Revenue in the central government budget for 2005 exceeded the projected figure by 161.9 billion yuan (including the additional amount used to pay export tax rebates). Disposal of this surplus amount was carried out in accordance with the directives of the Central Committee and the State Council on adopting a scientific outlook on development, the Decision of the NPC Standing Committee on Improving Examination and Oversight of the Central Government Budget, and relevant resolutions passed at the Third Session of the Tenth NPC. Besides spending 32.8 billion yuan of the surplus to increase tax rebates and general transfer payments for local governments and transfer payments for ethnic minority regions as required by relevant laws and regulations and statutes of the public finance system, the central government mainly used the surplus to strengthen weak links in economic and social development and to clear up long-overdue payments. Specifically, an additional 24.4 billion yuan was spent on social security (19.4 billion yuan for the national social security fund and 5 billion yuan for subsidies to support the closure or bankruptcy of state-owned enterprises). Another 2.6 billion yuan was used to increase spending on education and science. The additional 58.4 billion yuan that was earmarked for export tax rebate payments was used to pay the additional export tax rebates of 2005 and to clear up some of the long-overdue payments. A total of 9 billion yuan was spent on payments long overdue for policy-based purchases of cotton by supply and marketing cooperatives. The remaining 34.7 billion yuan was reserved for funding reform of the salary system for civil servants and implementing support policies. The State Council reported these arrangements for the use of the surplus to the NPC Standing Committee.

2. Supporting efforts to solve the problems facing agriculture, rural areas and farmers and promoting balanced urban and rural development. In 2005 the government continued to give strong financial support to agriculture, rural areas and farmers and implement practical policies and effective measures. A total of 297.5 billion yuan from the central government budget alone was allocated in 2005 for agriculture, rural areas and farmers, 34.9 billion yuan or 13.3% more than the actual figure for expenditures in 2004.

First, the reform of rural taxes and fees was deepened. The central government allocated 66.2 billion yuan in the form of transfer payments for this purpose, a 26.3% year-on-year increase. The livestock tax and all taxes on native agricultural products except for tobacco were rescinded throughout the country in 2005 and the agricultural tax was also rescinded in 28 provinces, autonomous regions and municipalities directly under the central government, benefiting 800 million farmers.

Second, we implemented policies such as the "triple subsidy" policy [subsidies granted to farmers for growing grain, planting superior grain varieties, and purchasing large agricultural machinery and tools, tr.]. A total of 13.2 billion yuan was used for direct subsidies to grain producers in 30 provinces, autonomous regions and municipalities directly under the central government, 13.8% more than in 2004. Another 3.87 billion yuan was spent to help farmers purchase improved strains, 35.8% more than in 2004. The central government also paid 300 million yuan in subsidies to purchase agricultural machinery and tools, more than four times as much as the amount for 2004. In addition, 5.5 billion yuan of special funds was earmarked to support major grain-producing counties. The central government rescinded the VAT on urea manufactured or distributed by domestic enterprises and used tariff policies to encourage the import of agricultural supplies that were in short supply in China. This encouraged local governments to pay closer attention to agriculture and grain production and helped safeguard the food security of the country.