Home China Laws 2001 BUDGET LAW

BUDGET LAW

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 and promulgated by Order
No. 21 of the President of the People’s Republic of China on March 22, 1994) 

Contents 

Chapter I    General 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 

General 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 totaled 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’ 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, and 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 annulment 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 congresse