Budget Law of the People’s Republic of China

(Adopted at the Second Session of the Eighth National People's Congress on March 22, 1994; amended for the first time in accordance with the Decision of the Standing Committee of the National People's Congress on Amending the Budget Law of the People's Republic of China at the 10th Meeting of the Standing Committee of the Twelfth National People's Congress on August 31, 2014; and amended for the second time in accordance with the Decision on Amending the Law of the People's Republic of China on Product Quality and Other Four Laws at the 7th Meeting of the Standing Committee of the Thirteenth National People's Congress on December 29, 2018)

Contents

Chapter I  General Provisions
Chapter II  Functions and Powers for Budget Management
Chapter III  Scope of Budgetary Revenues and Expenditures
Chapter IV  Budget Preparation
Chapter V  Review and Approval of Budgets
Chapter VI  Budget Execution
Chapter VII  Budget Adjustment
Chapter VIII  Final Accounts
Chapter IX  Supervision
Chapter X  Legal Liability
Chapter XI  Supplementary Provisions

Chapter I  General Provisions

Article 1  This Law is enacted in accordance with the Constitution with a view to regulating government behaviors related to revenues and expenditures, intensifying the budget constraint, strengthening management and supervision of budgets, establishing and improving a comprehensive, standardized, open and transparent budget system, and ensuring sound economic and social development.

Article 2  The preparation, review, approval and supervision of budgets and final accounts as well as the execution and adjustment of budgets are governed by this Law.

Article 3  The state establishes budgets at each level of the government, namely, at five levels: the central level; the level of provinces, autonomous regions and municipalities directly under the Central Government; the level of cities divided into districts and autonomous prefectures; the level of counties, autonomous counties, cities not divided into districts, and municipal districts; and the level of townships, ethnic townships and towns.

The national budget consists of the central budget and local budgets. The local budgets consist of the overall budgets of all provinces, autonomous regions and municipalities directly under the Central Government.

An overall budget at any local level consists of the budget at the corresponding level and the consolidated overall budgets at the next lower level. Where a budget at the next lower level has no lower-level budget to be included, the overall budget at the next lower level means solely the budget at the next lower level. In the absence of the budget at the next lower level, the overall budget means solely the budget at the corresponding level.

Article 4  A budget shall consist of budgetary revenues and budgetary expenditures.

All revenues and expenditures of a government shall be included in the budget.

Article 5 A budget shall include the general public budget, the budget of government-managed funds, the budget of state capital operations and the budget of social insurance funds.

The general public budget, the budget of government-managed funds, the budget of state capital operations and the budget of social insurance funds shall be complete and independent. The budget of government-managed funds, the budget of state capital operations and the budget of social insurance funds shall be coordinated with the general public budget.

Article 6  A general public budget is the budget whereby the fiscal revenues with taxes as the main source are arranged for guaranteeing and improving people's well-being, promoting economic and social development, safeguarding national security, maintaining the normal functioning of state institutions, and for other aspects.

The central general public budget includes the budgets of various departments at the central level (including entities directly affiliated thereto) and the budgets for tax rebates and transfer payments from the Central Government to local governments.

The revenues in the central general public budget include the revenues at the central level and those turned over by local governments to the Central Government. The expenditures in the central general public budget include the expenditures at the central level as well as tax rebates and transfer payments from the Central Government to local governments.

Article 7  A local general public budget at any level includes the budgets of various departments at the corresponding level (including entities directly affiliated thereto) as well as their budgets for tax rebates and transfer payments.

The revenues in a local general public budget at any level include the revenues at the corresponding level, the tax rebates and transfer payments from the government at a higher level to the government at the corresponding level, and the revenues turned over by governments at lower levels. The expenditures of a local general public budget at any level include the expenditures at the corresponding level, the expenditures turned over to the government at a higher level as well as the tax rebates and transfer payments to governments at lower levels.

Article 8  The budget of a department consists of the budgets of the department and the entities subordinate to it.

Article 9  A budget of government-managed funds is the budget whereby the funds levied, collected or otherwise raised from specific parties within a specific period of time in accordance with laws and administrative regulations are used specifically for the development of specific public utilities.

A budget of government-managed funds shall be prepared by fund programs based on the revenues and actual expenditure demand of the fund programs and ensure expenditures are determined by revenues.

Article 10  A budget of state capital operations is the budget whereby the expenditure arrangement is made for state capital gains.

A budget of state capital operations shall be prepared according to the principle of the balance between revenues and expenditures, shall not contain deficits and shall arrange for the transfer of funds to a general public budget.

Article 11  A budget of social insurance funds is the budget for revenues and expenditures whereby the funds made from social insurance payments, arranged by a general public budget and raised in other methods are used specifically for social insurance.

A budget of social insurance funds shall be prepared respectively according to the level of overall planning and programs of social insurance and ensure the balance between revenues and expenditures.

Article 12  Budgets at various levels shall be based on principles of making overall plans and taking all factors into consideration, practicing economy and thrift, being realistic, emphasizing performance, and maintaining a balance between revenues and expenditures.

Governments at various levels shall maintain a multi-year budgeting balance mechanism.

Article 13  The budgets approved by the people's congresses shall not be adjusted without going through the statutory procedures. The expenditures of governments at various levels, all departments and all entities shall be based on the approved budgets and any expenditure not listed in the budgets is not allowed.

Article 14  The reports and statements on the budget, budget adjustments, final accounts and the execution of the budget approved by a people's congress or its standing committee at the corresponding level shall be made public by the financial department of the government at the corresponding level within 20 days after the approval, and explanations shall be made regarding the transfer payments arrangement of the government at the corresponding level, the implementation thereof, debts, and other important matters.

The budget, final accounts and their statements of a department which are approved by the financial department of the government at the corresponding level shall be made public by the department within 20 days after the approval, and explanations shall be made regarding important matters including the arrangement and use of the department operating expenses in the budget and final accounts of the department.

Governments at various levels, all departments and all entities shall make public information on government procurement in a timely manner.

Any of the matters stated in the preceding three paragraphs shall not be made public if state secrets are involved.

Article 15  The state practices a system of tax division between the Central Government and local governments.

Article 16  The state implements the financial transfer payment system. The financial transfer payment shall be standardized, fair and open, and mainly aimed at promoting equitable access to interregional basic public services.

