This year's Government Work Report proposes to strengthen scientific management of finance, deepen zero based budget reform, and further expand the pilot scope of central departments. For a long time, China's budget preparation has mainly followed the "base+growth" model, with moderate growth based on the previous year's budget revenue and expenditure of departments. Zero based budgeting takes zero as the basis point, re evaluating the necessity, rationality, and priority of all expenditure items, and optimizing fund allocation based on performance. In 2024, the Decision of the Third Plenary Session of the 20th Central Committee of the Communist Party of China explicitly proposed to deepen the reform of zero based budgeting. When preparing the 2025 budget, the central government selected 16 central departments, including the Ministry of Finance and the Ministry of Ecology and Environment, to carry out zero based budget reform pilot projects. In the preparation of the 2026 budget, the reform scope was steadily expanded, and 32 new pilot departments were added. All budget items were reviewed from scratch. Local finance departments are also promoting zero based budget reform, continuously innovating key systems such as expenditure standards and performance evaluation. From the central to the local level, work together to promote the deepening of zero based budget reform. At the local two sessions in early 2026, each province released its zero based budget reform report card and new plan. Anhui Province's zero based budget reform is at the forefront of the country. In April 2025, the 2.0 version of the zero based budget reform will be officially launched, expanding the reform from the fields of industry and science and technology innovation to education, healthcare, elderly care, and other livelihood areas. It will also extend from general public budgets to government funds and state-owned capital operating budgets, and dynamically compile a list of provincial-level key guarantee items. In 2026, Anhui Province will continue to deepen the three in one reform of "zero budget+performance management+cost control", covering the "full life cycle" of fund projects with performance management. By 2025, Shandong Province will establish a budget mechanism with "zero as the starting point, project as the foundation, financial resources as the upper limit, and classification guarantee as the core". The provincial level will implement a "last place elimination system" based on performance evaluation, and eliminate more than 800 inefficient projects, reducing funds by over 4 billion yuan. In 2026, Shandong Province will continue to deepen the pilot project of cost budget performance management, improve the dynamic adjustment mechanism of expenditure standards, and strengthen the application of intelligent technology in budget management. Shanxi Province will embed the management rules for "three public" funds into an integrated system, and use backend monitoring, warning, and correction to eliminate expenditures without budget or exceeding budget; Jiangsu Province will establish a sound financial capacity assessment mechanism and promote the deep integration of zero based budgeting with digitalization and performance management; Heilongjiang Province is promoting the expansion of zero based budget reform from the field of science and technology to a larger scale, guiding budget departments to establish a project management mechanism that can "enter and exit, increase and decrease"... In 2026, various regions will take stricter and more practical measures to deepen zero based budget reform. The zero based budget reform is deepening from 'breaking the base' to 'three-dimensional system'. ”Li Xuhong, Vice President of the Beijing National Institute of Accounting, stated that from the practice in various regions, zero based budgeting has innovated from the technical level of preparation methods and risen to an important lever for improving the government's resource allocation ability and modern fiscal governance level. The government is able to achieve precise activation of existing funds and strong guarantees in key areas under tight fiscal balance, truly promoting the transformation of government performance ability towards intensive and efficient. Reconstruct the allocation logic and allocate funds accurately to ensure people's livelihoods and innovate the development of meat and vegetable combinations, balanced nutrition, and hot meals on the table. Zhu Zhengxing, a villager from Taipingzhu Village, Yongchang Street, Lanxi City, Zhejiang Province, said, "I am the only one at home, with a senior canteen and staff delivering meals to my doorstep. I feel very at ease." In 2025, under the promotion of the zero based budget reform in Zhejiang Province, Lanxi City will implement a five level budget, which is strict and efficient. We will support the construction of the Shanleitang Health and Wellness Center and the "One Elderly and One Primary" complex, providing integrated services of "healthy elderly care+medical diagnosis and treatment", and introduce a third-party professional team to carry out home services such as "basic meals+ordering meals", providing daily assistance. The number of meals reached 15000. Now when preparing a budget, first look at which level the project belongs to and how much benefit it can generate. Only when