2. We need to work hard on reform of the budgetary management system to make it more scientific and modern. We will be carrying out a timely review of our experience in the classification of government revenue and expenditure items. In order to address new situations and problems, we need to improve the arrangement of budget items and work out a budgetary management model under the new classification system. On the basis of a sound system of standards for expenditures, we will launch a trial formulation of budgets for 14 central government departments and enterprises, including the Ministry of Agriculture. To make these budgets more detailed, expenditure items will be organized according to economic classification. In addition, we will thoroughly study the issue of how to improve the report format for the government budget so that the budget truly gives a complete picture, is more open and transparent, and is easier to oversee. We need to continue to strengthen the management of surplus revenue, energetically carry out performance evaluation trials and set up a sound system of standards for expenditures. Public service institutions subject to the Civil Service Law will be incorporated into the trial to set funding according to the number of employees in order to replace the practice of setting the allowable amounts for in-kind expenditures with the method of setting funding according to number of employees. We will work out a mechanism for organically integrating asset management and budgetary management. We need to expand the reform to centralize expenditures in the treasury at the level of the central and provincial governments to incorporate all lower-level organs that compile budgets, central government funds, retirement funds, and government funds held at the provincial level. All prefecture and city governments should strive to carry out this reform, and county governments should energetically work for progress in this reform. All organs under central government departments and revenue-collecting organs will carry out reform of the collection and disposal of non-tax income, the scope of funds included in the reform at the provincial level will be expanded to cover all non-tax income, and the reform should also be energetically promoted below the provincial level. We need to further improve the government procurement system. The scope of items subject to government procurement will be expanded and greater use will be made of special allocations for particular purchases to give full play to the function of government procurement policy and to standardize government procurement procedures. We need to tighten management of the state-owned assets of administrative bodies and public service institutions. We will review the assets of these bodies and institutions, introduce rules and regulations on the management of such assets and set up the basic elements of a dynamic national information system to monitor and manage these assets. We need to accelerate work to set up the Government Financial Management Information System, make better use of advanced information technology in budgetary management and raise the level of budgetary compilation and management.

3. We need to work hard to ensure that key expenditures are met and effectively standardize the management of dedi cated funds. The central government and local governments at all levels need to work hard to adjust the pattern of expenditures strictly in accordance with the Scientific Outlook on Development and with the requirement to build a harmonious socialist society. Governments from the highest to lowest level must make a concerted effort to ensure that all key expenditures identified by the Central Committee and the State Council are met and fully reflected in the compilation and execution of their budgets. We need to work hard to institute standardized management of dedicated funds, making substantial progress as soon as possible. We must strictly control the addition of new budgetary items earmarked for special purposes, and any such new item in the central budget not specifically required by law, regulation or decree of the State Council must be approved by the State Council. We need to standardize special transfer payments and improve measures for the handling of such funds to make their handling more open, transparent and standardized. We need to review special transfer payments to eliminate overlap and redundancy wherever possible and also ensure that such payments truly realize their stipulated purpose. We need to improve the compiling of special transfer payments in the budget, gradually incorporating them into local budgets, and centralize expenditures from special transfer payments in the treasury.

4. We need to work hard to ensure public finance is handled in accordance with the law by tightening financial oversight and management. We need to fully ensure that public finance is handled in accordance with the law by fully implementing the Program for Advancing All Aspects of Government Administration in Accordance with the Law issued by the State Council. We will continue working diligently on financial and tax legislation such as regulations for implementing the Law on Corporate Income Tax and the Government Procurement Law, the Regulations for the Management of the Evaluation Industry, the Regulations for Budgetary Management of the Management of State Capital in Enterprises and the Regulations for the Management of Lottery Ticket Proceeds. We need to work hard to ensure compliance with accounting and auditing norms and general financial regulations, improve basic work such as accounting, auditing and asset evaluation and work hard to develop a standardized system for internal control in enterprises. We will step up the pace of research on reform of government accounting. We will continue carrying out the program to produce more accounting personnel and tighten certification and oversight to promote the sound development of certified public accountants and the asset evaluation industry. We need to improve the financial oversight mechanism to strengthen compliance oversight for major fiscal policies, focusing on ensuring the proper use of government funds affecting the vital interests of the masses. We must conscientiously accept the oversight of the NPC, auditing and discipline inspection departments, people's organizations and public opinion. We must firmly establish the idea of administering public finance in accordance with the law and for the people to prevent the occurrence of all types of problems that contravene financial and economic laws and regulations.

5. We need to always be frugal and resolutely combat extravagance and waste. Although the size of the economy has continued to grow and revenue has rapidly increased in recent years, we must remain clear-headed, prepare for trouble in times of peace and become more alert to the possibility of danger. China is the world's largest developing country and will remain in the primary stage of socialism for a long time to come. Furthermore, development in the country is uneven, a large number of people lead very difficult lives, the average standard of living is not very high and there are still many tasks to be accomplished in the course of development. Therefore, we can never start spending money hand over foot just because revenue has been relatively good recently. We must strictly control increases in expenditures in accordance with the budget, paying particular attention to increases in regular expenditures. The system of receptions as part of official functions must be reformed and improved and management of expenses for business trips and meetings must be tightened. Persons incurring out-of-town travel and meeting expenses paid by state organs should be required to use designated venues in accordance with the requirement to develop a conservation-minded society and the "two imperatives." (It is imperative to always be modest, prudent and free from arrogance and rashness in work and it is imperative to continue following a principle of hard struggle and plain living, Tr.) We need to tighten financial and economic discipline, strengthen oversight, practice thrift and economy in handling all affairs and resolutely combat extravagance and waste. Budgetary funds must be used only where they are most needed and the use of such funds must be made more standardized, safe and effective.

The year 2007 is an important year for efforts to thoroughly put into practice the Scientific Outlook on Development and build a harmonious socialist society. Satisfactorily implementing the budgets and all tasks in public finance work will be an accomplishment of great significance. Under the leadership of the Central Committee with Comrade Hu Jintao as General Secretary, we must hold high the banner of Deng Xiaoping Theory and the important thought of Three Represents. We must diligently put the Scientific Outlook on Development into practice, meet all the requirements for economic and financial work set out at the Fifth Session of the Tenth NPC, conscientiously accept the oversight and guidance of the NPC for financial work and carefully listen to the comments and suggestions of the CPPCC National Committee. We must shore up our confidence, act in concert, strive for progress, work effectively and make greater contributions to building a moderately prosperous society in all respects and accelerating the building of a harmonious socialist society. Finally, we must score even more achievements to welcome the successful convening of the Seventeenth National Congress of the Party!

(China.org.cn March 19, 2007)