Financial transfer payments include the transfer payments from the Central Government to local governments and from local governments at higher levels to local governments at lower levels, with the main part being the general transfer payments used by governments at lower levels in a manner of overall consideration and arrangement for balancing interregional basic financial resources.

Special transfer payments may be established in accordance with laws and administrative regulations and the regulations of the State Council for handling specific matters. A regular assessment and exit mechanism shall be established and improved for special transfer payments. No special transfer payments may be established for any matter that can be adjusted effectively through the market competition mechanism.

In making arrangements for special transfer payments, governments at higher levels shall not require governments at lower levels to cover supporting funds, except for the matters for which governments at higher levels and governments at lower levels are required to be jointly responsible according to the regulations of the State Council.

Article 17  The mechanism of mutual constraints and coordination shall be established and improved for the preparation and execution of budgets at various levels.

Article 18  A budgetary year begins on January 1 and ends on December 31 according to the Gregorian calendar.

Article 19  Budgetary revenues and expenditures take Renminbi yuan as the calculating unit.

Chapter II Functions and Powers for Budget Management

Article 20  The National People's Congress reviews the draft central and local budgets and the report on the execution of the central and local budgets, approves the central budget and the report on the execution of the central budget, and alters or annuls inappropriate resolutions made by the Standing Committee of the National People's Congress on the budget and final accounts.

The Standing Committee of the National People's Congress supervises the execution of the central and local budgets, reviews and approves the adjustment plan for the central budget, reviews and approves the final accounts of the Central Government, annuls administrative regulations, decisions, and orders of the State Council on the budget or final accounts which contravene the Constitution or laws, and annuls local regulations or resolutions on budgets or final accounts made by the people's congresses of the provinces, autonomous regions or municipalities directly under the Central Government or by their standing committees which contravene the Constitution, laws or administrative regulations.

Article 21  A local people's congress at or above the county level reviews the draft overall budget at the corresponding level and the report on the execution of the overall budget, approves the budget and the report on its execution at the corresponding level, alters or annuls inappropriate resolutions on the budget or final accounts made by the standing committee of the people's congress at the corresponding level, and annuls inappropriate decisions and orders on the budget or final accounts made by the government at the corresponding level.

The standing committee of a local people's congress at or above the county level supervises the execution of the overall budget at the corresponding level, reviews and approves the adjustment plan for the budget at the corresponding level, reviews and approves the final accounts at the corresponding level, and annuls inappropriate decisions, orders and resolutions on the budget or final accounts made by the government at the corresponding level or by the people's congresses and their standing committees at the next lower level.

The people's congress of a township, ethnic township or town reviews and approves the budget and the report on the execution of the budget at the corresponding level, supervises the execution of the budget at the corresponding level, reviews and approves the adjustment plan for the budget at the corresponding level, reviews and approves the final accounts at the corresponding level, and annuls inappropriate decisions and orders on the budget or final accounts made by the government at the corresponding level.

Article 22  The Financial and Economic Affairs Committee of the National People's Congress shall conduct a preliminary review of the preliminary plan of the draft central budget, the execution of the budget for the previous year, the preliminary plan of the adjustments to the central budget and the draft of the central final accounts, and come up with preliminary review opinions.

The relevant special committee of the people's congress of a province, an autonomous region or a municipality directly under the Central Government shall conduct a preliminary review of the preliminary plan of the draft budget at the corresponding level, the execution of the budget for the previous year, the preliminary plan of the adjustments to the budget at the corresponding level and the draft final accounts at the corresponding level, and come up with preliminary review opinions.

The relevant special committee of the people's congress of a city divided into districts or autonomous prefecture shall conduct a preliminary review of the preliminary plan of the draft budget at the corresponding level, the execution of the budget for the previous year, the preliminary plan of the adjustments to the budget at the corresponding level and the draft final accounts at the corresponding level, and come up with preliminary review opinions. In the absence of a special committee, the relevant working body of the standing committee of the people's congress at the corresponding level shall conduct research and come up with relevant opinions.

The standing committee of the people's congress of a county, an autonomous county, a city not divided into districts or a municipal district shall conduct a preliminary review of the preliminary plan of the draft budget at the corresponding level and the execution of the budget for the previous year, and come up with preliminary review opinions. The relevant working body of the standing committee of the people's congress of a county, an autonomous county, a city not divided into districts or a municipal district shall conduct research on the preliminary plan of the adjustments to the budget at the corresponding level and the draft final accounts at the corresponding level, and come up with relevant opinions.

When the special committees of the people's congresses or the relevant working bodies of the standing committees of the people's congresses at or above the level of cities divided into districts and autonomous prefectures conduct preliminary reviews or research to come up with relevant opinions, they shall invite the delegates to the people's congresses at corresponding levels to participate.

The financial department of the government at the corresponding level shall provide feedback in a timely manner on the matters handled in response to the opinions given in accordance with the first paragraph through the fourth paragraph of this Article.

The opinions given in accordance with the first paragraph through the fourth paragraph of this Article and the feedback reports of the financial department of the government at the corresponding level shall be printed and distributed to the delegates to the people's congress at the corresponding level.

The Standing Committee of the National People's Congress and the relevant working bodies of the standing committees of the people's congresses of provinces, autonomous regions, municipalities directly under the Central Government, cities divided into districts, and autonomous prefectures shall, in accordance with the decisions of the standing committee of the people's congress at the corresponding level, assist the financial and economic affairs committees or relevant special committees of the people's congresses at the corresponding levels with the specific work in connection with the review of the draft budget, budget adjustment plan, and draft of final accounts, the supervision of the execution of budgets and other relevant work.

Article 23  The State Council prepares the drafts of the central budget and final accounts, makes a report to the National People's Congress on the drafts of the central and local budgets, submits for the record to the Standing Committee of the National People's Congress reports on the aggregated budgets submitted for the record by governments of provinces, autonomous regions and municipalities directly under the Central Government, organizes the execution of the central and local budgets, makes decisions to draw on the central reserve funds, works out the adjustment plan for the central budget, supervises the execution of budgets of the departments at the central level and of local governments, alters or annuls inappropriate decisions and orders on budgets or final accounts made by the departments at the central level or by local governments, and makes a report to the National People's Congress or its Standing Committee on the execution of the central and local budgets.

