The National People’s Congress

Order of the President of the People’s Republic of China

No.21

The 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, is promulgated now, and shall enter into force as of January 1, 1995.

President of the People’s Republic of China Jiang Zemin

March 22, 1994

Budget Law of the People’s Republic of China ContentsChapter I Genaral provisions

Chapter II Functions and Powers for Budget Management

Chapter III Scope of Budgetary Revenues and Expenditures

Chapter IV Budget Compilation

Chapter V Examination and Approval of Budgets

Chapter VI Budget Implementation

Chapter VII Budget Adjustment

Chapter VIII Final Accounts

Chapter IX Supervision

Chapter X Legal Responsibility

Chapter XI Supplementary Provisions

Chapter I Genaral provisions

Article 1

This Law is formulated in accordance with the Constitution with a view to strengthening the distribution and supervisory function
of budget, improving the budget management of the State, intensifying the macroscopic regulation and control of the State, and ensuring
the sound development of economy and society.

Article 2

The State shall establish budget at each level of the government, namely, at the five levels: the Central Government; the provinces,
autonomous regions and municipalities directly under the Central Government; the cities divided into districts and autonomous prefectures;
the counties, autonomous counties, cities not divided into districts, and municipal districts; the townships, nationality townships
and towns.

Townships, nationality townships and towns where conditions do not permit the establishment of budget, subject to the determination
by the people’s governments of the respective provinces, autonomous regions or municipalities directly under the Central Government,
may temporarily not establish budget.

Article 3

Budget at various levels shall maintain a balance between revenues and expenditures.

Article 4

The budget of the Central Government (hereinafter simplified as the central budget) consists of the budgets of its different departments
(including the units directly under them, similarly hereinafter).

The central budget includes revenues turned over by the local governments to the Central Government and revenues refunded or subsidies
granted by the Central Government to the local governments.

Article 5

The local budget consists of the general budgets of the various provinces, autonomous regions and municipalities directly under the
Central Government.

A local general budget at any level consists of the budget of the government at the corresponding level (hereinafter simplified as
budget at the corresponding level) and the totalized general budget at the next lower level. Where the next lower level has only
the budget of the government at the corresponding level, the totalized general budget at the next lower level means the budget of
the government at the corresponding level. In the absence of the budget at the next lower level, the general budget means the budget
of the government at the corresponding level.

The budget of a local government at any level consists of the budgets of the various departments at the corresponding level (including
the units directly under them, similarly hereinafter).

The budget of a local government at any level includes revenues turned over by the governments at lower levels and revenues refunded
or subsidies granted by the governments at higher levels.

Article 6

The budget of a department consists of the budgets of the units subordinate to it.

Article 7

The budget of a unit refers to the budget for revenues and expenditures of a State organ, social organization or any other unit which
is listed in the budget of a department.

Article 8

The State practises a system of tax division between the Central and local governments.

Article 9

The budget approved by the people’s congress at the corresponding level shall not be altered without going through the procedures
prescribed by law.

Article 10

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

Article 11

The budgetary revenues and expenditures take Renminbi yuan as the calculating unit.

Chapter II Functions and Powers for Budget Management

Article 12

The National People’s Congress examines the central and local draft budgets and the reports on the implementation of the central and
local budgets, approves the central budget and the report on the implementation of the central budget and alters or annuls inappropriate
resolutions made by the Standing Committee of the National People’s Congress on budget and final accounts.

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

Article 13

A local people’s congress at or above the county level examines the draft general budget at the corresponding level and the report
on the implementation of the general budget, approves the budget and the report on its implementation at the corresponding level,
alters or annuls inappropriate resolutions made by the standing committee of the people’s congress at the corresponding level on
budget or final accounts and annuls inappropriate decisions and orders made by the government at the corresponding level on budget
or final accounts.

