Second, we will continue strengthening the social safety net. We will improve both the basic cost of living allowance system for urban residents and the system of basic old-age pensions for retired enterprise employees. We will also support the expansion of the pilot project to fully fund personal retirement accounts. We will continue to follow preferential fiscal and tax policies to promote employment and reemployment and speed up resolution of longstanding problems. We will strengthen the management of social security funds and other types of social welfare funds, focusing on setting up sound financial regulations and oversight and restraint mechanisms for social security funds. We will support efforts to provide employment and social security coverage to rural migrant workers and to farmers whose land has been expropriated. We will improve the social welfare system, strongly support disaster prevention and relief, and help improve working and living conditions for needy people.

Third, we will continue standardizing the pattern of income distribution. We will strictly carry out the reform of the civil servant salary system and standardize policies and regulations concerning the pattern of income distribution for civil servants. We will continue to raise the level of basic retirement pensions for persons retired from enterprises in accordance with the plan of the State Council for adjusting retirement pensions for enterprise retirees. We must ensure that the central government policy of reform and standardization is fully implemented and that from now on salaries are paid on time. We will improve the income distribution policy for enterprises, reduce the income gap between managers and employees of SOEs, strengthen oversight and regulation of income distribution in monopoly industries, and standardize the income distribution system in monopoly enterprises.

Fourth, we will support development of a system to guarantee funding for low-rent housing in urban areas. We will use budget allocations, returns from the increased value of the funds in matching fund programs for housing and proceeds from land transfers to guarantee funding for low-rent housing in urban areas. We will work hard to ease the housing difficulties of low-income families by providing subsidies to lower rents and renting government housing to eligible families so that the most vulnerable groups in society have access to proper housing.

6. We will improve fiscal and tax policies to accelerate change in the pattern of economic growth. Improvement in the capacity for independent innovation and promotion of resource conservation and environmental awareness comprise an important link and breakthrough point for changing the pattern of economic growth as well as an essential route to follow to ensure sustainable economic development.

First, we will increase investment in science and technology. Allocations in the central budget for expenditures in science and technology in 2007 total 88.121 billion yuan, a 20.1 percent increase over 2006. We will improve the structure of central government investment in science and technology to further increase support for nonprofit research institutes and deepen management reform. We will support operation of major science and technology programs and promote the development of regional innovation systems that take advantage of local characteristics and strengths.

Second, we will increase the capacity of enterprises for independent innovation. We are making full use of tax policy and rearranging funds to encourage and guide enterprises to increase investment in R&D work. We are promoting protection of intellectual property rights. We are encouraging venture capital to invest in small and medium-sized new- and high-technology enterprises. We are supporting domestic R&D work and production for core key technologies and major equipment. We are promoting the development of a new mechanism that organically integrates production, education and research. Finally, we are strengthening the function of government procurement policy in supporting independent innovation.