Article 24   A local government at or above the county level prepares the draft budget and draft final accounts at the corresponding level, makes a report on the draft overall budget at the corresponding level to the people's congress at the corresponding level, submits for the record the aggregated budgets submitted by the governments at the next lower level to the standing committee of the people's congress at the corresponding level, organizes the execution of the overall budget at the corresponding level, makes decisions to draw on reserve funds at the corresponding level, works out the adjustment plan for the budget at the corresponding level, supervises the budget execution by departments at the corresponding level and by governments at lower levels, alters or annuls inappropriate decisions and orders on the budget or final accounts made by departments at the corresponding level and governments at lower levels, and makes a report to the people's congress at the corresponding level and its standing committee on the execution of the overall budget at the corresponding level.

The government of a township, ethnic township or town prepares the draft budget and draft final accounts at the corresponding level, makes a report to the people's congress at the corresponding level on the draft budget, organizes the execution of the budget at the corresponding level, makes decisions to draw on reserve funds at the corresponding level, works out the adjustment plan for the budget at the corresponding level, and makes a report to the people's congress at the corresponding level on the execution of the budget at the corresponding level.

Upon approval by the government of a province, an autonomous region or a municipality directly under the Central Government, the draft of the budget, budget adjustment plan and draft of final accounts of the government of a township, an ethnic township or a town can be prepared by the government at the next higher level and submitted to the people's congress of the township, ethnic township or town for review and approval in accordance with Article 21 of this Law.

Article 25  The financial department under the State Council prepares the specific draft of the central budget and draft of the central final accounts, is responsible for specific work of organizing the execution of the central and local budgets, puts forward proposals for drawing on central reserve funds, works out the specific adjustment plan for the central budget, and regularly reports to the State Council on the execution of the central and local budgets.

The financial department of a local government at any level prepares the specific drafts of the budget and final accounts at the corresponding level, is responsible for the specific work of organizing the execution of the overall budget at the corresponding level, puts forward proposals for drawing on reserve funds at the corresponding level, works out the specific adjustment plan for the budget at the corresponding level, and regularly reports to the government at the corresponding level and the financial department of the government at the next higher level on the execution of the overall budget at the corresponding level.

Article 26  Departments shall prepare the drafts of their own budgets and final accounts, organize and supervise the budget execution by their own departments, and regularly report to the financial departments of governments at corresponding levels on their budget execution.

Entities shall prepare the drafts of their own budgets and final accounts, turn in budgetary revenues and arrange budgetary expenditures in accordance with state regulations, and accept supervision from the relevant departments of the state.

Chapter III  Scope of Budgetary Revenues and Expenditures

Article 27  Revenues in a general public budget shall consist of various tax receipts, administrative charges, revenues from the paid use of state-owned resources (assets), transfer income and other incomes.

Expenditures in a general public budget shall, according to the classification by their functions, include expenditures for general public services, expenditures for foreign affairs and for public security as well as national defense, expenditures for agriculture and environmental protection, expenditures for education, science, culture, public health and sports, expenditures for social security and employment and other expenditures.

Expenditures in a general public budget shall, according to the classification by their economic nature, include expenditures for wages and welfare, expenditures for commodities and services, capital expenditures and other expenditures.

Article 28  The scope of revenues and expenditures in a budget of government-managed funds, budget of state capital operations and budget of social insurance funds shall be subject to laws, administrative regulations and regulations of the State Council.

Article 29  Specific measures for the categorization for revenues and expenditures of the central budget and local budgets, the turning-over of revenues by local governments to the Central Government and the tax rebates or transfer payments by the Central Government to local governments shall be prescribed by the State Council and reported to the Standing Committee of the National People's Congress for the record.

Article 30  No government at a higher level may allocate, beyond its budget, any budgetary funds of a government at a lower level. No government at a lower level may use or retain budgetary funds belonging to a government at a higher level.

Chapter IV  Budget Preparation

Article 31   The State Council shall give timely notices regarding the preparation of the next year's draft budgets. The concrete matters relating to the preparation of draft budgets shall be arranged by the financial department under the State Council.

Governments, departments and entities at various levels shall prepare their respective draft budgets within the period of time prescribed by the State Council.

Article 32  Budgets at various levels shall, after the opinions of all parties concerned are consulted according to prescribed procedures, be prepared based on the annual economic and social development objectives, the overall requirements of macro control and the demand for a multi-year budgetary balance, the execution of the budgets, the appraisal results of relevant expenditure performance of the previous year, as well as the prediction of revenues and expenditures for the current year.

Where a government at any level, based on its statutory authority, makes any decision or formulates any administrative measure that involves the increase or reduction of fiscal revenues or expenditures, the same shall be proposed prior to the approval of the budget and appropriate arrangements shall be made therefor in the draft budget.

All departments and entities shall prepare their respective draft budgets in accordance with the classification of government revenues and expenditures, budgetary expenditure standards and requirements, regulations on performance target management and other regulations on budget preparation formulated by the financial department under the State Council; and also in light of the needs of their performance of functions in accordance with the law and the development of undertakings as well as the stock assets.

Regarding the classification of government revenues and expenditures in the preceding paragraph, revenues are listed by class, section, item, and sub-item, and expenditures are listed, according to their functions, by class, section and item and, according to their economic nature, by class and section.

Article 33  Governments of provinces, autonomous regions and municipalities directly under the Central Government shall, within the period of time prescribed by the State Council, submit the draft overall budgets at corresponding levels to the State Council for review, verification and consolidation.

 Article 34   Certain funds indispensable to the central general public budget may be raised in the form of domestic and foreign loans, provided that the scale and structure of the loans are appropriate.

The balance management shall apply to the loans raised in the central general public budget and the scale of the balance shall not exceed the limit approved by the National People's Congress.

The financial department under the State Council shall be responsible for the unified management of the Central Government debts.

Article 35   Local budgets at various levels shall be prepared according to the principles of planning expenditures based on revenues and maintaining a balance between revenues and expenditures, and shall not contain deficits except otherwise prescribed in this Law.