The standing committee of a local people’s congress at or above the county level supervises the implementation of the general budget
at the corresponding level, examines and approves the adjustment plan for the budget at the corresponding level, examines and approves
the final accounts of the government at the corresponding level (hereinafter simplified as the final accounts at the corresponding
level), and annuls inappropriate decisions, orders and resolutions made by the government at the corresponding level or by the people’s
congress at the next lower level and its standing committee on budget or final accounts.

The people’s congress of a township, nationality township or town which has established budget examines and approves the budget at
the corresponding level and the report on the implementation of the budget at the corresponding level, supervises the implementation
of the budget at the corresponding level, examines and approves the adjustment plan for the budget at the corresponding level, examines
and approves the final accounts at the corresponding level, and annuls inappropriate decisions and orders made by the government
at the corresponding level on budget or final accounts.

Article 14

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

Article 15

A local government at or above the county level compiles the draft budget and draft final accounts at the corresponding level, makes
report on the draft general budget at the corresponding level to the people’s congress at the corresponding level, submits for the
record the totalized general budget submitted by the next lower level to the standing committee of the people’s congress at the corresponding
level for the record, organizes the implementation of the general budget at the corresponding level, makes decisions to draw on reserve
funds of the budget at the corresponding level, works out the adjustment plan for the budget at the corresponding level, supervises
the budget implementation by the departments at the corresponding level and by the government at the next lower level, alters or
annuls inappropriate decisions and orders made by the departments at the corresponding levels and the government at the next lower
level on budget or final accounts, and makes report to the people’s congress at the corresponding level or its standing committee
on the implementation of the general budget at the corresponding level.

The government of a township, nationality township or town compiles the draft budget and draft final accounts at the corresponding
levels, makes report to the people’s congress at the corresponding level on the draft budget, organizes the implementation of the
budget at the corresponding level, makes decisions to draw on reserve funds of the budget at the corresponding level, works out the
adjustment plan for the budget at the corresponding level, and makes report to the people’s congress at the corresponding level on
the implementation of the budget at the corresponding level.

Article 16

The financial department under the State Council compiles the specific draft of the central budget and draft of the final accounts,
practically organizes the implementation of the central and local budgets, puts forward proposals for drawing on reserve funds of
the central budget, works out the specific adjustment plan for the central budget, and regularly reports to the State Council on
the implementation of the central and local budgets.

The financial department of a local government at any level compiles the specific drafts of budget and final accounts at the corresponding
level, practically organizes the implementation of the general budget at the corresponding level, puts forward proposals for drawing
on reserve funds of the budget 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 implementation of the general budget at the corresponding level.

Article 17

The various departments compile the drafts of their own budgets and final accounts, organize and supervise the budget implementation
by their own departments, and regularly report to the financial departments of the governments at the corresponding levels on their
budget implementation.

Article 18

The various units compile the drafts of their own budgets and final accounts, turn over budgetary revenues as prescribed by the State,
manage the budgetary expenditures, and accept supervision of the relevant departments of the State.

Chapter III Scope of Budgetary Revenues and Expenditures

Article 19

A budget consists of budgetary revenues and budgetary expenditures.

The budgetary revenues include:

(1)

tax receipts;

(2)

receipts from the State-owned assets that should be turned over in accordance with relevant regulations;

(3)

receipts from special items; and

(4)

receipts from other sources.

The budgetary expenditures include:

(1)

expenditure for economic construction;

(2)

expenditure for the development of undertakings in education, science, culture, public health and physical culture;

(3)

the administrative expenditure of the State;

(4)

expenditure for national defence;

(5)

expenditure for various subsidies; and

(6)

other expenditures.

Article 20

The budgetary revenues are divided into the central budgetary revenues, the local budgetary revenues and the budgetary revenues shared
by the central and local governments.

The budgetary expenditures are divided into the central budgetary expenditures and the local budgetary expenditures.

