Key facts
- Chinese provinces are increasing profit remittance rates from state-owned enterprises.
- This move aims to secure alternative funding sources amid fiscal stress.
- Local revenues fell short of public expenditure in the first quarter.
- Provinces including Guangdong, Jiangxi, Jiangsu, and Hainan have announced plans to raise collection rates.
- These plans are part of regional five-year plans for 2026-2030.
A growing number of Chinese provinces are proposing to increase profit remittance rates from state-owned enterprises (SOEs) to secure alternative funding sources. This comes as local revenues fell short of public expenditure during the first three months of the year, marking the worst first-quarter fiscal stress since 2020. Provinces including Guangdong, Jiangxi, Jiangsu, and Hainan have announced plans to raise collection rates on state capital returns. These measures are part of their regional five-year plans for the period of 2026 to 2030. This strategy follows a similar move by the central government.