Certain funds for construction investment indispensable to the budget of a province, an autonomous region or a municipality directly under the Central Government as approved by the State Council may be raised by issuing local government bonds and the scale of the debts so raised shall be reported by the State Council to the National People's Congress or its Standing Committee for approval. The debts raised by a province, an autonomous region or a municipality directly under the Central Government with the limit provided by the State Council shall be included in the budget adjustment plan at the corresponding level and submitted to the standing committee of the people's congress at the corresponding level for approval. There shall be a repayment plan and stable sources of funds for the repayment of the debts so raised, and such debts can only be used for capital expenditures for public welfare and cannot be used for recurrent expenditures.

Except for those prescribed in the preceding paragraph, neither a local government nor any department subordinate to it may raise debts in any form.

Unless otherwise prescribed in laws, neither a local government nor any department subordinate to it may provide a guarantee for the debts of any entity or individual in any form.

The State Council shall establish the risk evaluation and pre-warning mechanism, emergency disposal mechanism, and accountability system for local government debts. The financial department under the State Council shall supervise local government debts.

Article 36   The preparation of budgetary revenues at various levels shall be adapted to the level of economic and social development and be compatible with financial policies.

All government revenues shall be listed in the budgets by governments at various levels, all departments and all entities in accordance with the provisions of this Law and may not be concealed or incompletely listed.

Article 37  Budgetary expenditures at various levels shall be classified based on their functions and economic nature in accordance with the provisions of this Law.

Budgetary expenditures at various levels shall be prepared by following the principle of practicing economy and thrift with strict control over the expenditures for operating expenses, the construction of office buildings and other capital construction expenditures of each department and entity.

Expenditures in general public budgets at various levels shall be prepared by making overall plans and taking all factors into consideration with a prioritized arrangement of the expenditures for key projects on the precondition that reasonable requirements of basic public services are secured.

Article 38   General transfer payments shall be prepared according to the basic standards and calculation methods prescribed by the State Council. Special transfer payments shall be prepared by regions and categories.

Governments at or above the county level shall release to governments at lower levels in advance the estimated amount of the transfer payments to the governments at lower levels.

Local governments at various levels shall include the estimated amount of the transfer payments released in advance by governments at higher levels into the budgets at corresponding levels.

Article 39  Necessary funds shall be arranged in the central and relevant local budgets to assist the old revolutionary base areas, areas with large ethnic minority populations, border areas and poverty-stricken areas in undertakings of economic and social development.

Article 40   Reserve funds in general public budgets at various levels shall be established at a ratio of 1% to 3% of general public budgetary expenditures at corresponding levels, which will be used for the expenses increased in dealing with natural calamities and other emergencies as well as unexpected expenditures in the execution of current year's budgets.

Article 41   Budgetary revolving funds may be established in general public budgets at various levels as prescribed by the State Council for filling the gap between the seasonable revenues and expenditures by governments at the corresponding levels within the budgetary year.

Budgetary stabilization funds may be established in general public budgets at various levels for making up for the deficiency of budgetary funds in the following years.

Article 42   Carryover funds of the previous year's budget of the government at any level shall be used in the next year for the expenditure of carryover categories; carryover funds unused for two consecutive years shall be managed as surplus funds.

Carryover funds or surplus funds of the previous year's budget of any department or entity shall be handled in accordance with relevant regulations of the financial department under the State Council.

Chapter V  Review and Approval of Budgets

Article 43   The central budget shall be reviewed and approved by the National People's Congress.

Local budgets at various levels shall be reviewed and approved by the people's congresses at corresponding levels.

Article 44    The financial department under the State Council shall, 45 days before the annual session of the National People's Congress, submit the preliminary plan of the draft central budget to the Financial and Economic Affairs Committee of the National People's Congress for a preliminary review.

The financial department of the government of a province, an autonomous region, or a municipality directly under the Central Government shall, 30 days before the session of the people's congress at the corresponding level, submit the preliminary plan of the draft budget at the corresponding level to the relevant special committee of the people's congress at the corresponding level for a preliminary review.

The financial department of the government of a city divided into districts or an autonomous prefecture shall, 30 days before the session of the people' congress at the corresponding level, submit the preliminary plan of the draft budget at the corresponding level to the relevant special committee of the people's congress at the corresponding level for a preliminary review, or to the relevant working body of the standing committee of the people's congress at the corresponding level for opinions.

The government of a county, an autonomous county, a city not divided into districts or a municipal district shall, 30 days before the session of the people's congress at the corresponding level, submit the preliminary plan of the draft budget at the corresponding level to the standing committee of the people's congress at the corresponding level for a preliminary review.

Article 45   The people's congress of a county, an autonomous county, a city not divided into districts, a municipal district, a township, an ethnic township or a town shall adopt various forms to organize the deputies to the people's congress at the corresponding level to heed opinions from voters and all sectors of society before holding a session to review the draft budget.

Article 46   The draft budgets submitted to the people's congresses for review and approval at various levels shall be detailed. Expenditures in a general public budget at the corresponding level shall be prepared and classified by their functions down to items and basic expenditures shall be prepared and classified by their economic nature down to sections. Expenditures in a budget for government-managed funds, a budget for state capital operations and a budget for social insurance funds shall be prepared and classified by their functions down to items.

Article 47  The State Council shall, when the National People's Congress is in session, make a report to the National People’s Congress on the draft central and local budgets and the execution of the central and local budgets.

Local governments at various levels shall, when the people's congresses at corresponding levels are in session, make reports to the people’s congresses on their respective draft overall budgets and the execution of the overall budgets.

Article 48   The National People's Congress or a local people's congress shall review a draft budget and the report thereon as well as the report on the execution of the budget with a focus on the following:

(1) whether or not the execution of the previous year's budget meets the requirements of the budget resolution of the people's congress at the corresponding level;

(2) whether or not the budget arrangement complies with this Law;

(3) whether or not the budget arrangement is an implementation of the principles and policies on national economic and social development and whether or not the revenue-expenditure policies are practical;

(4) whether or not the budget arrangement for major expenditures and major investment projects is appropriate;

(5) whether or not the budget is complete and complies with the provisions of Article 46 of this Law;

(6) whether or not the budget for transfer expenditures to the government at a lower level is regulated and appropriate;

(7) whether or not the debts raised under the budget arrangement are lawful and rational and whether or not there is a repayment plan and stable sources of funds for repayment of the debts; and

(8) whether or not the explanations for the important matters relating to the budget are clear.

Article 49  The Financial and Economic Affairs Committee of the National People's Congress shall submit a report on the review results of the drafts of central and local budgets and the execution of central and local budgets to the Presidium of the National People's Congress.