Article 21

Specific measures for the division of items for revenue and expenditure between the central budget and the local budget, the turning-over
of revenues by the local governments to the Central Government and the refundment of revenues or the grant of subsidies by the Central
Government to the 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 22

The budgetary revenues shall be used in a manner of overall consideration and arrangement. The establishment of any fund for a specific
purpose, where really necessary, shall be subject to the approval by the State Council.

Article 23

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

Chapter IV Budget Compilation

Article 24

The governments, departments and units at various levels shall compile their respective draft budgets within the period of time prescribed
by the State Council.

Article 25

The central budget and the budgets of local governments at various levels shall be compiled with reference to the actual implementation
of the previous year’s budget and to the estimation of the current year’s revenues and expenditures.

Article 26

The central budget and the budgets of local governments at various levels shall be compiled according to the dual budget system.

Measures for the compilation of the dual budget system and rules for the implementation thereof shall be formulated by the State Council.

Article 27

The public budget of the Central Government shall not contain deficit.

Partial funds for construction investment indispensable to the central budget may be raised in form of domestic and foreign loans,
provided that loans shall be in a rational scale and structure.

The funds needed for the servicing of the debts already raised in the central budget shall be managed in accordance with the provisions
of the preceding paragraph.

Article 28

The local budgets at various levels shall be compiled according to the principles of keeping expenditures within the limits of revenues
and maintaining a balance between revenues and expenditures, and shall not contain deficit.

The local governments may not issue local government bonds, except as otherwise prescribed by laws or the State Council.

Article 29

The compilation of the budgetary revenues at various levels shall be in keeping with the growth rate of the gross national product.

Revenues which must be listed in the budget in accordance with relevant regulations, may not be concealed or incompletely listed,
and the abnormal receipts in the previous year may not be taken as the basis for the compilation of the budgetary revenues.

Article 30

The guiding principle of practising strict economy and building up the country through thrift and hard work shall be followed in compiling
the budgetary expenditures at various levels.

The budgetary expenditures at various levels shall be compiled by making overall plans and taking all factors into consideration while
securing priorities; and budgetary expenditures for various purposes shall be properly arranged under the precondition that the reasonable
requirements of government public expenditures be secured.

Article 31

Necessary funds shall be arranged in the central and relevant local budgets to assist the developing areas such as areas of regional
national autonomy, old revolutionary bases and outlying and poverty- stricken areas, in developing undertakings of economy and culture.

Article 32

Reserve funds in government budgets at various levels shall be established at a ratio of 1% to 3% of the budgetary expenditures at
the corresponding level for coping with the relief for natural calamities and other unexpected expenditures in the implementation
of the current year’s budgets.

Article 33

Budgetary circulating funds shall be established in government budgets at various levels as prescribed by the State Council.

Article 34

The balance of the previous year’s government budget at any level may be used in the next year for the expenditure of the previous
year’s carry-over projects; any surplus thereof may be used as a supplement to the budgetary circulating funds; any further surplus
may be used as budgetary expenditures essential to the next year.

Article 35

The State Council shall give timely instructions regarding the compilation of the next year’s draft budgets.

The concrete matters relating to the compilation of draft budgets shall be arranged by the financial department under the State Council.

Article 36

The governments of the provinces, autonomous regions and municipalities directly under the Central Government shall, within the period
of time defined by the State Council, submit the general draft budgets at the corresponding levels to the State Council for examination,
verification and totalization.

Article 37

The financial department under the State Council shall, one month before the annual session of the National People’s Congress, submit
the main contents of the draft central budget to the Financial and Economic Committee of the National People’s Congress for preliminary
examination.

The financial departments under the governments of the provinces, autonomous regions, municipalities directly under the Central Government,
cities divided into districts or autonomous prefectures shall, one month before the sessions of the people’s congresses at the corresponding
levels, submit the main contents of the draft budgets at the corresponding levels for preliminary examination to the relevant special
committees of the people’s congresses at the corresponding levels, or to the relevant working committees of the standing committees
of the people’s congresses at the corresponding levels in accordance with the decisions made by the councils of chairmen of the standing
committees of the people’s congresses at the corresponding levels.

