Third, we are promoting steady progress in trials for the reform of the compensation system for the use of natural resources and for damage to the environment. We are improving the trial reform of the compensation system for the use of coal resources. As part of the effort to work out a trans-provincial system of compensation for ecological damage to basin areas, we have selected the electricity industry and the Taihu Lake basin for a trial of a compensation and trading system for the right to release pollutants. We are increasing funding for ecological improvement and environmental protection and will be working out and implementing corresponding fiscal and tax policies to encourage the recycling of discarded materials and the development of new, alternative, and renewable energy resources. In addition, we will be improving the policy on compensation fees for the mining of mineral resources and the creation of pollution and accelerating development of a sound system of fiscal and tax policies to encourage conservation of energy and resources and protection of the environment.

Fourth, we will improve the policy on export tax rebates and tariffs. We will consolidate the results of the reform of the export tax rebate mechanism and work out and implement a tax policy to encourage the import of resources and goods needed for technological innovation and control the export of products whose production is high in energy consumption or is highly polluting. We will support enterprises in increasing their ability to comply with international trade norms.

7. We will actively help in the reform to combine the two laws on corporate income tax to further improve the socialist market economy. We need to make more effective use of the role of fiscal and tax systems in regulating the national economy, in promoting economic restructuring and in ensuring sustainable development.

First, we will actively work on legislation to combine the two laws on corporate income tax, one for domestic enterprises and one for overseas-funded enterprises. We will be working out regulations for implementing the Law on Corporate Income Tax and formulating corresponding support policies and measures to ensure smooth progress in implementing the law, promote fair competition among enterprises, allow Chinese enterprises to grow bigger and stronger, expand domestic demand and promote sustainable economic development.

Second, we will make steady progress in the reform of other taxes. We will lose no time in working out a specific plan and support measures for fully implementing the VAT reform. We will be introducing and implementing a new tax system for resources. We will strive to complete formulation and begin implementation of a new tax for the use of farmland for nonagricultural purposes. We will work out an implementation plan for levying tax on property. We will soon improve the plan for reforming the fuel tax and begin implementation when conditions are right. We will work out revisions to the stamp tax. We will constantly work to improve policies and measures related to the regulation of tax on real estate.

Third, we will strongly support deepening of the reform of SOEs and the financial system. We will continue supporting the policy-mandated closing and bankruptcy of SOEs, make proper arrangements for the employees of these closed and bankrupt enterprises, and promote economic restructuring. We will accelerate the trial reform of collectively owned factories operated by SOEs in northeast China. We will support the development of small and medium-sized enterprises. We will energetically pursue reform of policy banks, the Agricultural Bank of China and the China Export & Credit Insurance Corporation and prepare financial asset management companies to compete in the market.

Fourth, we will launch a trial budget system for the management of state capital. Compiling a budget for the management of state capital will help to strengthen the government's ability to exercise macroeconomic regulation, reduce structural obstacles hindering the development of SOEs, promote strategic adjustment in the distribution and structure of the state sector of the economy, pay necessary reform costs and standardize the distribution relationship between the state and SOEs. Some enterprises directly managed by the central government and tobacco enterprises will be selected to participate in a trial compilation of budgets. Local governments should also actively work to launch such trials and ensure that they produce the anticipated results.

8. We will increase transfer payments to improve the ability of local governments to provide basic public services. Continuing to carry out fiscal and tax policies designed to promote the large-scale development of the western region, revitalize old industrial bases such as northeast China and promote the revival of the central region, supporting the role of the eastern region in leading development, and constantly increasing fiscal support will not only improve the ability of the government to provide public services but also speed up economic restructuring.