The relevant special committee of a province, an autonomous region, a municipality directly under the Central Government, a city divided into districts, or an autonomous prefecture or the standing committee of the people's congress of a county, an autonomous county, a city not divided into districts or a municipal district shall submit a report on the review results of the draft overall budget and the execution of the previous year's overall budget to the presidium of the people's congress at the corresponding level.

The report on review results shall include the following particulars:

(1) appraisal of the execution of the previous year's budget and the budget resolution of the people's congress at the corresponding level;

(2) appraisal of whether or not the current year's draft budget complies with the provisions of this Law or whether or not it is practical;

(3) the suggestion on the approval of the draft budget and budget report by the people's congress at the corresponding level; and

(4) opinions and proposals on the execution of the annual budget, improvement of the management and performance of the budget, strengthening of supervision over budget and other relevant matters.

Article 50   The government of a township, an ethnic township or a town shall report without delay its budget approved by the people's congress at the corresponding level to the government at the next higher level for the record. A local government at or above the county level shall report in a timely manner its budget approved by the people's congress at the corresponding level and the aggregated budgets submitted for the record by governments at the next lower level to the government at the next higher level for the record.

A local government at or above the county level shall, after aggregating the budgets submitted for the record by governments at the next lower level in accordance with the provisions of the preceding paragraph, report the aggregated budgets to the standing committee of the people's congress at the corresponding level for the record. The State Council shall, after aggregating the budgets submitted for the record by governments of provinces, autonomous regions and municipalities directly under the Central Government in accordance with the provisions of the preceding paragraph, submit the aggregated budgets to the Standing Committee of the National People's Congress for the record.

Article 51   Where the State Council or a local government at or above the county level judges that a budget submitted for the record by a government at the next lower level in accordance with the provisions of Article 50 of this Law, contravenes laws or administrative regulations, or contains other inappropriateness, and that the resolution approving the budget has to be canceled, the State Council or the local government shall submit the matter to the standing committee of the people's congress at the corresponding level for deliberation and decision.

Article 52   After a budget of a government at any level is approved by the people's congress at the corresponding level, the financial department of the government at the corresponding level shall give replies of budget approval to all departments at the corresponding level within 20 days. The departments shall each give replies of budget approval to the entities subordinate to it within 15 days after receiving the budget approval from the financial department at the corresponding level.

The general transfer payments from the Central Government to local governments shall be officially released within 30 days after the approval of the budget by the National People's Congress. The special transfer payments from the Central Government to local governments shall be officially released within 90 days after the approval of the budget by the National People's Congress.

The government of a province, an autonomous region or a municipality directly under the Central Government shall officially release the general transfer payments and special transfer payments to governments at or above the county level within the corresponding administrative region within 30 days after receiving such payments from the Central Government.

The general transfer payments and special transfer payments to governments at lower levels as arranged in a local budget at or above the county level shall be released within 30 days and 60 days respectively after the approval of the budget by the people's congress at the corresponding level.

The transfer payments to be used for dealing with natural calamities and other emergencies in a budget shall be released in a timely manner; for the transfer payments for a special project where the settlement is based on actual costs, etc., payments may be released in installments or may be advanced before settlement.

The financial department of a government at or above the county level shall send copies of the approved budgets of the departments at the corresponding level and the approved budget for the transfer payments to governments at lower levels to the financial and economic affairs committee, the relevant special committee and the relevant working body of the standing committee of the people's congress at the corresponding level.

Chapter VI  Budget Execution

Article 53   The execution of budgets of governments at various levels shall be organized by governments at corresponding levels, and the financial departments of governments at corresponding levels shall be in charge of the specific work.

Each department or entity is the subject executing the budget of the department or entity, and shall be responsible for the budget execution and the results of the execution.

Article 54   After the beginning of a budgetary year and before the approval of the draft budgets at various levels by the people's congresses at corresponding levels, arrangements can be made for the following expenditures:

(1) carryover expenditures from the previous year;

(2) basic department expenditures, project expenditures and transfer payments to governments at lower levels for the current year that must be paid based on the budgetary expenditure for the corresponding period of the previous year; and

(3) the expenditures for which payment obligations must be performed as required by the law and the expenditures for dealing with natural calamities and other emergencies.

The report on a draft budget shall include an explanation of the expenditure arrangements in the preceding paragraph.

Upon the approval of respective budgets by the people's congresses at corresponding levels, the approved budgets shall be executed.

Article 55   Departments or entities responsible for collecting budgetary revenues must, in accordance with the provisions of laws or administrative regulations, collect in time and in full amount the budgetary revenues that ought to be collected, and may not, in violation of the provisions of laws or administrative regulations, overcollect, collect in advance, undercollect, or exempt or postpone the collection of the budgetary revenues that ought to be collected, and may not retain, misappropriate or divert budgetary revenues.

None of the governments at various levels may issue any revenue target to any department or entity collecting budgetary revenues.

Article 56    All government revenues shall be turned over to the State Treasuries (hereinafter simplified as the Treasuries) and no department, entity or individual may retain,  misappropriate, divert or default the turnover.

Special fiscal accounts may be established for special funds provided by law or approved by the State Council.

Article 57   Financial departments of governments at various levels must, in accordance with laws, administrative regulations and the regulations of the financial department under the State Council, allocate in time and in full amount the funds for budgetary expenditures and strengthen the management of and supervision over budgetary expenditures.

Expenditures of governments at various levels, all departments and all entities must comply with their respective budgets and false disbursement is not allowed.

Governments at various levels, all departments and all entities shall carry out the performance evaluation of budgetary expenditures.

Article 58    Cash accounting shall apply to revenues and expenditures of budgets at various levels.

In the event of special matters to which accrual accounting is applied in accordance with the regulations of the State Council, the relevant matters shall be reported to the standing committee of the people's congress at the corresponding level.

Article 59   The Treasuries must be established at or above the county level for budgets; the Treasury shall also be established for any township, ethnic township or town where conditions permit.

The business of the Central Treasury shall be managed by the People's Bank of China and the business of the local Treasuries shall be managed in accordance with the relevant regulations of the State Council.

The Treasuries at various levels must, in accordance with the relevant regulations of the state, manage the collection, allocation, retention and refund of budgetary revenues, and the appropriation of budgetary expenditures in a timely manner and accurately.

