III. Working Diligently to Ensure Satisfactory Implementation of the 2005 Budgets

In accordance with the general requirements for the work of the government in 2005, we will concentrate on the following tasks.

1. Organizing revenue in strict accordance with the law to ensure steady increase.

We will strongly support authorities responsible for collecting and managing revenue, such as tax and customs agencies, in cracking down on smuggling, tax evasion and fraud and all other tax-related crime in accordance with the law. Tax reduction and exemption should be brought under tight control, and a review should be promptly made to screen out preferential tax policies that have expired. We will resolutely stop introduction of unauthorized tax reduction and exemption policies in the guise of refunds of collected taxes and correct all such current policies. While continuing to review and rectify administrative charges and government funds and resolutely straightening out and prosecuting cases of collection of arbitrary charges, we will rationally tap the potential of lotteries, payments for use of state-owned resources or assets, government capital and other non-tax sources of revenue. We will intensify efforts to include non-tax revenue within the scope of "separate management of revenue and expenditures" and to compile comprehensive budgets. We will plug all types of loopholes to ensure a steady increase in revenue. Coordination in the allocation of tax and non-tax revenue will be gradually strengthened to give government at all levels better fiscal control.

2. Taking measures to better utilize funds for key projects.

The central and local governments must not only provide adequate funding for key expenditure items such as agriculture; social security; education, science, culture and health; and environmental protection. They must also improve methods for managing funds and intensify efforts to integrate them. We should review past experience, make corresponding improvements, and expand the practice of using budgetary funds to directly subsidize agriculture. In addition, we should make the implementation of policies more standardized and transparent and reduce the number of intermediate links and management costs to more directly, more truly and more fully benefit regions, industries and target groups in society. We will further standardize the system of transfer payments to tighten supervision over transferred funds. Great efforts should be made to implement the systematic project to alleviate financial difficulties at the county and township levels. Provincial-level finance departments should formulate truly feasible, concrete implementation methods and support measures and pay particularly close and careful attention to this when compiling their budgets for 2005. Each local department of finance must present an annual report to the people's congress or its standing committee at the same level on the measures they have taken to alleviate the financial difficulties of counties and townships, on the use of the rewards and subsidies from the central government, and on the results of their work in this regard. The central government will strengthen its restraint mechanism to ensure that the use of these funds is examined annually for no less than 10 percent of all local authorities and organizations involved. Local authorities and organizations that go against regulations to obtain rewards or subsidies under false pretenses or use such funds in ways that violate regulations will not only have to return the funds, but will also be no longer eligible to receive them. In addition, the persons responsible for infractions will be prosecuted in accordance with the law and the circumstances.

3. Deepening the reform of the budgetary management system and putting management of financial affairs on a firmer legal footing.

We will work vigorously to set up a scientific and standardized system for classifying government revenue and expenditures. We will extend the scope of the reform requiring budgets for basic expenditures, steadily implement the reform to set the allowable amounts for in-kind expenditures for administrative bodies, and manage project budgets on a rolling basis. The reform to introduce the centralized treasury payment system should be extended to all central departments and departments at other levels. A pilot project will be implemented in which the central government's appropriations to local authorities will be paid directly through the central budget. The government procurement system will be expanded to include all government bodies, institutions and mass organizations at all levels. A pilot project will be implemented in which government procurement is financed through central government appropriations to local authorities, making sure to incorporate projects and services into the scope of government procurement. We will gradually strengthen the guiding role of government procurement policy and strive for total government procurement of 250 billion yuan in 2005. We will explore ways to establish a budgeting system for state capital. We will conscientiously implement the Administrative Permission Law, the Program for Comprehensively Implementing Government Administration in Accordance with the Law and the Regulations on Penalties and Sanctions for Illegal Fiscal Acts. Great efforts will be made to improve implementation of systems related to administrative permission in public finance and to standardize enforcement of laws governing its administration. We will support and promote revision of the Budget Law and the Law on Certified Public Accountants to further improve the legal framework for public finance work. We will accelerate the process of bringing China's corporate accounting standards in line with international practices, strengthen efforts to improve the integrity of certified public accountants, continue to rectify and standardize financial and economic order, tighten oversight and inspection of the entire process of collecting revenue and paying out expenditures and comprehensively promote the handling of financial affairs in accordance with the law.

4. Practicing strict economy and resolutely opposing extravagance and waste.

China has been experiencing sustained development of the economy and rapid increase in government revenue over the past few years. We must be fully aware that this situation could easily lead to the waste and loss of funds, making it all the more necessary to oppose and stop extravagant spending. We must keep in mind that China is still in the primary stage of efforts to build a moderately prosperous society in all respects. We still need to provide financial support and guarantees to promote development, support reform and maintain the "five balances". We still need to strengthen many weak links, provide aid to many needy groups in society and fund many endeavors. Just because the increase in government revenue has been relatively good does not mean we can neglect hard work, efforts to practice economy and oppose waste. In line with the "two musts" [we must always be modest, prudent and free from arrogance and rashness in our work and continue to hold to a principle of hard struggle and plain living, tr.] and the requirements for developing a conservation-minded society, we must continue to work hard, carefully make budget calculations and do everything in an economical manner. We must strictly control costs for meetings, entertainment, transportation related to official duties and other general expenditure items. We will energetically promote the trial evaluation of the performance of budgetary funds, improve evaluation measures, expand the scope of the trials, closely monitor their performance and save funds wherever possible. Funds should be used where they are needed most and can be put to best use. We will tighten financial discipline and severely deal with all kinds of waste and extravagance.

Implementing the budgets and carrying out the financial work for 2005 represent both an arduous task and a glorious mission. Under the leadership of the Party Central Committee with Comrade Hu Jintao as General Secretary, we will hold high the great banners of Deng Xiaoping Theory and the important thought of Three Represents, follow the various requirements for economic and financial work set at the Third Session of the Tenth NPC, consciously subject our financial work to the oversight and direction of the people's congresses, earnestly listen to the CPPCC's comments and suggestions, conscientiously carry out the Education Campaign to Preserve the Advanced Nature of Party Members, truly improve our style of work, strengthen our ability in financial work, explore new ways, work hard and make continued contributions to the effort to build a moderately prosperous society in all respects.