Download Country Case Study China: Towards Performance Based Budgeting

Country Case Study
China: Towards Performance
Budgeting
Performance-based Budgeting Training
Program
25 Feb to 7 Mar 2008
Singapore
Content
I. Background information and figures
II. China’s Public financial management
System and reforms in the last ten years:
A retrospect
III. What we’ve done in the area of
Performance Budgeting (PB)
IV. Challenges and issues in the way
forward
I. Background information and figures
1. China’s Five Government Tiers
2. Key figures
3. GDP Growth
4. Fiscal revenue and expenditure
1. China’s Five Government Tiers
 Tier 1: Central government




(1)
Tier 2: Province (22), Autonomous Region for
Minority Nationalities (5), Municipality under
direct control of central government (4),
Special Administrative Region (3)
(34)
Tier 3: Prefecture
(333)
Tier 4:County
(2860)
Tier 5: Townships
(41040 )
2. Key figures
 GDP – RMB 21.09 trillion in 2006,
registering an annual growth rate of
10.7%
 Fiscal revenue –RMB 3.87 trillion
 Fiscal expenditure – RMB 4.04 trillion
 Fiscal revenue/expenditure as a
percentage of GDP 18%
3. GDP Growth (1978-2005)
GDP growth (1978-2005)
200000
150000
100000
50000
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
0
GDP
4. Fiscal revenue and expenditure
Fiscal Revenue and Expenditure (1978-2005)
19
78
19
85
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
40000
35000
30000
25000
20000
15000
10000
5000
0
Revenue
Expenditure
II. China’s Public financial management
System and reforms in the last ten
years: A retrospect
 1. Major reforms of PFM
 2. Achievements of these reforms
 3. Further reform options
1. Major reforms of PFM
 Department budget reform
 Treasury Single Account reform
 Government procurement reform
 Government revenue/expenditure classification
reform
2. Achievements of these reforms
 Budget Preparation: more complete, more
accurate, more reasonable
 Budget Implementation: more efficient and
effective
 Budget Information: more transparent
3. Further reform options
 Extending coverage of TSA
 New budget classification and chart of accounts
 Improve cash management functions
 Expand coverage of fiscal and quasi-fiscal
operations in the budget.
 Keep track of subnational borrowing
III. What we’ve done in the area of
Performance Budgeting
 1. At the central level
 2. At sub-national levels
1. At the central level
 Only project performance evaluation
 Progresses of this reform in recent years
 Clarification of target
 Institutional improvements
 Pilot expansion
2. At sub-national levels
 Result-oriented reforms in many sub-
national governments
 --budget
 --government organization change
 --expenditure supervision
IV. Challenges and issues in the
way forward
 1. Challenges
 2. Next steps
1. Challenges
 The perception of result-oriented is still not




so popular
The institutions of budgeting need to be
improved further
Weak connection between five-year
planning and strategic outcomes
How to design performance indicators is still
a problem
Only a few projects in some departments
2. Next steps
 Mindset
 Deepening budget management reforms
 Link planning and budgeting
 Mid-term departmental plan
 Expansion of pilots
 Improvement of mechanism
Thank you!
For more information, please visit:
www.mof.gov.cn
P.R. C Group
Performance-based Budgeting Training Program