The power to dispose of funds from the Treasuries at various levels is vested in the financial departments of governments at corresponding levels. Except as otherwise provided for by laws or administrative regulations, no departments, entities or individuals shall, without the consent of the financial departments of governments at corresponding levels, have the right to freeze or draw on funds from the Treasuries or dispose of the funds already put in the Treasuries in any other form.

Governments at various levels shall strengthen the management of and supervision over the Treasuries at corresponding levels, improve the cash management of the Treasuries in accordance with the regulations of the State Council and rationally adjust the balance of funds in the Treasuries.

Article 60   Where any fund already paid to the Treasuries needs to be refunded in accordance with the provisions of laws or administrative regulations or decisions of the State Council, the financial departments of governments at various levels or their authorized institutions shall conduct the refund in a timely manner. Any matter that falls within fiscal expenditures according to relevant regulations shall not be handled through a refund from the Treasuries.

Article 61   The state adopts the Treasuries centralized collection and payment system and applies the Treasuries centralized collection and payment administration to all government revenues and expenditures.

Article 62   Governments at various levels shall strengthen the leadership over the budget execution, support budgetary-revenue collecting departments such as the financial, taxation and customs departments to arrange budgetary revenues according to law and support financial departments to strictly manage budgetary expenditures.

Financial, taxation and customs departments shall, in the budget execution, strengthen the analysis of the budget execution and shall, whenever discovering any problem, suggest in a timely manner that governments at corresponding levels adopt measures to settle them.

Article 63   All departments and entities shall strengthen the management of budgetary revenues and expenditures, and may not retain or draw on budgetary revenues that ought to be turned over, nor change the intended use of budgetary expenditures without authorization.

Article 64    A plan to draw on reserve funds at any level shall be made by the financial department of the government at the corresponding level and be submitted to the government at the corresponding level for decision.

Article 65    Budgetary revolving funds at various levels shall be managed by the financial departments of the governments at corresponding levels, and may not be diverted to any other use.

Article 66    Where there is any extra revenue in the annual execution of general public budgets at various levels, such revenues may only be used for offsetting deficits or supplementing budget stabilization funds.

The surplus funds of general public budgets at various levels shall be used for supplementing budget stabilization funds.

Where there is any revenue deficit in the annual execution of the general public budget of a province, an autonomous region or a municipality directly under the Central Government, and a revenue-expenditure balance cannot be achieved by transfer of budget stabilization funds, cutting of spending or any other means, the government of the province, autonomous region or municipality directly under the Central Government may, upon approval by the people's congress at the corresponding level or the standing committee thereof, increase the budget deficit which shall be reported to the financial department under the State Council for the record, and shall make up for such deficit in the next year's budget.

Chapter VII  Budget Adjustment

Article 67     The central budget already approved by the National People's Congress or local budgets at various levels already approved by the local people's congresses at corresponding levels shall be adjusted if any of the following circumstances occurs in the execution of respective budgets:

(1) where it is necessary to increase or reduce total budgetary expenditures;

(2) where it is necessary to transfer budget stabilization funds;

(3) where it is necessary to reduce the amount of key expenditures arranged in a budget; or

(4) where it is necessary to increase the amount of the debts to be raised.

Article 68     During the budget execution, governments at various levels shall generally neither formulate any new policy or measure for increasing government revenues or expenditures nor formulate any policy or measure for reducing government revenues. If the increase or reduction is necessary and the budget adjustment is indispensable, a relevant arrangement shall be made in a budget adjustment plan.

Article 69     Governments at various levels shall, with regard to indispensable budget adjustments, work out plans for budget adjustments. The plans for budget adjustments shall state the reasons for the adjustments and the categories and amount to be adjusted.

Where, during the budget execution, it is necessary to increase budgetary expenditures due to the occurrence of natural calamities or any other emergency, reserve funds shall first be used. If reserve funds cannot cover the spending, governments at various levels may make arrangements for the spending and then list the spending in the plans for budget adjustments if it falls within the budget adjustments.

The financial department under the State Council shall submit a preliminary plan for budget adjustments to the Financial and Economic Affairs Committee of the National People's Congress for a preliminary review 30 days before the Standing Committee of the National People's Congress holds a meeting for review and approval of the plan for budget adjustments.

The financial department of the government of a province, an autonomous region or a municipality directly under the Central Government shall submit a preliminary plan for budget adjustments to the relevant special committee of the people's congress at the corresponding level for a preliminary review 30 days before the standing committee of the people's congress at the corresponding level holds a meeting for review and approval of the plan for budget adjustments.

The financial department of the government of a city divided into districts or an autonomous prefecture shall submit a preliminary plan for budget adjustments for a preliminary review to the relevant special committee or for comments to the relevant working body of the standing committee of the people's congress at the corresponding level 30 days before the standing committee of the people's congress at the corresponding level holds a meeting for review and approval of the plan for budget adjustments.

The financial department of the government of a county, an autonomous county, a city not divided into districts or a municipal district shall submit a preliminary plan for budget adjustments to the relevant working body of the standing committee of the people's congress at the corresponding level for comments 30 days before the standing committee of the people's congress at the corresponding level holds a meeting for review and approval of the plan for budget adjustments.

An adjustment plan of the central budget shall be submitted to the Standing Committee of the National People's Congress for review and approval. The adjustment plans of local budgets at or above the county level shall be submitted to the standing committees of the people's congresses at corresponding levels for review and approval. The adjustment plans of the budgets of townships, ethnic townships or towns shall be submitted to the people's congresses at corresponding levels for review and approval. No budget adjustment shall be made without due approval.

Article 70     Governments at various levels shall strictly implement the plans for budget adjustments already approved and shall not make any decision on budget adjustments without going through the procedures specified in Article 69 hereof.

Where a decision is made in violation of the provisions of the preceding paragraph, the people's congress or the standing committee of the people's congress at the corresponding level or governments at higher levels shall order a change or annulment of the decision.

Article 71     Changes in budgetary expenditures due to an increase of special transfer payments by the government at a higher level that do not require the government at the corresponding level to provide supporting funds in the budget execution shall not be regarded as budget adjustments.

