Page 24 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2022 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2023

Fifth, fiscal management was gradually enhanced. To improve the
management system for local government debt, we set up a regular mechanism for
cross-departmental coordination on oversight and prudently advanced trials for

zero hidden debt in some localities where conditions permitted. With a
commitment to preventing any increase in new hidden debts and to addressing all

existing hidden debts, we carried out stringent oversight and implemented strict
accountability to mitigate the risks posed by hidden local government debt and
bring them under better control. We moved faster to create a comprehensive

system for performance-based budget management, covering the whole budgetary
process and all sectors, projects, and budget types. Further progress was made in

building a modern treasury management system, and integrated budget
management was extensively implemented. Reforms in the government

procurement system and in the practices for government procurement of services
were deepened. Accounting oversight and internal finance department controls

were tightened. Finance departments performed their duties as investors of
state-owned financial capital. The reporting system for state-owned asset
management was implemented across the board based on a general inventory of

the four classes of state-owned assets, namely assets held by financial enterprises,
non-financial enterprises, and government offices and public institutions, and

natural resource assets.
Sixth, finances remained sustainable. We have always remained committed

to hard work and frugality and made every effort while working within our means.
When formulating policies, planning expenditures, and taking on debt, we have

considered both what is needed and what is possible, balanced both current and
long-term benefits, and maintained sufficient momentum without mortgaging our
future. Spending on official overseas visits, official vehicles, and official hospitality

was cut significantly. We set the budget deficit at reasonable levels, keeping the
overall deficit-to-GDP ratio over the past five years under 3% and China’s

government debt ratio at about 50%, which is significantly below that of other
major economies. We have thus left policy space for coping with new challenges in

the coming years.
Over the past five years, despite accelerating changes on the global landscape,

23