Decision of the Standing

Committee of the National

People’s Congress on
Strengthening the Review of
and Supervision over the
Central Budget
Updated: 2021-04-29

Decision of the Standing Committee of the National

People’s Congress on Strengthening the Review of and
Supervision over the Central Budget

(Adopted at the 13th Meeting of the Standing Committee of the Ninth

National People’s Congress on December 25, 1999; and revised at
the 28th Meeting of the Standing Committee of the Thirteenth
National People’s Congress on April 29, 2021)

The review of and supervision over the central budget must be further
strengthened for these purposes: fulfilling the budgetary review and
supervision functions of the National People’s Congress and its
Standing Committee mandated by the Constitution and laws; acting
on plans and requirements of the Central Committee of the
Communist Party of China on strengthening the functions of
reviewing and supervising budgets and final accounts by the people’s
congresses and their standing committees; advancing law-based
governance across the board; improving the system of budgetary
review and supervision with Chinese characteristics; regulating
budgeting behaviors, improving budget performance and practicing
economy; and better exerting the significant role of the central
budget in the modernization of the country’s governance system and
capacity, high-quality development, social progress, improvement of
people’s livelihoods, and deepening of reform and opening up across
the board. Therefore, the following decisions are made:

I. Exhaustive review and full-process oversight of government

budgets and final accounts shall be strengthened. In doing so, the
National People’s Congress and its Standing Committee shall, under
the centralized, unified leadership of the Central Committee of the
Communist Party of China, serve the overall work of the Party and
the country, carry out law-based review and supervision through a
people-centered approach targeting key areas with an emphasis on
the effectiveness, and ensure the implementation of the Constitution
and laws and national principles, policies, decisions and plans.

1. The review of and supervision over fiscal policies shall be

strengthened. The review and supervision shall focus on the following:
compliance with national principles, policies, decisions and plans;
alignment with economic and social development goals and the
overall requirements of macroeconomic regulations; improvement of
medium-term fiscal planning to provide financial support for major
national strategic tasks; efforts to fully heed the opinions and
suggestions of the deputies to people’s congresses and people from all
sectors of society while making fiscal policies; and the soundness,
feasibility, and sustainability of fiscal policies.

2. The review of and supervision over general public budgets shall be

strengthened. The review of and supervision over the total spending
and spending structure of general public budgets shall focus on the
following: compliance with national principles, policies, decisions
and plans; the total spending and its changes; the size of the fiscal
deficit and its proportion to the estimated annual GDP; and the
adjustment and optimization of the spending structure, strict control
of general expenditures, and the increase in the efficiency of
allocating and using government funds.

The review of and supervision over key expenditures and major

investment projects shall focus on the following: the coordination of
key expenditure budgets and expenditure policies; changes in the
scale of key expenditures and their structural improvement;
argumentation of decisions on key expenditures, as well as the policy
objectives and performance; the compatibility of major investment
projects and the national economic and social development plans;
and argumentation of decisions on major investment projects, and
the allocation and performance of such investments.

The review of and supervision over department budgets shall focus

on the following: budgetary management for all departmental
revenues and expenditures; the alignment of department budgets,
with expenditure policies and departmental responsibilities; the
development of project databases; budgets for key departmental
projects and their performance; the allocation of new assets; the use
of carryover and surplus funds; and the rectification of problems
identified in the audit.

The review of and supervision over transfer payments from the

Central Government to local governments shall focus on the
following: support for the Central Government in exercising its fiscal
powers and fulfilling its expenditure responsibilities through various
transfer payments; efforts to maintain a financial balance between
regions and improvement of the capability to guarantee public
services at the primary level; improvement and standardization of the
transfer payment system and improvement of the transfer payment
structure; the regular evaluation and exit from special transfer
payments; the availability and use of budgeted transfer payments;
and the performance of transfer payments.