Local governments at or above the county level shall, on receiving the increased special transfer payments, report the relevant information to the standing committees of the people's congresses at corresponding levels. The governments of townships, ethnic townships or towns shall, on receiving the increased special transfer funds, report the relevant information to the people's congresses at corresponding levels.

Article 72     Budgetary expenditures of a department or an entity shall be executed according to the classification of budgets. Transfer of budgetary funds among different budgetary classes, levels or categories shall be strictly controlled, and any necessary transfer shall be handled in accordance with the provisions of the financial department under the State Council.

Article 73     After a local budget adjustment plan at any level is approved, the government at the corresponding level shall report the plan to the government at the next higher level for the record.

Chapter VIII  Final Accounts

Article 74    Draft final accounts shall be prepared by governments at various levels, and various departments and entities in accordance with the schedule prescribed by the State Council at the end of each budgetary year.

The specific matters concerning the preparation of the draft final accounts shall be arranged by the financial department under the State Council.

Article 75     The preparation of draft final accounts must conform to laws and administrative regulations and ensure the authenticity of revenues and expenditures, the accuracy of the amount, the completeness of the contents and the timely submission.

Draft final accounts shall correspond to budgets, and budgeted figures, adjusted budgeted figures and final settlement figures shall be listed separately. The expenditures of general public budgets shall be classified by their functions down to items and classified by their economic nature down to sections.

Article 76   A department shall examine, verify and aggregate the draft final accounts of all entities subordinate to it and then prepare draft final accounts of its own and shall, within the prescribed time limit, submit such drafts to the financial department of the government at the corresponding level for review and verification.

The financial department of a government at any level shall, in reviewing and verifying the drafts of final accounts of all departments at the corresponding level, have the power to correct nonconformity with the provisions of laws and administrative regulations.

Article 77     The financial department under the State Council shall prepare the draft of the central final accounts, and submit the draft, after being audited by the audit department under the State Council, to the State Council for review and decision, and then the State Council shall submit it to the Standing Committee of the National People's Congress for review and approval.

The financial department of a local government at or above the county level shall prepare the draft final accounts at the corresponding level and submit the draft, after the draft is audited by the audit department of the government at the corresponding level, to the government at the corresponding level for review and decision, and the government at the corresponding level shall submit it to the standing committee of the people's congress at the corresponding level for review and approval.

The government of a township, an ethnic township or a town shall prepare the draft final accounts at the corresponding level and submit the draft to the people's congress at the corresponding level for review and approval.

Article 78     The financial department under the State Council shall submit the draft of central final accounts for the previous year to the Financial and Economic Affairs Committee of the National People's Congress for a preliminary review 30 days before the Standing Committee of the National People's Congress holds a meeting for review and approval of the draft of central final accounts.

The financial department of the government of a province, an autonomous region or a municipality directly under the Central Government shall submit the draft of final accounts at the corresponding level for the previous year to the relevant special committee of the people's congress at the corresponding level for a preliminary review 30 days before the standing committee of the people's congress at the corresponding level holds a meeting for review and approval of the draft of final accounts at the corresponding level.

The financial department of the government of a city divided into districts or an autonomous prefecture shall submit the draft of final accounts at the corresponding level for the previous year for a preliminary review to the relevant special committee or for opinions to the relevant working body of the standing committee of the people's congress at the corresponding level 30 days before the standing committee of the people's congress at the corresponding level holds a meeting for review and approval of the draft final accounts at the corresponding level.

The financial department of the government of a county, an autonomous county, a city not divided into districts, or a municipal district shall submit the draft of final accounts at the corresponding level for the previous year to the relevant working body of the standing committee of the people's congress at the corresponding level for opinions 30 days before the standing committee of the people's congress at the corresponding level holds a meeting for review and approval of the draft final accounts at the corresponding level.

The Financial and Economic Affairs Committee of the National People's Congress and the relevant special committees of the people's congresses of provinces, autonomous regions, municipalities directly under the Central Government, cities divided into districts and autonomous prefectures shall submit the reports on review results of the drafts of final accounts at corresponding levels to the standing committees of the people's congresses at corresponding levels.

Article 79     The standing committee of a people's congress at or above the county level or the people's congress of a prefecture, an ethnic prefecture or a town shall review a draft of final accounts at the corresponding level mainly in terms of the following:

(1) budgetary revenues;

(2) implementation of policies on expenditures as well as the use and performance of major expenditures and the funds for major investment projects;

(3) use of carryover funds;

(4) surplus of funds;

(5) adjustments to and execution of the budgets at the corresponding level;

(6) execution of the arrangement of financial transfer payments;

(7) size, structure, use, repayment, etc. of the debts raised as approved;

(8) size and use of budgetary revolving funds at the corresponding level;

(9) use of reserve funds at the corresponding level;

(10) arrangement for extra revenue and the size and use of budgetary stabilization funds;

(11) implementation of the budget resolutions approved by the people's congress at the corresponding level; and

(12) other important information relating to final accounts.

The standing committee of a people's congress at or above the county level shall review the draft of final accounts at the corresponding level in light of the audit reports on the execution of the previous year's budget and other fiscal revenues and expenditures submitted by the government at the corresponding level.

Article 80     After the final accounts at any level are approved, the relevant financial department shall, within 20 days, give a reply of approving the final accounts to all departments at the corresponding level. Each department shall, within 15 days after receiving the budget approved by the financial department at the corresponding level, give a reply of approving the final accounts to the entities subordinate to it.

Article 81     A local government at any level shall report its approved final accounts and the aggregated final accounts submitted by governments at the next lower level for the record to the government at the next higher level for the record.

Each government at or above the county level shall submit the aggregated final accounts submitted by governments at the next lower level for the record to the standing committee of the people's congress at the corresponding level for the record.

Article 82    Where the State Council or a government at or above the county level judges that the final accounts submitted for the record by a government at the next lower level in accordance with the provisions of Article 81 of this Law contravene laws or administrative regulations or contain other inappropriateness and the resolution approving the final accounts has to be canceled, the State Council or the local government at or above the county level shall submit the matter to the standing committee of the people's congress at the corresponding level for deliberation and decision; if a decision is made on the cancellation of the resolution after deliberation, the standing committee of the people's congress at the lower level shall instruct the government at the corresponding level to reprepare the draft final accounts in accordance with the provisions of this Law, and then submit the draft to the standing committee of the people's congress at the corresponding level for review and approval.

