Page 3 - REPORT ON THE EXECUTION OF THE CENTRAL AND LOCAL BUDGETS FOR 2022 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2023

both domestic and international imperatives, responded to the Covid-19 epidemic
while also promoting economic and social development, and ensured both
development and security.

We rigorously executed the budgets reviewed and approved at the Fifth
Session of the 13th NPC and strengthened macro regulation to respond to shocks

from factors that exceeded expectations. We steadily raised the quality of
development, made major advances in scientific and technological innovation,
deepened reform and opening up across the board, and scored solid progress in

advancing the Beautiful China Initiative. We essentially kept employment and
prices stable, effectively ensured food and energy security, and met people’s basic

living needs, thus maintaining economic and social stability.
Over the past year, public finance work faced multiple challenges and fiscal

operations remained tight, posing great difficulties. The economy initially got off
to a steady start in the first quarter, with revenue in the national general public

budget increasing by 8.6%. In the second quarter, however, as influenced by the
resurgence of Covid-19 and the evolving international landscape, downward
pressure on the economy suddenly increased. Added to that, large-scale

value-added tax (VAT) credit refund policy was applied. As a result, fiscal revenue
fell sharply, with a decrease of 41.3% in the national general public budget in April.

After the introduction of a package of policies and follow-up measures to stabilize
the economy, the economic downturn was effectively curbed. The decline in fiscal

revenue narrowed to 32.5% and 10.5% in May and June, respectively. Moreover, as
the application of the VAT credit refund policy was largely completed in the first

half of the year, fiscal revenue took a turn for the better in the second half. Positive
growth resumed in August with an increase of 5.6%, and a faster rate of recovery
was registered in the following months.

During the execution of budgets, finance departments firmly implemented the
decisions and plans of the Party Central Committee and the State Council,

responded proactively to changes and difficulties, and stepped up analysis and
assessment of economic conditions and fiscal revenue and spending. We

strengthened unified management of fiscal resources, put state assets and
resources to good use through multiple avenues, and reviewed and took back

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