swelling local-government debt.

The gain, reported by the Ministry of Finance on its website today, compared with a 32.4 percent increase in the first quarter from a year earlier.

“Stable” economic growth and rising company profits helped to bolster revenue, with inflation also playing a role, the ministry said. The fiscal strength that encouraged Standard & Poor’s to raise China’s debt rating in December may help the nation to absorb any fallout from banks’ loans going bad after stimulus spending that began in 2008.

“Strong tax revenue should strengthen the fiscal position,” said Chang Jian, an economist at Barclays Capital in Hong Kong who formerly worked for the Hong Kong Monetary Authority and the World Bank. “There should be little worry about tax and fiscal revenue growth as the economy keeps growing at 8 to 9 percent.”

:eyes:

Where did they get 30% more tax revenue with a GDP growth that is really around 5%?? I think this may be more creative accounting.