Chapter IX  Supervision

Article 83    The National People's Congress and its Standing Committee exercise supervision over the central and local budgets and final accounts.

A local people's congress at or above the county level and its standing committee exercise supervision over the budget and final accounts at the corresponding and lower levels.

The people's congress of a township, an ethnic township or a town exercises supervision over the budget and final accounts at the corresponding level.

Article 84    A people's congress at any level and the standing committee of the people's congress at or above the county level have the power to conduct investigations of major issues or specific issues concerning the budget or final accounts; governments, departments, entities or individuals concerned shall truthfully report the situations and provide necessary materials.

Article 85    When the people's congresses at various levels and the standing committees of the people's congresses at or above the county level are in session, deputies to the people's congresses or component members of the standing committees may, in accordance with the procedures prescribed by law, question or inquire the relevant governments or financial departments concerning the budgets or final accounts, and the latter must answer the questions or inquiries in a timely manner.

Article 86     The State Council and local governments at or above the county level shall each, during the period between June and September each year, make reports on the budget execution to the standing committee of the people's congress at the corresponding level.

Article 87    A government at any level shall supervise the budget execution by governments at lower levels; a government at a lower level shall regularly make reports on the budget execution to the government at the next higher level.

Article 88     The financial department of a government at any level shall be responsible for supervision over the budget management by all departments at the corresponding level and their subordinate entities, and shall make reports on the budget execution to the government at the corresponding level and the financial department of the government at the next higher level.

Article 89     The audit department of a government at or above the county level shall exercise auditing supervision over the budget execution and final accounts.

The audit reports on the budget execution and other government revenues and expenditures shall be made public.

Article 90     All government departments shall be responsible for supervision over and inspection of the budget execution of their respective subordinate entities, make reports on their budget execution to the financial department of the government at the corresponding level in a timely manner and rectify any budget-related violation of laws in accordance with the law.

Article 91     Citizens, legal persons or other organizations may file reports or complaints on violations of this Law they have discovered to relevant state organs in accordance with the law.

The state organs that accept such reports or complaints shall handle them in accordance with the law and keep those filing the reports or complaints confidential. No entity or individual may suppress or retaliate against any violation reporter or complainant.

Chapter X  Legal Liability

Article 92     Where a government at any level or relevant department thereof is involved in any of the following behaviors, it shall be ordered to make correction, and the directly responsible persons in charge and other directly responsible persons shall be investigated for administrative liability:

(1) failing to prepare or submit a draft budget, plan for budget adjustments, draft final accounts, or department budget or final accounts or to give a reply approving a budget or final accounts in accordance with this Law;

(2) making budget adjustments in violation of this Law;

(3) failing to make public or give explanations about relevant budget matters in accordance with this Law;

(4) establishing government-managed funds categories or other government revenue categories in violation of relevant regulations;

(5) using reserve funds, budgetary revolving funds, budget stabilization funds or extra revenues in violation of laws or administrative regulations; or

(6) establishing special fiscal accounts in violation of this Law.

Article 93  Where a government at any level or relevant department thereof or a relevant entity is involved in any of the following behaviors, it shall be ordered to make corrections, and the directly responsible persons in charge and other direct responsible persons shall be given a sanction of demotion, dismissal or expulsion from office in accordance with the law:

(1) failing to make a statement of all government revenues and expenditures in the budget or making a false statement of revenues or expenditures;

(2) in violation of the provisions of laws or administrative regulations, overcollecting, collecting in advance, undercollecting, or exempting or postponing the collection of budgetary revenues that ought to be collected;

(3) retaining, misappropriating, diverting or defaulting in paying the budgetary revenues that ought to be turned over to the Treasuries;

(4) changing the intended use of budgetary expenditures in violation of this Law;

(5) changing the intended use of the special transfer payments from the government at a higher level without authorization; and

(6) in violation of this Law, allocating the funds for budgetary expenditures, handling the collection, allocation, retention and refund of budgetary revenues, or freezing or drawing on funds of the Treasuries or otherwise disposing of the funds already turned over to the Treasuries.

Article 94    Where a government at any level, a department or an entity, in violation of this Law, raises debts, provides a guarantee for another's debts, diverts the funds for major expenditures or constructs office buildings not included in the budget or in excess of the budgetary standards, it shall be ordered to make corrections, and the directly responsible persons in charge and other directly responsible persons shall be given a sanction of demotion, dismissal or expulsion from office.

Article 95  Any relevant department of governments at various levels or any entity or staff member thereof involved in any of the following behaviors shall be ordered to make rectification and the funds defrauded or used shall be recovered and the illegal gains, if any, confiscated. Such department or entity shall be subject to a warning or circulation of a notice of criticism. The directly responsible persons in charge and other directly responsible persons shall be given a sanction:

(1) altering the method for turning over budgetary revenues in violation of laws or regulations;

(2) defaulting on budgetary funds by means such as making false applications or claims;

(3) expanding the scope of expenditures or increasing the standards for expenditures in violation of relevant regulations; or

(4) other behaviors in violation of regulations on fiscal administration.

Article 96     Where the handling or punishment of the violations of laws set out in Articles 92, 93, 94 and 95 are otherwise provided for in any other law, the provisions of such other laws shall prevail.

Any violation of this Law that constitutes a crime shall be subject to criminal liability.

Chapter XI  Supplementary Provisions

Article 97     The financial department of a government at any level shall prepare the annual consolidated financial report of the government with the accrual method of accounting as the basis. The report shall contain the overall financial status, operation and medium and long term financial sustainability and shall be submitted to the standing committee of the people's congress at the corresponding level for the record.

Article 98    The State Council shall, in accordance with this Law, formulate rules for its implementation.

Article 99    The management of budgets in ethnic autonomous areas shall comply with the relevant provisions of the Law on Regional Ethnic Autonomy; in the absence of such stipulations in the Law on Regional Ethnic Autonomy, the relevant provisions of this Law and relevant regulations of the State Council shall apply.

Article 100  The people's congress or its standing committee of a province, an autonomous region or a municipality directly under the Central Government may formulate the decisions or local regulations regarding budget review and supervision in accordance with this Law.

Article 101    This Law shall go into effect on January 1, 1995. The Regulations on the Management of State Budget, issued on October 21, 1991 by the State Council shall be simultaneously repealed.