Focus on Arts and Ecology

January 30, 2025 

Eighty-five Chinese cities failed to meet their 2023 revenue targets, out of the 279 that disclosed data, a Southern Weekly analysis has found. Shortfalls were concentrated in regions reliant on coal, lithium and heavy industry. 

Local governments receive revenue mainly from taxation but also from land sales and other sources. 

Yulin, a city in Shaanxi province that produces 13% of China’s raw coal, reported the biggest percentage gap. Its revenue reached just 75% of the targeted CNY 88 billion (USD 12 billion). A city energy official put this down to declining coal prices.

Shanxi, another coal-reliant province, faced similar challenges. Of its eight cities that disclosed fiscal data, only one met its revenue target, with the rest again putting their shortfalls down to falling coal prices.

Areas linked to the electric vehicle (EV) industry also fell short of expectations in 2023. Ningde in Fujian province is home to CATL, the world’s largest EV battery maker. It saw local GDP dip as prices for lithium carbonate, a key ingredient for EV batteries, fell by 90%, from CNY 600,000 (USD 82,300) per tonne to CNY 70,000 (USD 9,600).

Meanwhile, Jiaozuo, an industrial city in Henan province, reported reaching 80% of its revenue goal for 2023, and cited “weak demand, industrial overcapacity, and subdued economic expectations”.

When coal and mineral prices decline, local governments that rely heavily for their revenue on extractive industries can face challenges in prioritising green transitions while maintaining economic growth.

(Sources: Dialogue Earth)