the account is carefully calculated can the money be spent wisely. ”The relevant person in charge of the Finance Bureau of Lanxi City stated that through the precise screening of the five level budget, the saved funds can be concentrated and directed towards the urgent needs of people's livelihood and development shortcomings. By 2025, local education, healthcare, and other livelihood expenditures will account for 84.5% of the general public budget expenditure, with particularly typical changes in investment in elderly care services. Jilin Province will deepen the zero based budget reform, with a year-on-year decrease of 10% in provincial department project expenditure budget by 2025, and a reduction of 11% and 19% in public funds and general expenditures, respectively. The saved funds will be prioritized for supporting scientific and technological innovation and assisting disadvantaged groups; In 2026, we will vigorously reduce general expenditures and inefficient and ineffective expenditures, and increase stable support for industrial innovation and people's livelihood security through the coordinated financial resources of provinces and cities. The Ministry of Finance stated that in 2026, we will actively use the zero based budget concept to vigorously reduce inefficient and ineffective expenditures, allocate more fiscal funds to boost consumption, invest in people, and ensure people's livelihood, and increase residents' income through multiple channels. Practice has shown that zero based budget reform is not simply about cutting expenditures, but about seeking benefits from existing resources and space from low efficiency. ”Li Xuhong believes that restructuring the budget allocation logic and accurately directing the reduced funds towards livelihood security and innovative development areas not only preserves the people's "wallets", but also enhances the momentum of economic development, achieving an organic unity of fiscal efficiency, livelihood warmth, and high-quality development. Breaking the dependence on base and enhancing the scientificity and standardization of budget allocation. According to the budget report, the pilot scope of zero base budget reform for central departments will be further expanded in 2026, guiding local governments to deepen exploration and promote the establishment of a budget allocation mechanism that is balanced, adjustable, and dynamically adjusted. Accelerate the construction of the expenditure standard system and enhance the scientific and standardized allocation of budgets. According to Luo Zhiheng, Chief Economist of Yuekai Securities, improving the budget allocation mechanism means using methods such as "pooling funds", "refining standard lines", and "strict performance measures" to truly break the dependence on the base for zero based budgeting, and achieve the transformation of fiscal funds from "passive arrangement" to "active governance". "In 2026, the reform of zero based budgeting in central departments will gradually move towards deeper areas on the basis of previous pilot projects, gradually expand its scope, and take more solid measures, and the results are worth looking forward to." Regarding the progress of local zero based budgeting reform, Luo Zhiheng believes that attention should be paid to the following issues. One is to strengthen the construction of supporting systems and mechanisms, as well as the capacity building of personnel in grassroots budget departments, scientifically and effectively use digital tools, and improve the efficiency of zero based budget reform. Pilot areas can be encouraged to actively use digital and other means to develop various tools for zero based budget management. For example, intelligent project review tools and major project financial capacity assessment tools can be dynamically updated in real-time based on changes in major project parameters. The second is to fully consider the development level and financial gap of different regions. The progress, scope, and specific measures of reform may vary and should be tailored to local conditions. For example, for economically underdeveloped areas, the focus is on the effectiveness of the "three guarantees"; For economically developed regions, the focus is on the effectiveness of economic structural adjustment and the transformation of old and new driving forces. In addition, the focus of performance evaluation for different categories of fiscal expenditures can vary. Livelihood welfare expenditures should focus on fairness and inclusiveness, government basic functional expenditures should focus on standardization and conservation, and economic development expenditures should focus on generating physical workloads, stimulating innovation, and ensuring fiscal sustainability. Thirdly, the zero based budget reform involves a wide range of aspects and requires a systematic approach. While strengthening the top-level coordination of zero based budget reform, local governments should be given autonomy to actively explore and innovate reform plans; We need to balance short-term concentrated efforts with long-term sustainability, conduct fiscal capacity assessments, and connect with medium-term fiscal planning; We need to balance key guarantees with comprehensive coverage, giving priority to safeguarding major national strategies, basic livelihoods, and grassroots operations. (New Society)