2. General requirements for budget preparation and financial work

In accordance with the requirements of the central leadership that we correctly handle the relationship between maintaining steady and rapid economic development, restructuring the economy and managing inflation expectations, that we maintain continuity and stability in our macroeconomic policy, and that we strive to make our policies more targeted and flexible in line with new situations and circumstances, the guiding thought for budget preparation and financial work in 2010 is as follows. We need to conscientiously implement the guiding principles of the Seventeenth National Party Congress and the third and fourth plenary sessions of the Seventeenth Central Committee; take Deng Xiaoping Theory and the important thought of Three Represents as our guide; thoroughly apply the Scientific Outlook on Development; continue to follow a proactive fiscal policy; vigorously adjust the pattern of national income distribution; carry out reform of the fiscal and taxation systems; improve the structure of government expenditures; increase support for agriculture, rural areas, farmers, education, science and technology, medical and health care, social security, low-income housing, energy conservation, emissions reductions, and underdeveloped areas; promote economic growth, economic restructuring, balanced development between regions, and coordinated development between urban and rural areas; and effectively ensure and improve the people's wellbeing. We need to adhere to the principles of managing public finance in accordance with the law, taking all factors into consideration, and increasing revenue and reducing expenditures. We need to make the management of public finances more scientific, strictly control general expenditures, utilize funds more effectively, and promote steady and rapid economic development.

Based on this guiding thought, in our financial work in 2010 we will place greater emphasis on promoting economic restructuring and improving the quality and efficiency of economic development; on boosting domestic demand, particularly consumer demand, and achieving steady and rapid economic growth; on ensuring and improving people's wellbeing, and promoting balanced economic and social development; on deepening fiscal and taxation reforms, and enhancing the internal impetus for and vitality of economic and financial development; and on managing public finance in a more scientific and meticulous manner and utilizing funds more effectively. In continuing to follow a proactive fiscal policy we must focus on the following areas.

First, we will increase urban and rural incomes and boost consumer demand. We will promote the adjustment of the distribution of national income; increase government subsidies; raise the people's consumption capacity, particularly that of low- and middle-income earners; improve fiscal and taxation policies for guiding consumption; and get consumption to play a bigger role in driving economic growth. We will further increase subsidies to farmers and raise minimum prices for the purchase of key grain varieties to increase their incomes. We will raise subsistence allowances for urban and rural residents, basic old-age pensions for enterprise retirees, and subsidies and living allowances for entitled groups. We will vigorously expand employment, and support implementation of the minimum wage system to increase the income of low-income earners. We will apply a performance-based salary system in schools providing compulsory education, public health institutions, and community-based medical and health service institutions. We will improve policies for promoting purchases of home appliances and motor vehicles including motorbikes by rural residents, and for subsidizing trade-ins of old home appliances and motor vehicles for new ones, and we will guide consumer spending.

Second, we will arrange and use public investment well and vigorously optimize its structure. We will focus on supporting low-income housing, rural infrastructure, social programs such as education and medical and heath care, energy conservation, environmental protection, ecological conservation, independent innovation and restructuring, as well as underdeveloped areas. Investment funds will be used mainly for carrying on and completing projects and making sure we don't leave projects half finished. We will strictly control the launching of new projects and prevent redundant construction. We will support recovery and reconstruction in earthquake-hit areas. We will expand the scope of substituting awards for subsidies in projects funded through government investment and stimulate non-government investment.