The review of and supervision over revenues in the general public

budget shall focus on the following: the alignment of budgetary
revenue projections with economic and social development goals and
the overall requirements of national macro-regulation; the
reconciliation between tax revenues and the corresponding tax bases;
the compliance of budgetary revenue collection with laws and
regulations and the integrity of the budgetary revenues; the
improvement of the structure and quality of the budgetary revenues;
and the law-based regulation of the management of non-tax
revenues.

3. The review of and supervision over government debts shall be

strengthened. The review of and supervision over Central
Government debts shall focus on the following: setting a reasonable
Central Government bond ceiling for the year based on the deficit and
the Central Government bond limit at the end of the previous year,
and keeping the difference between the balance and limit of the
Central Governemnt bonds within an appropriate range; assessing
government debt risks and achieving a long-term balance between
stable growth and risk prevention. The review of and supervision over
local government debts shall focus on the following: budgetary
management of local government debts; assessing the risks facing
local government debts based on the debt ratio, the interest expense
ratio and other indicators; setting a reasonable ceiling for local
governments’ new general debts and special debts; repaying local
government special debts; and actively defusing local governments’
debt risks.

4. The review of and supervision over the budgets of

government-managed funds shall be strengthened. The review and
supervision shall focus on the following: the compliance of the
establishment, collection, use and duration of funds with laws and
regulations; the soundness, feasibility, and sustainability of revenue
and expenditure policies and budget allocation; the use of the
government-managed funds; and the performance of
government-managed funds and their evaluation and adjustment.

5. The review of and supervision over the budgets of state capital

operations shall be strengthened. The review and supervision shall
focus on the following: the comprehensiveness of the budget and the
robustness of the budget system; the performance of duly turning in
the revenues of state capital, the proceeds from transfer of
state-owned assets, and other proceeds; the use of the expenditures
and the compliance of the projects with laws, regulations, and
policies; the transfer of funds from budgets of state capital operations
to general public budgets; the management of government
investment funds; and the improvement in the allocation of
state-owned capital and the coordination between state-owned
capital allocation and the reform of state-owned capital and
state-owned enterprises.

6. The review of and supervision over budgets for social insurance

funds shall be strengthened. The review and supervision shall focus
on the following: the arrangements in revenues and expenditures, the
financial subsidies, and the balance between the budgets for various
funds; the implementation of social security policies in budget
allocation; the facilitation of national-level unified management of
basic old-age insurance funds; the performance of funds and
operation and investments; and medium- and long-term revenue and
expenditure forecasts and sustainable operation.

7. Release of budgets and final accounts shall be promoted to increase

their transparency. The National People’s Congress and its Standing
Committee shall, on the principle of “committing to transparency
with few exceptions”, supervise the timely release of information on
the budgets and final accounts by the Central Government and its
departments, their response to issues of public concern, and
acceptance of public oversight.

II. Supervision of the central budget preparation process shall be

strengthened. The National People’s Congress and its Standing
Committee shall, in line with the principle of “creating a budget
before spending and spending in strict line with the budget”, ensure
that budgets are highly itemized and prepared ahead of schedule. The
draft central budget shall be prepared within the time frame
prescribed in the Budget Law. The central budget shall, in accordance
with the provisions of the Constitution and laws, embody state
principles, policies, decisions and plans. The policies involved in the
central budget shall be clear, the assessing criteria well-conceived, the
arrangements fair and the budget itself readable and reviewable.

The draft central general public budget shall include a statement of

budgetary revenues and expenditures, a budget statement of transfer
payments, a statement of expenditures on basic construction, and a
statement of government debt, and it shall explain the plans for
budgetary revenues and expenditures and the performance objectives
of transfer payments. The draft budgets for Central
Government-managed funds shall be itemized by funds and shall be
explained separately. In the budget of government-managed funds,
use of funds in specific projects shall be listed in the expenditure
section, and carryover and surplus funds and performance objectives
shall be explained. In the draft central budget for state capital
operations, specific industries or enterprises shall be listed in the
revenue section, with the enterprises’ overall operating and financial
conditions of the previous year stated; the field of use of funds and
the specific uses shall be listed in the expenditure section, with the
rationale for project plans and performance objectives explained. The
draft central budget for the social insurance fund shall be prepared
with reference to insurance items, reflect the progress made in
promoting national-level unified management of basic old-age
insurance, and illustrate the sustainable operation of social insurance
funds.

