First, we supported employment and reemployment work and development of the social safety net. Government spending in the country for employment and the social safety net in 2006 was 433.765 billion yuan, up 17.3 percent compared to the figure for 2005, representing 109.1 percent of the budgeted figure. Allocations from the central budget totaled 201.002 billion yuan, an increase of 22.9 percent. On the basis of the trials in the three northeastern provinces to fully fund individual retirement accounts for the basic pensions of workers retiring from state-owned enterprises (SOEs), the trial was extended to eight more provincial-level localities. We worked to ensure appropriate linkage between the urban minimum cost of living allowance system and employment and reemployment policies. We strongly supported the development of a rural medical assistance system in the central and western regions, the pilot program to provide medical assistance to urban residents in poor areas and the work of providing food, clothing, medical care, housing, and burial expenses for childless and infirm rural residents. We conscientiously carried out a strong employment policy and improved implementation measures to help SOEs in financial straits find appropriate solutions to their longstanding problems. We worked hard to assist in solving the problems of demobilized military personnel, including those working in enterprises as cadres, to help them adjust to civilian life. It is particularly worth noting that the central government promptly appropriated relief funds amounting to 11.2 billion yuan to vigorously support relief efforts in response to serious natural disasters, complemented by funds from local governments.

Second, we supported the development of education. Government spending on education in 2006 totaled 475.27 billion yuan, up 19.6 percent compared to the figure for 2005, representing 103.8 percent of the budgeted figure. The central government's contribution to this amount was 53.6 billion yuan, a year-on-year rise of 39.4 percent. In addition to giving priority to rural compulsory education, we also launched an initiative to build national vocational colleges as a showcase for vocational higher education and to support the efforts to build hands-on training centers for these colleges. We continued to support the implementation of the May 1998 Project to improve the quality of education in universities. We improved the system of financial assistance policies consisting of government student loans, grants and scholarships as the main forms of aid for students of colleges and secondary vocational schools from financially strapped families to help them complete their education.

Third, we supported the development of public health. Budget allocations from governments at all levels for medical care and public health in 2006 reached 131.158 billion yuan, a year-on-year increase of 26.5 percent, or 110.7 percent of the budgeted figure. Of this amount, 13.8 billion yuan was from the central budget, up 65.4 percent. The increased spending was mainly used to finance public health programs such as prevention and control of major communicable and endemic diseases like AIDS, tuberculosis and snail fever, to help pay the medical bills of poor women having babies in hospital, to equip and staff community health centers and rural health clinics and to fund the placement of a large number of doctors to rural areas to help develop local healthcare systems.

Fourth, we supported innovation in science and technology. In 2006 we set up a system for ensuring stable growth of government funding for science and technology, and central and local governments spent 126.038 billion yuan on science and technology, a year-on-year rise of 26.2 percent, or 110.2 percent of the budgeted figure. Of this amount, allocations from the central budget totaled 77.4 billion yuan, up 29.2 percent. We further improved the structure of this funding by increasing spending on basic research, on applied research, and for nonprofit research institutes. We encouraged independent innovation in enterprises by creating a system of incentives and by adopting preferential fiscal and tax policies toward innovative enterprises such as granting tax breaks and awarding government procurement contracts.

Fifth, we supported the development of public cultural programs as well as the culture industry. Expenditures of governments at all levels on culture, sports and radio in 2006 amounted to 83.453 billion yuan, 18.6 percent more than the previous year, or 108.5 percent of the budgeted figure. Of this amount, allocations from the central government totaled 12.3 billion yuan, up 23.9 percent. These expenditures were mainly used to proceed with the reform of the cultural management system and also improve the system of public cultural services. The focus of this spending was on funding efforts to extend radio and TV coverage to every village, to bring digital film projection to the countryside, to share cultural information across the country, to reward and assist some rural families that observe the family planning policy and to carry out the "fewer children equals faster prosperity" project in the western region.