The financial departments under the governments of the counties, autonomous counties, cities not divided into districts or municipal
districts shall, one month before the sessions of the people’s congresses at the corresponding levels, submit the main contents of
the draft budgets at the corresponding levels for preliminary examination to the standing committees of the people’s congresses at
the corresponding levels.

Chapter V Examination and Approval of Budgets

Article 38

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

The local governments at various levels shall, when the people’s congresses at the corresponding levels are in session, make reports
to the congresses on their respective draft total budgets.

Article 39

The central budget shall be examined and approved by the National People’s Congress.

The budgets of the local governments at various levels shall be examined and approved by the people’s congresses at the corresponding
levels.

Article 40

The government of a township, nationality township or 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 without delay its budget approved by the people’s congress at the corresponding level and the totalized budget submitted
for the record by the government 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 totalizing the budgets submitted for the record by the governments at
the next lower level in accordance with the provisions of the preceding paragraph, report the totalized budgets to the standing committee
of the people’s congress at the corresponding level for the record. The State Council shall, after totalizing the budgets submitted
for the record by the governments of the provinces, autonomous regions and municipalities directly under the Central Government in
accordance with the provisions of the preceding paragraph, submit the totalized budgets to the Standing Committee of the National
People’s Congress for the record.

Article 41

In case the State Council or a local government at or above the county level judges that the budget submitted for the record by the
government at the next lower level in accordance with the provisions of Article 40 of this Law, contravenes laws or administrative
rules and regulations, or contains other inappropriatenesses, and that the resolution approving the budget has to be cancelled, the
said government shall submit the matter to the standing committee of the people’s congress at the corresponding level for deliberation
and decision.

Article 42

After the approval of the budgets of the governments at various levels by the people’s congresses at the corresponding levels, the
financial departments of the governments at the corresponding levels shall without delay give an official written reply regarding
their budgets to the departments at the corresponding levels. The departments at various levels shall without delay give an official
written reply regarding their budgets to their subordinate units.

Chapter VI Budget Implementation

Article 43

The implementation of the budgets of governments at various levels shall be organized by the governments at the corresponding levels,
and the financial departments of the governments at the corresponding levels shall be in charge of the concrete work.

Article 44

After the beginning of a budgetary year and before the approval of the draft budgets of the governments at various levels by the people’s
congresses at the corresponding levels, the governments at the corresponding levels may first arrange their expenditures according
to the amount of the budgetary expenditures in the corresponding period of the previous year. Upon the approval of the respective
budgets by the people’s congresses at the corresponding levels, the approved budgets shall be implemented.

Article 45

The departments responsible for collecting budgetary revenues must, in accordance with the provisions of the laws or administrative
rules and 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 the laws or administrative rules and regulations, carry out unauthorized reduction of, or exemption from collection
of budgetary revenues that ought to be collected or postpone the collection thereof, and may not intercept, detain or misappropriate
the budgetary revenues.

Article 46

The departments or units which have the obligation to turn over budgetary revenues must, in accordance with the laws, administrative
rules and regulations and the provisions of the financial department under the State Council, turn over in time and in full amount
the budgetary funds that ought to be turned over to the State Treasury (hereinafter simplified as the Treasury), and may not intercept,
detain, misappropriate or default the turnover.

Article 47

The financial departments of the governments at various levels must, in accordance with the laws, administrative rules and regulations
and the provisions 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 the budgetary expenditures.

The expenditures of the governments, departments and units at various levels must comply with their respective budgets.

Article 48

The Treasury must be established in any budget at or above the county level; it shall also be established for any township, nationality
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 provisions of the State Council.

The Treasuries at various levels must, in accordance with the relevant provisions of the State, manage promptly and accurately the
collection, allocation, retainment and turnover of the budgetary revenues, and the appropriation of the budgetary expenditures.