III. The preliminary review of the central budget shall be

strengthened and improved. The department of finance under the
State Council shall, in a timely manner, report on the preparation of
the central budget to the Financial and Economic Affairs Committee
of the National People’s Congress and the Budgetary Affairs
Commission of the Standing Committee of the National People’s
Congress. The Budgetary Affairs Commission shall take into
consideration the comments and input of deputies to the National
People’s Congress and people from all sectors of society,
communicate with the department of finance and other departments
under the State Council, and prepare analytical reports on the annual
budget. Forty-five days prior to the opening of the annual session of
the National People’s Congress, the department of finance under the
State Council shall submit the preliminary draft of the central budget
to the Financial and Economic Affairs Committee, which shall
conduct a preliminary review of the draft, deliberate on relevant key
issues and put forward preliminary review opinions.

In the preliminary review carried out by the Financial and Economic

Affairs Committee, the relevant special committees of the National
People’s Congress shall conduct targeted reviews of the preliminary
department budgets, the transfer payment funds and the policies in
relevant areas and put forward targeted review opinions based on
state principles, policies, decisions, and plans. In the targeted review
opinions, suggestions on increasing certain budgetary expenditures
shall be made simultaneously with suggestions on reducing other
budgetary expenditures so as to maintain the balance, integrity and
coherence of the budget. The targeted review opinions of the relevant
special committees shall be submitted to the Financial and Economic
Affairs Committee and the Budgetary Affairs Commission for study
and handling and shall, when necessary, be distributed as
attachments to the preliminary review opinions at the annual session
of the National People’s Congress.

IV. Supervision over the execution of the central budget shall be

strengthened. Under the leadership of the National People’s Congress
and its Standing Committee, the Financial and Economic Affairs
Committee and the Budgetary Affairs Commission shall strengthen
supervision over the implementation of the central budget. The
relevant departments under the State Council shall, in a timely
manner, submit the briefing on the implementation of the budget
resolutions of the National People’s Congress to the Financial and
Economic Affairs Committee and the Budgetary Affairs Commission.
The department of finance under the State Council shall regularly
present the budget execution statements of the whole country, the
central and local governments, with budgetary revenues and
expenditures, government debts and other relevant information
provided. The relevant departments of the State Council shall, via the
national e-government website and other platforms, regularly present
policy-related information and data on budget execution,
macroeconomics, finance, auditing, taxation, customs, social security,
and state-owned assets.

The Standing Committee of the National People’s Congress shall

strengthen supervision over the implementation of key revenue and
expenditure policies, the allocation and use of government funds in
key areas, major fiscal and tax reforms and policy adjustments, and
the implementation of major investment projects by listening to and
deliberating on special work reports, inspecting law implementation,
and carrying out investigation and research. Every August, the State
Council shall report to the Standing Committee of the National
People’s Congress on the budget execution of the year. The
department of finance under the State Council and other relevant
competent departments shall provide quarterly updates on the
execution of budgets and the implementation of relevant policies and
the progress of key projects.

The Standing Committee of the National People’s Congress shall,

with the help of modern information technology, conduct integrated
online budgetary supervision, improve the performance of budgetary
review and supervision, and make the process internet- and
IT-based. Problems identified in integrated online budgetary
supervision shall be reported to the relevant departments under the
State Council in a timely manner, and the relevant departments shall,
after verification, handle the problems and provide feedback on the
handling of the problems.

