Page 14 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2022 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2023

underdeveloped areas and areas in need. This provided robust support for local
governments, especially those of counties and districts, in fully implementing tax
rebate policies and tax and fee reduction policies and guaranteeing the three

priorities (people’s basic wellbeing, payment of salaries, and normal government
functioning). Meanwhile, we kept a close watch on local fiscal operations,

strengthened category-based management of key counties and districts, and held
relevant provinces and municipalities to account by urging them to promptly
discover and address risks of failure to guarantee the three priorities at the primary

level.
Expanding the scope of application for directly allocated funds to more effectively inject

them into county and district governments
We worked to directly allocate funds closely related to the operations of county

and district governments. Last year, directly allocated funds amounted to 4.1
trillion yuan, accounting for more than 40% of all central government transfer

payments to local governments. The central government refined relevant filing
mechanisms, strengthened cooperation with auditing departments and competent
authorities, and established a system for overseeing the use of funds on a

per-category basis, so as to guard against a one-size-fits-all approach. As a result,
funds were allocated at a fast pace, leading to positive effects.

Combining supervision with support to help local governments forestall and defuse
risks

The central government made regions with high debt risks, fragile treasury
balances, and inadequate financial resources the focus of monitoring, and provided

timely warnings and notice to local governments about hidden risks. We
strengthened accountability of localities and departments, advanced the building
of long-term mechanisms for forestalling and defusing hidden local government

debt risks, conducted trials for zero hidden debts in Beijing, Shanghai, and
Guangdong, and publicized representative cases where officials were held to

account for hidden debts. We guided provincial governments in strengthening
coordinated planning for financial resources, so that they provided support to

alleviate principal and interest repayment pressure on high-risk cities and counties.
On the basis of strengthening review of assets and capital verification and

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