Recently, Xu Zhong, Director of the Research Bureau of the People's Bank of China, commented that their are several indications showing that the proactive fiscal policy in 2018 is not really positive, and may even be tight. The government work report and draft of budget arrangements released in March 2018 show that the orientation of proactive fiscal policy has not changed. Xiao Jie, Minister of Finance, also made it clear that the fiscal spending intensity in 2018 will remain high when answering reporters' questions during the two sessions. Generally speaking, the national budget arrangement determines whether the orientation of fiscal policy is positive or tight, and the strength of fiscal policy is also determined by the size of fiscal deficit in the budget arrangement. However, why is the proactive fiscal policy established in the budget report not really positive or even tight in the eyes of some market participants? The author believes that this is highly related to the current situation of China's budget implementation and the operating mechanism of fiscal policy. At present, the actual strength of China's proactive fiscal policy depends not only on the budget arrangement, more importantly, it depends on the implementation and management of the budget. When I analyzed the data related to the draft of budget arrangement in 2018, I found two puzzles. The reasons behind these two puzzles can well illustrate how the actual strength of proactive fiscal policy is affected by budget implementation and management.