V. The review of the central budget adjustment plan shall be

strengthened. In the implementation of the central budget, the
following adjustments shall be reviewed and approved by the
Standing Committee of the National People’s Congress: any reduction
in expenditures in key areas such as agriculture, education, science
and technology, and social security; the issuance of new special
Central Government bonds; and any increase in the debts borrowed
by local governments. In the execution of the central budget, where it
is necessary to make budgetary adjustments, the State Council shall
work out a plan and submit it to the Standing Committee of the
National People’s Congress between June and October of the year,
except under special circumstances. Stringent control shall be
enforced on budgetary adjustments. Expenditures of all departments
and entities shall be carried out in accordance with their budgets.
Where adjustments in the budgets are necessary due to major issues,
they shall be made in strict accordance with the prescribed
procedures. In the execution of the central budget, the department of
finance under the State Council shall, in a timely manner, notify the
Budgetary Affairs Commission of any important policies and
measures introduced to increase fiscal revenue or expenditure, any
transfer of funds into the National Social Security Fund, or any major
changes in the structure of budgetary revenues and expenditures. The
Budgetary Affairs Commission shall inform the Financial and
Economic Affairs Committee of the relevant information in a timely
manner and, when necessary, report to the Standing Committee of
the National People’s Congress.

VI. The review of the central final accounts shall be strengthened. The
draft central final accounts shall be prepared in accordance with the
items listed in the budgets approved by the National People’s
Congress, with the budgetary figures, the adjusted budgetary figures
and the final accounts listed and important changes explained.
Expenditures in the general public budget shall be itemized by
functions with the content detailed down to third-level headings and
by economic nature detailed to second-level headings. Budgetary
expenditures of government-managed funds, state capital operations
and social insurance funds shall be itemized by functions to
third-level headings. Before the review of the draft of the central final
accounts, reports shall be made to the Standing Committee of the
National People’s Congress on specific matters subject to the accrual
accounting as stipulated by the State Council. Thirty days prior to the
Meeting of the Standing Committee of the National People’s Congress
for review and approval, the draft of the central final accounts shall
be submitted to the Financial and Economic Affairs Committee,
which shall conduct a preliminary review in light of the audit report.

VII. The review of and supervision over budget performance shall be

strengthened. All departments and entities shall carry out
comprehensive performance-based budget management, strengthen
prior performance assessment, manage performance objectives, and
improve the system of budget performance indicators and the quality
of performance evaluation. The departments and entities shall
increase the use of performance evaluation results in policy
improvement, budget allocation and management improvement,
make budget performance information more open, and present
important performance evaluation results while submitting draft
final accounts to the Standing Committee of the National People’s
Congress for review. The Standing Committee of the National
People’s Congress shall strengthen its review of and supervision over
the performance targets and evaluation results of the key
expenditures and major projects. Where necessary, it shall convene a
budget performance hearing.

VIII. The audit of and supervision over the central budget execution
and final accounts shall be strengthened. Audit institutions shall
conduct authentic, lawful, and effective audit of and supervision over
the execution of the central budget, other fiscal revenues and
expenditures, and the draft final accounts. They shall support the
Standing Committee of the National People’s Congress in its review
of and supervision over the execution of budgets and final accounts.
In June of each year, the State Council shall submit to the Standing
Committee of the National People’s Congress an audit report on the
implementation of the central budget and other revenues and
expenditures of the previous year. The audit report shall focus on the
audit of the execution of the central budget and the draft final
accounts of the previous year, the implementation of major policies,
and the performance of government funds. The audit report shall
reflect comprehensively and objectively the problems discovered in
auditing, reveal the causes of the problems, and put forward
suggestions for improvement. Problems identified in the auditing
process shall be rectified and handled lawfully. The use and impact of
audit results shall be increased, accountability be strengthened, and
the auditing and rectifying mechanism be improved, with greater
transparency in the rectification. Where necessary, the Standing
Committee of the National People’s Congress may make resolutions
on the audit report.

IX. Supervision over the rectification of problems identified in

auditing shall be strengthened. The Standing Committee of the
National People’s Congress shall conduct follow-up supervision over
the rectification of the major problems identified in the auditing
process. Supervision shall be strengthened by adopting a variety of
approaches, including listening to and deliberating on special work
reports and questioning about specific issues, to make supervision
more effective. The establishment of a sound long-term mechanism
for rectification shall be encouraged, and the budget management
system shall be improved. To bring in synergy in supervision, efforts
shall be made to strengthen the mechanism for coordinating the
National People’s Congress’ budgetary review and supervision, with
supervision based on discipline inspection and auditing, and to
improve information sharing.

