The country's fiscal revenue went up by a large margin in June, marking a record high year-on-year monthly growth this year and the second positive growth since May.
However, the Ministry of Finance (MOF) warned the engine to fuel such fiscal revenue growth was not solid enough.
China's June fiscal revenue rose 19.6 percent from a year earlier at 686.7 billion yuan ($100.54 billion), while spending climbed 21.5 percent, the MOF said yesterday. Fiscal revenue has improved since May along with the economy, the ministry said on its website. The figures indicated a surplus for June of 46.2 billion yuan.
Revenue in May rose 4.8 percent from a year earlier, reversing the downward trend of the past few months.
The fiscal revenue growth to some extent reflected positive changes in the economy, as shown in a growth in business tax collections, the MOF said.
"The growth in business taxes was mainly fueled by the vibrant construction sector, the biggest beneficiary of the 4-trillion-yuan government stimulus," said Wang Yuanhong, economist and head of the Economic Forecasting Department of the State Information Center.
In addition, the revenue growth was also a result of the booming property market and financial services industry as well as the fuel tax reform, he explained. A rising consumption tax also indicated Chinese consumers' strong ability to spend.
However, the 13.8-percent decline in corporate tax reflected that Chinese companies still needed more time to recover, Wang said, dismissing some views regarding absolute confidence in China's recovery.
Combined central and local government revenues in the first half totaled 3.4 trillion yuan, a fall of 2.4 percent from the same period last year.
The country needs to achieve more than 8 percent revenue growth in the second half of the year to realize a full year target of 8 percent growth.
The Chinese government expects revenue to grow 8 percent in 2009, much slower than previous years. Its revenue climbed 18.8 percent in 2008 and 32.4 percent in 2007.
"I believe that as the stimulus package would continue to contribute to growth in investment and domestic demand in the second half of the year, China could achieve the 8 percent growth target," said Jia Kang, president of Institute of Fiscal Science, the Ministry of Finance.