Page 50 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2022 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2023

5. Strengthening management of local government debt
We will step up inter-departmental coordination with regard to oversight, see
responsibilities are fulfilled by all stakeholders, strengthen oversight on both the

supply and demand sides of funding, and resolutely prevent any increase in the
cases of hidden government debt by cutting off the channels through which such

debts are raised. We will urge provincial governments to step up risk analysis and
assessment and carry out regular oversight, review, and evaluation with greater
focus on prefecture and county governments, and to rely on their own efforts to

gradually lower the level of debt risks and steadily defuse existing hidden debts.
We will keep a close watch on developments, act quickly to deal with new hidden

debt cases, and hold those responsible to account. We will strengthen holistic
governance over companies that serve as platforms for local government financing,

gradually phase out their government financing functions, and facilitate their
transformation on a category-by-category basis. We will enhance management

over funds raised through special-purpose bonds in the post-investment phase to
prevent the practices of regarding allocated funds as being spent and paying no
attention to how funds are used after allocation. We will improve mechanisms for

managing projects, see that principal and interest repayments are made on time
and in full, and ensure no risks arise as the result of legally mandated bonds.

6. Intensifying oversight on accounting
We will implement the Guidelines on Further Strengthening Oversight on

Accounting, and facilitate the establishment of an accounting oversight system
whereby financial departments assume primary responsibility for oversight,

relevant departments conduct oversight according to their respective
responsibilities, all institutions conduct internal oversight, relevant intermediary
agencies conduct professional oversight, and trade associations conduct oversight

to uphold self-discipline. We will also improve the working mechanism featuring
lateral coordination between all institutions responsible for oversight and vertical

linkages between central and local governments. We will carry out a national
accounting oversight campaign to resolutely investigate and punish violations of

laws and regulations and to tighten fiscal discipline, with a focus on preferential
tax and fee policies and belt-tightening efforts by Party and government offices.

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