Second, efforts were made to support the reform and development of SOEs. Fund
totaling 25 billion yuan was earmarked in the central budget for 2006 to support
the policy-mandated bankruptcy of 93 SOEs and to make arrangements for the
410,000 laid-off employees. A base figure of 4.81 billion yuan was approved for
subsidies for the work of relieving SOEs of the burden of operating social
programs, and this work was basically completed in the second group of 74
central government enterprises. The trial reform in northeast China to solve the
problem of SOEs managing collectively owned factories got off to a smooth start.
In addition, a number of fiscal and tax policies were introduced to support
development of small and medium-sized enterprises, promote reform of foreign
trade and implement the "go global" strategy.
Third, support was provided for promoting the reform of the financial system.
We obtained a clear picture of the number and distribution for state-owned bank
and financial assets. We formulated a policy for turning over the revenue from
state-owned shares to the government, a policy for reducing the number of
state-owned shares and a policy for corporate income tax, and supported the
restructuring and listing of the Bank of China and the Industrial and Commercial
Bank of China.
Fourth, reform of the classification of government revenue and expenditures
progressed steadily. This is the most important change in the classification and
statistical system for government revenue and expenditures since the founding of
New China in 1949 and also represents a profound innovation in the government's
budgetary management system. The new classification system fully embodies the
integration of standard international practices with the particular conditions
in China. Moreover, it gives a clearer picture of the revenue and expenditures
of the government as well as the government's performance in carrying out its
functions. This is of great significance for making the government budget more
transparent, strengthening budgetary management and oversight, fighting
corruption at the source, and promoting socialist democratic politics.
Fifth, we constantly deepened the reform of other budgetary management
systems. We tightened control over surplus budgetary funds, made steady progress
in implementing performance assessment trials, made constant improvement in
trials to optimize allocation of human resources and funding, and instituted a
method for managing project budgets on a rolling basis. The reform to set up a
centralized treasury payment system was expanded to include all central
government departments and over 6,100 of their subsidiary organs responsible for
preparing their own budgets. The system now covers more than 460 billion yuan of
budgetary funds. The reform also covers more than 160,000 lower-level organs
that prepare their own budgets in over 1,000 counties and city districts in more
than 270 prefectures and cities at the level of a prefecture in 36 provinces,
autonomous regions, municipalities directly under the central government and
cities specially designated in the state plan. Reform of the management system
for collection of non-tax revenue was accelerated and the scope of the reform
was continuously expanded. Total government procurement reached 350 billion yuan
in 2006, enabling government procurement to be fairly effective in supporting
and guiding energy conservation and environmental protection. Initial results
were achieved in the campaign to combat bribery in government procurement. Money
management through the treasury was steadily instituted, management of the
outstanding balance of the national debt was instituted and efforts were
accelerated to establish the Government Financial Management Information System.
All these measures helped to modernize the traditional budgetary management
system and promote constant improvement in the socialist market economy.
7. Public finance was handled in strict accordance with the law and progress
was made in standardizing administration of public finance. The basic policy of
running the country and administering public finance in accordance with the law
was followed in all financial work.