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

The governments at various levels shall strengthen the management of and supervision over the Treasuries at the corresponding levels.

Article 49

The governments at various levels shall strengthen the leadership over the budget implementation, support the budgetary-revenue collecting
departments such as the financial departments, taxation and customs authorities to arrange budgetary revenues according to law and
support the financial departments to strictly manage budgetary expenditures.

The financial departments, taxation and customs authorities shall in the course of budget implementation strengthen the analysis of
the budget implementation and shall, whenever discovering any problems, promptly suggest that the governments at the corresponding
levels adopt measures to settle them.

Article 50

Departments or units shall strengthen the management of the budgetary revenues and expenditures, and may not intercept or draw on
the budgetary revenues which ought to be turned over, nor treat any non- budgetary expenditures as budgetary expenditures.

Article 51

The plan to draw on the budget reserve funds of a government 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 a decision.

Article 52

The budgetary circulating funds of the governments at various levels shall be managed by the financial departments of the governments
at the corresponding levels, and shall be used for the fund-circulating purpose in budget implementation, and may not be diverted
to any other use.

Chapter VII Budget Adjustment

Article 53

Budget adjustment refers to any partial alteration of the central budget already approved by the National People’s Congress or of
the local budgets at the various levels already approved by the local people’s congresses at the corresponding levels, which is made
due to expenditure increase or revenue reduction necessitated by special circumstances in the implementation of the respective budget,
thus making total expenditures exceed total revenues in the original approved balanced budget or making an increase of the debts
to be borrowed as compared with the original approved budgets.

Article 54

The governments at various levels shall, with regard to indispensable budget adjustments, work out plans for budget adjustments. The
adjustment plan of the central budget must be submitted to the Standing Committee of the National People’s Congress for examination
and approval. The budget adjustment plans of the local governments at or above the county level must be submitted to the standing
committees of the people’s congresses at the corresponding levels for examination and approval. The budget adjustment plans of the
governments of townships, nationality townships or towns must be submitted to the people’s congresses at the corresponding levels
for examination and approval. No budget adjustment shall be made without due approval.

Article 55

In case budget adjustments are not approved, the governments at various levels shall not make any decisions making total expenditures
exceed total revenues in the original approved balanced budgets or making an increase of the debts to be borrowed as compared with
the original approved budget.

In case 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 the governments at higher levels shall order a change or annullment of the
decision.

Article 56

Changes in budgetary revenues and expenditures caused by funds returned or subsidies granted by governments at higher levels in the
course of budget implementation shall not be regarded as budget adjustments. The local governments at or above the county level shall,
on receipt of returned funds or subsidies, report the relevant situations to the standing committees of the people’s congresses at
the corresponding levels. The governments of townships, nationality townships or towns shall, on receipt of returned funds or subsidies,
report the relevant situations to the people’s congresses at the corresponding levels.

Article 57

The budgetary expenditures of a department or unit shall be implemented according to the budget items. Any necessary transfer of budgetary
funds under different budget items must be reported for approval in accordance with the provisions of the department of finance under
the State Council.

Article 58

After the budget adjustment plan of a local government at any level has been approved, the government at the corresponding level shall
report such plan to the government at the next higher level for the record.

Chapter VIII Final Accounts

Article 59

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

The concrete matters concerning the compilation of the draft final accounts shall be arranged by the department of finance under the
State Council.

Article 60

The compilation of the draft final accounts must conform to the laws and administrative rules and regulations and ensure the accuracy
in accounting revenues and expenditures, the completeness of the contents and the prompt submission.

Article 61

A department shall examine, verify and totalize the draft final accounts of all units subordinate to it and then compile draft final
accounts of its own and shall, within the prescribed time limit, submit such draft to the financial department of the government
at the corresponding level for examination and verification.

The financial department of a government at any level shall, in examining and verifying the draft final accounts of all departments
at the corresponding level, have the power to correct any inconformity with the provisions of t