Qinghai province is the most fiscally distressed in China among all 36 provinces and provincial-level cities, according to a document released by China’s finance ministry.
Qinghai has a fiscal distress index of 90 points, followed by Ningxia, Tibet and Gansu with over 80 points, the document shows.
The index is mainly based on the ratio of fiscal funds needed to ensure basic government operation, social welfare and minimum salary to the general fiscal revenue.
The higher the points, the more fiscally distressed the province is and the more likely the central government would provide fiscal support or Fiscal Transfer Funds.
It’s clear from the index that the provinces in western and central China are facing bigger challenges.
On the other side, regions like Zhejiang, Tianjin, Shenzhen, among others, have indexes of lower than 50 points. Beijing enjoys the strongest fiscal fund status with an index of 20 points.