Four is to improve the structure of budgetary expenditures and maintain and improve the people's wellbeing. We will support rural reform and development. The central government will allocate 716.14 billion yuan, an increase of 120.59 billion yuan or 20.2%, to assist agriculture, rural areas and farmers. We will focus on efforts to maintain and improve the people's wellbeing. The central government will allocate 728.463 billion yuan, an increase of 165.334 billion yuan or 29.4% in comparable terms, for education, medical and health care, the social safety net, employment, low-income housing and culture that are directly related to the people's wellbeing. Regular expenditures will be strictly controlled and administrative overhead further reduced.

Five is to strongly support innovation in science and technology, energy conservation and emissions reduction, and promote economic restructuring and transformation in the pattern of economic development. We will increase spending on science and technology. The central government will allocate 146.103 billion yuan for science and technology, an increase of 29.774 billion yuan or 25.6%. Twenty billion yuan in subsidies on the interest payments of bank loans will be allocated to accelerate technological upgrading and advances in enterprises and encourage banks to increase loans in this respect with the focus on projects designed to invigorate industries. Spending on energy conservation and emissions reduction will increase with a special allocation of49.5 billion yuan to support efforts to retrofit energy-conserving technology and retire backward production facilities. We will make steady progress in the reform to institute a system of compensation for the use of resources and a mechanism of compensation for degradation of the ecosystem. The system of taxes on resource use will be reformed and improved to promote the reasonable utilization of resources. A total of 9.6 billion yuan will be allocated to support development of small and medium-sized enterprises. We will accelerate improvement of the industrial structure, strengthen the ability to engage in independent innovation and promote the transformation of the pattern of economic development.

Planning for the aggregate level of budgetary revenue and expenditures and the budget deficit for 2009. In accordance with the growth in GDP of approximately 8% projected for 2009 and other anticipated economic development targets, and further factoring in the proactive fiscal policy and policies for instituting structural tax reductions and exemptions, such as the VAT reform and the increase in export tax rebates, various factors that will tend to reduce revenue and increase expenditures, such as increasing the scale of public spending and increasing expenditures to boost consumer demand and improve the people's wellbeing, in addition to the conversion of the road maintenance fee to a sales tax pursuant to reform of taxes and fees for refined petroleum products, and specifically analyzing how these factors will affect all revenue and expenditure items in the central budget, we have set the following major targets for the 2009 budget: Total revenue in the central budget should reach 3.586 trillion yuan, an increase of 318.801 billion yuan (including the increase in sales tax receipts following reform of taxes and fees for refined petroleum products) over the actual figure for 2008 (same below), an increase of 9.8%. An amount of 50.5 billion yuan will be added from the central budget stabilization fund, bringing total revenue for 2009 up to 3.6365 trillion yuan. Total expenditures in the central budget total 4.3865 trillion yuan, an increase of 848.501 billion yuan, up 24%. These consist of 1.4976 trillion yuan incurred at the central government level, an increase of 160.169 billion yuan or 12%, and 2.8889 trillion yuan paid out as tax rebates and transfer paymentsto local governments, an increase of 688.332 billion yuan or 31.3%. Expenditures exceed revenue in the central budget, resulting in a deficit of 750 billion yuan. With a corresponding increase in the volume of government bonds issued, the limit for the outstanding balance of government bonds in the central budget stands at 6.270835 trillion yuan. Revenue collected by local governments should reach 3.037 trillion yuan, up 6%. Added to the 2.8889 trillion yuan in tax rebates and transfer payments from the central government, total revenue in the local budgets should total 5.9259 trillion yuan, an increase of 860.841 billion yuan or17%. Expenditures in the local budgets should total 6.1259 trillion yuan, an increase of 1.220628 trillion yuan or 24.9%. The State Council will allow local governments to issue 200 billion yuan worth of government bonds through the Ministry of Finance, which will go into provincial budgets. Preliminary provisions for the central and local budgets indicate that total national revenue should reach 6.623 trillion yuan (not including the 50.5 billion yuan from the central budget stabilization fund), an increase of 8%, and total national debt should reach 7.6235 trillion yuan, an increase of 22.1%. Total expenditures should exceed total revenue, yielding a deficit of 950 billion yuan to be offset by bond issues.