Decline in Land Sales Revenue in China

BEIJING (Reuters) – Revenue from land sales by Chinese local governments dropped 22.4% year-on-year in the first eleven months, according to finance ministry data released on Monday.

The decline was 22.9% for the period from January to October.

Such revenue, once a major contributor to local governments' financial resources, has sharply decreased as developers reduce land purchases amid a prolonged property market slump.

This decline in land sales income has strained local authorities' budgets, impacting their ability to service debts, particularly those incurred off the books.

Recently, the central government approved the use of local governments' special bond proceeds for purchasing idle land or increasing land reserves for sale.

In November, China also introduced a 10 trillion yuan ($1.38 trillion) debt relief package for local authorities to enable them to better allocate resources toward economic development.

($1=7.2466 Chinese yuan renminbi)