Page 39 - REPORT ON THE IMPLEMENTATION OF THE 2022 PLAN FOR NATIONAL ECONOMIC AND SOCIAL EVELOPMENT AND ON THE 2023 DRAFT PLAN FOR NATIONAL ECONOMIC AND SOCIAL EVELOPMENT

This year, local governments’ stock of special-purpose bonds has been set at 3.8
trillion yuan, an increase of 150 billion yuan over 2022, and the use of these bonds

will be expanded as appropriate to more areas and to more projects in which they
can serve as capital. We will better coordinate the use of investment from the
central government budget, local government special-purpose bonds, and policy
and development finance instruments.
We will increase investment in areas of weakness and key sectors in economic

and social development and actively support scientific research, rural revitalization,
major regional development strategies, education, basic living standards, green
development, and other key initiatives. We will continue to refine the system of
transfer payments, increase central government transfer payments to local

governments, allocate more fiscal resources to lower-level governments, and
optimize the distribution of fiscal resources at and below the provincial level,
ensuring that more fiscal resources are channeled to poor areas and less-developed
areas. We will further improve the mechanism for direct allocation of budgetary
funds to prefecture- and county-level governments, so that governments at the

primary level will have the resources they need to meet basic living needs, pay
salaries, and maintain normal government functions. Party and government bodies
must maintain strict fiscal discipline, continue to tighten their belts, and strictly
control general expenditures. We must effectively prevent and control local

government debt risks.
 Implementing a prudent monetary policy in a targeted and effective way
We will maintain a proper and adequate liquidity supply and use monetary
policy tools to adjust both the monetary aggregate and the monetary structure, in
order to meet the needs of macroeconomic operation, keep market expectations

stable, and prevent financial risks. To better serve the real economy, in 2023,
increases in the M2 money supply and aggregate financing will be kept generally in
step with nominal GDP growth. We will support financial institutions in meeting
the financing demands of the real economy through market- and law-based means

and guide them to increase medium- and long-term loans to the manufacturing
sector. We will expand the volume and reach of inclusive loans for MSEs, increase
credit support for sci-tech SMEs and SMEs that use special and sophisticated
technologies to produce novel and unique products, and work for steady drops in
overall business financing costs and personal consumer credit costs.

We will make more use of structural monetary policy tools and extend the

38