China’s broad fiscal spending fell 6.7% year on year in August, accelerating from a 4.4% decline in July, as local governments faced continuing revenue pressure from the property-sector downturn. Broad fiscal spending also posted year-on-year declines in several months of 2026, including an 11.9% drop in June, according to Ministry of Finance data released Sept. 18. General public budget expenditure totaled CNY 18.1451 trillion in the first eight months, up 1.2% from a year earlier, while revenue rose 5.7% to CNY 15.6633 trillion. The broad fiscal deficit narrowed to CNY 5.5 trillion, or about $821 billion, with the shortfall shrinking by roughly one-fifth in August. Central government spending increased 6% through August, but local government spending rose only 0.3% to CNY 15.33 trillion. Local governments typically fund infrastructure, education and social services, making their limited spending growth significant for domestic activity. The property downturn has weakened land-use-rights transfer income, an important source of local-government financing. Through July, cumulative local government spending reached about 54% of the planned budget, while increased central transfers had not translated into a meaningful acceleration in local expenditure. Revenue growth outpaced expenditure growth, underscoring the uneven state of public finances. Tax revenue rose 6.6% to CNY 12.91 trillion, while non-tax revenue increased 1.5% to CNY 2.75 trillion. Securities-trading stamp duty jumped 82% to CNY 216 billion, and individual income tax rose 14.5% to CNY 1.21 trillion. By contrast, land-related revenue remained weak, with state-owned land-use-rights transfer income down 28.6% to CNY 1.38 trillion. The figures coincide with weak domestic demand, as consumption growth nearly stalled and investment continued to decline. State-owned policy banks have begun deploying funds from a program that can unlock CNY 800 billion, mainly for infrastructure projects in 2026. Investors and analysts are watching the pace and composition of fiscal transfers, any acceleration in special bond issuance and changes in infrastructure project approvals.