(Yicai Global) June 28 -- China's fiscal revenue, the money the state collects to fund the public sector, has surged over 4,100 times since the People's Republic was formed in 1949, while its ratio to gross domestic product has been falling since the country's reform and opening-up policy started in 1978.

The government collected about CNY26 trillion (USD3.8 trillion) last year, up from less than USD1 billion seven decades ago, public data shows. The growth in fiscal revenue slowed 1.2 percentage point last year to 6.2 percent from 2017, and its ratio to GDP fell to 20.3 percent last year, down from 39.3 percent in 1960.

The ratio started to contract after leader Deng Xiaoping introduced the idea of the socialist market economy in 1978. It fell from 31.1 percent in that year to 12.3 percent in 1993, but peaked at 22.7 percent in 2013.

The reasons behind the fluctuations are tax reforms and rising economic growth. China's GDP growth accelerated to 9.4 percent between 1978 and 2012 from an annual average of 6 percent between 1953 and 1978, according to the World Economic Forum.

The nation changed the way tax revenues are shared between the central and regional governments in 1994. In 2008, local authorities started adding land transfer fees to their coffers. This tally grew from 64 percent in 2008 to make up 86 percent of their total tax revenue of CNY7.54 trillion last year. 

Fiscal expenditure, or state spending on areas such as social security and unemployment benefits, has swelled more than 4,400 times to about CNY30 trillion in the past 70 years. It rose to about CNY30 trillion last year from CNY6.8 billion in 1949.

The nation has also changed the way it uses tax funds. After 1978, China diverted its attention from industrial and infrastructure projects to increasingly support education, social security and healthcare.

Editor: Emmi Laine