Page 25 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2022 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2023

the impact of the Covid-19 epidemic, the downward pressure on the domestic
economy, and other tests, our public finances operated smoothly overall, budget
execution was satisfactory, and our proactive fiscal policy created powerful effects,

enabling us to secure long-term economic stability for the country.
These achievements are fundamentally attributable to the strong leadership of

the CPC Central Committee with Comrade Xi Jinping at its core and to the sound
guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a
New Era. They are the result of the strict review and oversight of the NPC, the

suggestions and proposals offered by the CPPCC National Committee, and the
concerted efforts of all local authorities, all government departments, and people of

all our nation’s ethnic groups.
While affirming the achievements of fiscal reform and development, we also

see that there are difficulties and problems in budget execution and public finance
work that have yet to be resolved. They are mainly as follows:

 As the foundations for China’s economic recovery remain unstable, a portion
of local governments, especially those at the primary level, are facing relatively
large gaps between revenue and expenditure.

 Some government departments and institutions use their authority or
industrial resources to levy unjustified charges and some businesses engage in

illegal activities such as fraudulently claiming VAT credit refunds.
 Government funds need to be used in a better way, and better efforts should be

made to refine policies on expenditures and strengthen performance-based
management.

 Some localities have failed to realize the full potential of projects financed by
special-purpose bonds as a result of insufficient planning, inadequate
coordination between bond issuances and preparations, and a lack of

regulation at all stages from beginning to end, with funds left to sit idle and
construction on projects not getting off the ground.

 The problems of new hidden debt and fraud related to the clearing of debt
continue to arise from time to time. Some local state-owned enterprises and

public institutions are becoming platforms for local financing. Some city and
county governments lack the capacity to meet debt obligations and face

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