(Yicai Global) Nov. 2 -- Chinese local governments should make better use of state-owned assets, such as houses, land and cars, in order to help plug the gap between fiscal revenue and expenditure, the Ministry of Finance said.

Local governments should conduct a thorough inventory of the assets that they occupy and use to make sure that they are being used efficiently, such as through the sharing, swapping, leasing or selling of these resources, and that none are lying idle, the ministry said in a document released yesterday.

China had CNY43.5 trillion (USD6 trillion) worth of administrative and institutional state assets in 2020, according to official data. This refers to infrastructure, housing, land, vehicles, office supplies and other forms of property that belong to all levels of government offices.

Local governments have been making more effort in recent years to dispose of idle state-owned assets as the gap between China’s fiscal revenue and expenditure widens. The country’s general public budget revenue slumped 6.6 percent in the first three quarters from a year ago to CNY15.3 trillion (USD2.1 trillion) while general public budget expenditure jumped 6.2 percent to CNY19 trillion.

The disposal of government assets helped lift China’s non-tax revenue 23.5 percent in the first three quarters from a year ago to CNY2.9 trillion (USD398.3 billion), the ministry said.

Fujian province, for instance, logged a 63 percent surge in revenue from the sale of state-owned assets between January and July from the same period last year, thanks to a big jump in the disposal of assets, such as empty properties, the southeastern province’s department of finance said.

And the Xinjiang Uyghur Autonomous Region was able to increase its revenue from the disposal of government resources by 55.7 percent over the period through the sale of unused oil and gas blocks.

While local governments are able to drum up more income by disposing of their state-owned assets, such revenue is not sustainable, said Luo Zhiheng, chief economist at Yuekai Securities. The sale of government assets, meant to bring in stable revenue for several decades, at a single auction, is a nonrecurring form of fiscal revenue.

Editor: Kim Taylor