Page 29 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2022 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2023

With regard to enhancing policy intensity, we will strengthen coordinated
planning for government funds and better combine the use of deficits, special
bonds, interest subsidies, and other instruments to expand the scale and maintain

the appropriate intensity of government spending. Expenditure in the national
general public budget is projected to be 27.513 trillion yuan, an increase of 5.6%.

First, the deficit-to-GDP ratio will be appropriately increased. We have set
the deficit-to-GDP ratio for the year at 3%, which is 0.2 percentage points higher
than last year. The government deficit is projected to be 3.88 trillion yuan, an

increase of 510 billion yuan over 2022. This figure consists of a central government
deficit of 3.16 trillion yuan, an increase of 510 billion yuan, and a local government

deficit of 720 billion yuan, maintaining the same level as last year.
Second, the scale of local government special-purpose bonds will be

appropriately expanded. This year, a ceiling of 3.8 trillion yuan will be set on new
local government special debts, an increase of 150 billion yuan over last year. We

will appropriately expand the list of areas to which funds from bonds sales can be
channeled as well as the scope for using such funds as project capital. We will
support local governments in meeting regular financing needs.

Third, transfer payments from the central government to local governments
will be scaled up. Transfer payments from the central government to local

governments will reach 10.0625 trillion yuan, an increase of 3.6% (or 7.9% after
deducting one-time special transfer payments to support primary-level

governments in implementing tax and fee cuts and ensuring key public wellbeing
projects). Of this amount, general transfer payments will total 8.712571 trillion

yuan, up 7.6%; special transfer payments (including central government budgetary
investment) will come to 849.929 billion yuan, up 11.6%; and 500 billion yuan in
one-time special transfer payments will be used to support primary-level

governments in implementing tax and fee cuts and ensuring key public wellbeing
projects.

With regard to enhancing policy effectiveness, we will deepen reform and
strengthen management to allocate fiscal resources, implement fiscal policy, and

use funds more effectively.
First, we will continue to improve the structure of government spending. In

28