In December of each year, the Standing Committee of the National

People’s Congress shall listen to and deliberate on the State Council's
report on the rectification of problems identified in auditing, and may,
when necessary, listen to individual reports on the rectification of
problems made by the departments held responsible for such
problems. Heads of these departments shall attend the meeting to
hear comments and answer questions. The rectification reports
submitted by the State Council shall correspond to the problems
revealed and suggestions put forward in the audit report, with a focus
on the rectification progress, and the detailed rectification results of
each major problem found in audits and the problems found in the
audit of the budget execution of the central departments. When
necessary, the Standing Committee of the National People’s Congress
may make resolutions on reports on the rectification.

X. The recording system shall be implemented in accordance with the

law to enhance legal liability in budgeting. The State Council shall, in
a timely manner, report the following to the Standing Committee of
the National People’s Congress for record: regulations and other
normative documents relating to budgeting; specific measures for
categorizing revenues and expenditures of the central and local
budgets, for local governments to turn over their revenues to the
Central Government, and for the Central Government to make tax
rebates and transfer payments to local governments; a compilation of
the budgets and final accounts submitted to the State Council for
record by the governments of provinces, autonomous regions and
municipalities directly under the Central Government; the
comprehensive financial report of the Central Government; and other
matters that shall be reported.

Relevant organs, departments, entities, and local governments shall,

in a timely manner, examine and address problems identified by the
Standing Committee of the National People’s Congress in its review
of and supervision over budgets and final accounts, and shall be held
legally liable for violations of the provisions of the Budget Law and
other laws. Where administrative actions need to be imposed, the
relevant working bodies of the Standing Committee of the National
People’s Congress shall notify the supervisory organs in a timely
manner.

XI. Roles of deputies to the National People’s Congress shall be given

full play to. The department of finance and other departments under
the State Council shall give thought to the comments and input of
deputies to the National People’s Congress and bear in mind their
concerns when drafting budgets, formulating policies and promoting
reforms, by holding seminars and briefings, conducting investigation
and research on specific subjects, handling proposals and suggestions,
and inviting deputies to the National People’s Congress to go on
inspection tours. The relevant special committees of the National
People’s Congress, and the relevant working bodies of its Standing
Committee shall improve communication with deputies to the
National People’s Congress and give full play to their roles. The
mechanism for engaging deputies to the National People’s Congress
in budgetary reviews shall be refined.

XII. Responsibilities of the Budgetary Affairs Commission. The

Budgetary Affairs Commission is a working body of the Standing
Committee of the National People’s Congress. It assists the Financial
and Economic Affairs Committee in fulfilling the functions of the
National People’s Congress and its Standing Committee in reviewing
budgets, final accounts, and budget adjustment plans and supervising
budget execution. It supervises the management of state-owned
assets and conducts follow-up supervision over the rectification of
major problems identified in the auditing process. It engages in the
integrated online supervision over budgets and state-owned assets.
As entrusted by the Council of Chairpersons, the Budgetary Affairs
Commission drafts relevant laws and assists the Financial and
Economic Affairs Committee in deliberating on the relevant draft
laws. It undertakes other specific tasks related to budgeting as
stipulated in this Decision, and as assigned by the Standing
Committee of the National People’s Congress and the Council of
Chairpersons, and as requested by the Financial and Economic
Affairs Committee. As agreed by the Council of Chairpersons, the
Budgetary Affairs Commission may request relevant government
departments and entities to provide budgetary information, relevant
data and explanations. With the approval of the Council of
Chairpersons, the Budgetary Affairs Commission may conduct
investigations into the use of budgetary funds and special funds of all
departments, budgetary institutions and major construction projects,
and the relevant government departments and entities shall
cooperate and provide assistance thereto.

This Decision shall come into force on the date of promulgation.