The coming year will likely be a time of fiscal prudence for Guangdong, as the provincial government has decided to rein in growth of public spending in 2020: expenditures will grow by the same rate as what is projected for revenues, around 4%. This is down sharply from last year’s 10% spending growth, while revenues are projected to fall only slightly from last year’s 4.5% growth.
Such restraint will result in public spending of 1.8 trillion yuan, around 500 billion yuan more than projected revenues, which is nothing to sneeze at. This being China, by far the single biggest line item, of 221.17 billion yuan, will be spent on the all-encompassing masterplan of “One Core, One Belt and One Zone” for the region’s development, i.e., no elaboration is necessary. However, looking more closely, certain sectors are still being prioritized and will be allowed to eat at the public trough more voraciously this year.
It seems that “China’s Silicon Valley” remains a key focus for growth, as “scientific economic development” and transport infrastructure will get by far the biggest increase in percentage terms. Meanwhile, the three key pillars of development – healthcare, education and social security – will get the biggest absolute increases, while “rural revitalization” will be right up there with them.
Here are the key targets for 2020:
High-quality, scientific, economic development: 29.07b (+24.7%);
Transport construction: 13.68b (+36.7%)
Rural Revitalization 60.9b (+8.4%)
Education: 64.24b (+10.9%)
Social security: 47.83b (+11.5%)
Healthcare: 54.20b (+9.8%)
Environmental protection: 17.18b (+9.1%, down from 109%)
Culture: 6.50b (+10%)
Social governance: 31.11b (+7.7%)
Provincial masterplan: 221.17b (+11.5%).
On the revenue side, the government expects to forego less of its income in 2020, with rebates, fees and various other transfers to local governments amounting to around 221 billion yuan, down from around 300 billion yuan in 2019.
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