10) Spending on public security came to 87.577 billion yuan, up9.3% and equivalent to 102.1% of the target. We intensified our efforts to ensure adequate funding for procuratorial, judicial and public security organs, with the focus on guaranteeing sufficient operating expenses to carry out their major duties and improve their infrastructure. We made funds available for reforming the method for collecting court fees for bringing suits. We supported key areas of the country in responding to emergencies.

11) Expenses for national defense totaled 409.943 billion yuan, up 17.7% and equivalent to 100% of the target.

12) Expenditures for transportation amounted to 129.077 billion yuan, an increase of 3.4% (or 22.6% if not including the one-time expenditures in 2007 for railway construction financed with the proceeds from the sale of state assets held by railway enterprises) and equivalent to 122.4% of the target. The large amount over the target was mainly due to increase in expenditures from vehicle purchase tax receipts and in expenditures for developing highways, railways, and other transport facilities during implementation of the budget. Included in this total is 49.5 billion yuan used to strengthen transportation infrastructure such as expressway networks, railways, inland channels, and airports, and 49.2 billion yuan spent to increase support for construction of rural roads, resulting in 391,000 kilometers of newly built or upgraded roads.

13) Expenditures for providing general public services totaled 252.299 billion yuan, up 8.7% and equivalent to 95% of the target. This consists of 1) 127.233 billion yuan for basic public administration and services, such as operation of government offices, down 4.3% and equivalent to 89.6% of the target (expenditures were under the budgeted amount for this item mainly because the budget compiled early last year included transfer payments to administrations of industry and commerce in compensation for the fees they used to collect from sole proprietors and fair trade markets, but during actual implementation this item was incorporated into fiscal transfer payments, and regular budgeted expenditures of state organs were reduced to make more funds available to fight the earthquake and provide disaster relief); and 2) 125.066 billion yuan was used to pay interest on national debt, an increase of 26.2% and equivalent to 101.2% of the target.

Total spending by the central government on the above items in areas such as education, medical and health care, the social safety net, employment, low-income housing and culture that directly affect the people's lives came to 560.364 billion yuan, an increase of 29.2%. Central government expenditures for agriculture, rural areas and farmers totaled 595.55 billion yuan, an increase of 163.7 billion yuan or 37.9%. This figure includes 226.01 billion yuan for agricultural production; 103.04 billion yuan, an increase of 100%, for direct subsidies to grain producers, general subsidies for purchasing agricultural supplies, subsidies for planting superior crop varieties and subsidies for purchasing agricultural machinery and tools; 207.28 billion yuan for social programs such as education, medical and health care, the social safety net, employment, low-income housing and culture in rural areas; and 57.62 billion yuan for expenses and interests related to stockpiles of major agricultural products. The central government's tax rebates and fiscal transfer payments to local governments totaled 1.255932 trillion yuan, the bulk of which went to the people's wellbeing, agriculture, rural areas, and farmers.

3. Public finance's active effect in macro-control

The central leadership made major adjustments in the orientation of macro-control on two occasions in light of developments and changes in the domestic and international economic situations. The primary task for macro-control shifted mid-year from preventing overheated economic growth and significant inflation to maintaining steady and rapid economic development and preventing prices from rising too fast. In September, the central leadership resolutely shifted the focus of macro-control to preventing economic growth from slowing down too quickly. Even more proactive fiscal and taxation policies and measures were adopted mid-year in line with the orientation of central government macro-control while the government continued to pursue a prudent fiscal policy. An even more proactive fiscal policy was implemented in and after October by reducing and exempting taxes and fees by an appropriate amount, raising export rebate rates several times and increasing the spending and key expenditures of the central government. These moves played an important role in promoting steady and rapid economic development.