(Yicai) Aug. 7 -- Most of the 30 Chinese provincial-level regions that have released fiscal data for the first half of this year have reported stronger-than-expected general public budget revenue, the sum total of tax and non-tax revenues, but several finance officials warn local fiscal revenue-expenditure conflicts remain significant.

Only two provinces achieved double-digit growth in general public budget revenue, with Xizang Autonomous Region at 37 percent and Xinjiang Uygur Autonomous Region at 10 percent. Twenty-two other reported increases, led by Gansu province, Shaanxi province, and Beijing at 6 percent or higher, while Jiangxi province, Liaoning province, and Guangxi Zhuang Autonomous Region were the only ones to see a decline.

The general public budget expenditure growth in 24 provinces was lower than that of their revenues, with 12 of the 30 reporting a decline. Guangdong, China's largest provincial economy, has not yet published its first-half financial report.

The overall local fiscal revenue and expenditure in the six months ended June 30 showed a trend of revenue exceeding expectations, while expenditures still need to be further strengthened, Luo Zhiheng, chief economist at Yuekai Securities, told Yicai.

The budget revenue from local government funds fell 26 percent from a year earlier, while income from state-owned land use rights sales plunged 32 percent, he pointed out. Coupled with the mandatory spending obligations and debt repayment needs, the local fiscal situation remains relatively tight, he noted.

While first-half tax revenue growth has been acceptable, the significant decline in government fund revenues, primarily from land sales, has resulted in substantial pressure on local fiscal operations, a director of a grassroots finance bureau in an eastern region said to Yicai.

The fiscal revenue and expenditure data have been relatively good, noted a finance official from a western region, but added that the heavy debt burden has created significant repayment pressure.

A director of a grassroots finance bureau in a central region stressed that the local financial situation remains quite challenging.

The financial difficulties faced by some local governments require an intensified effort to revitalize existing assets in the short term, while in the long term, there is a need to promote transforming urban investment firms and reshape the tax base, Luo said. It is essential to identify and develop distinctive sectors that align with local advantages and to create a favorable business environment, he added, but cautioned against attracting industries through subsidies and tax incentives.

In the short term, the central government must increase transfer payments to local governments to help them navigate difficulties amid ongoing adjustments in the real estate market and significant debt repayment pressure, Luo stressed.

From a medium- to long-term perspective, the central government should continue to promote reforms in the fiscal and tax systems, appropriately reduce the administrative powers and expenditure responsibilities of local governments, while avoiding provisioning them with continuous large and inefficient fiscal subsidies, Luo said.

Editors: Tang Shihua, Martin Kadiev