4. Main expenditure items as provided for in the central government budget
We will further adjust the structure of expenditures, take into consideration all factors and maintain some expenditures while reducing others in accordance with the central government's policy of expanding domestic demand, sustaining growth, carrying out restructuring and improving the people's wellbeing. Expenditures will focus on agriculture, education, medical and health care, the social safety net, employment, low-income housing, science and technology, environmental protection and post-earthquake recovery and reconstruction. Main expenditure items are as follows.
1) A total of 344.659 billion yuan has been allocated for expenditures related to agriculture, rural areas and farmers, forest projects and water conservancy projects, an increase of 74.439 billion yuan or 27.5%. We will stabilize and develop grain production to increase rural incomes. An allocation of 75.6 billion yuan has been earmarked for general allowances for agricultural supplies, an increase of 5.6%. The total allowances for the purchase of agricultural machinery and tools have increased by a large margin. The allocation for 2009 is 13 billion yuan, a 2.25-fold increase, to expand the types of allowances from9 to 12 and to cover all agricultural and animal husbandry counties throughout the country. We will increase funding for allowances for planting superior seed varieties. A total allocation of 15.48 billion yuan, an increase of 25.4%, will be used to grant such allowances to more farmers who plant superior varieties of crops such as wheat and corn as such allowances are now to be granted to all farmers planting superior paddy rice strains. We will support efforts to add 50 million tons of grain growing capacity across the country step by step and in accordance with plan. We will institute a new poverty line and implement a new policy for providing support to the low-income rural population with a total appropriation there for of 19.73 billion yuan, an increase of 17.9%. We will promote agricultural restructuring. We have allocated 6.5 billion yuan for development of modern agricultural production, an increase of 20.4%, and we will support different areas in growing those crops that are best suited to their local conditions, have distinctive local characteristics and increase agricultural safety and efficiency. We will improve low-cost lending and assistance to promote the industrialization of agriculture. Overall agricultural development funds will total 14.7 billion yuan, an increase of 15.7%, and we will accelerate efforts to improve average and poor-yield farmland to increase overall agricultural production capacity, concentrating on the main grain-producing areas. We will formulate a suitable increase in the ratio for the cultivation allowance based on efforts to stabilize the current policy of allowances for paying agricultural insurance policy premiums and gradually expand the number of varieties eligible for the allowance. These steps will be financed by an allocation of 7.98 billion yuan, an increase of 31.9%. A total of 129.51 billion yuan has been allocated to develop agricultural infrastructure, provide strong support for the efforts to accelerate the reinforcement of dilapidated large and medium-sized and key small reservoirs, improve irrigated areas and build small water conservancy facilities. We will increase spending on projects for supplying safe drinking water and methane to rural areas by providing safe drinking water to another 60 million people and methane to an additional 5 million families.
2) The total allocation for education is 198.062 billion yuan, an increase of 38.208 billion yuan or 23.9%. Funds totaling 66.25 billion yuan have been allocated to increase support for expenses incurred in operating compulsory education in rural areas, an increase of 16.1%. On the basis of the policy of exempting rural students from paying tuition and miscellaneous fees, supplying them with free textbooks, and providing poor on-campus students with living expenses, the public spending per primary and secondary school student will reach the levels specified by the central government, i.e. 300 yuan for a primary school student, and 500 yuan for a junior secondary school student. We will carry out a project to improve the safety of the buildings in rural primary and secondary schools providing compulsory education. An allocation of 5.77 billion yuan has been earmarked to exempt urban students in compulsory education from tuition and other education-related expenses, an increase of 44.9%. We will assist migrant workers in urban areas in ensuring their children receive school education. The central government has allocated 12 billion yuan to implement the performance-based salary system for teachers in compulsory education. A total of 13.7 billion yuan has been allocated to develop county-level vocational education centers and demonstration secondary vocational schools, accelerate renovation of the buildings in rural junior secondary schools in the central and western regions, and improve the auxiliary facilities in ruralschools with student dormitories. Subsidies totaling 4.5 billion yuan, an increase of 115.3%, will be used to continue supporting development of state-level demonstration vocational colleges and practical workshops for vocational education and to gradually make secondary vocational education free in rural areas. Twenty-four billion yuan has been allocated for assistance to students from poverty-stricken families and for state education assistance loansand subsidies. Expenditures in higher education will total 50.255 billion yuan to continue developing high-quality universities and key disciplines.
3) Spending on medical and health care will total 118.056 billion yuan, an increase of 32.611 billion yuan or 38.2%. We will deepen reform of the pharmaceutical and health care system. Beginning in 2009, we will carry out five major tasks in the next three years to establish systems for guaranteeing basic medical services. We will improve the new rural cooperative medical care system, complete the establishment of a basic medical insurance system for non-working urban areas, and raise the level of both central and local government assistance to 80 yuan per capita. The central government has allocated 30.4 billion yuan for this purpose. The central government will help resolve the problem of retirees from local state-owned enterprises closed or forced into bankruptcy pursuant to policy in participating in basic medical insurance for urban workers, and further help resolve the problem of retirees from state-owned enterprises that are or used to be under the central government and have been closed or forced into bankruptcy pursuant to policy and from local state-owned enterprises forced into bankruptcy pursuant to policy in participating in such insurance. Subsidies totaling 6.45 billion yuan have been allocated to provide better medical assistance services for urban and rural residents. The basic framework will be set up for a national system for basic drugs so that patients have access to safe and affordable drugs. Subsidies totaling 16.53billion yuan have been allocated to improve the community-based medical and health service system, focusing on support for the establishment of 29,000 town and township hospitals and the improvement, expansion or construction of 5,000 central town and township hospitals, and to support urban community health clinics and town and township hospitals in purchasing medical equipment. An allocation of 24.6 billion yuan in subsidies will be used to improve prevention and control of major communicable diseases and other public health work. Local governments will receive support in providing certain basic public health services for urban and rural residents free of charge. The trial reform of publicly established hospitals will be extended.
4) Expenditures for the social safety net and employment will total 335.069 billion yuan, an increase of 60.71 billion yuan or 22.1%. Improving the social safety net is an important basis for improving the people's wellbeing as well as an important measure for responding to the difficulties currently facing the country and expanding consumer demand. Spending on the social safety net will total 293.049 billion yuan, an increase of 43.898 billion yuan or 17.6%. A total of 54.08 billion yuan, an increase of 48.9%, has been allocated to raise the per capita monthly cost of living allowance by 15 yuan for urban residents and 10 yuan for rural residents. Ten billion yuan has been set aside so the government can award a one-time subsidy before Spring Festival to the more than 75.7 million urban and rural residents who receive subsistence allowances, as well as childless and infirm rural residents who receive subsidies for food, clothing, medical care, housing and burial expenses throughout the country. A total of 139.241 billion yuan has been allocated to raise the level of basic pension benefits for retirees from state-owned enterprises by about 10% of the average monthly per capita benefits of 2008, with a focus on special groups, and the central and western regions and northeast China and other old industrial areas will receive assistance from the central government as required. A total of 17.512 billion yuan has been allocated to raise allowances for some entitled groups as needed and to provide allowances and living subsidies for entitled groups. We will continue to support the policy-mandated closure and bankruptcy of state-owned enterprises, promote the pilot project for reforming collectively owned factories in northeast China, the central region and some central government enterprises, and support improvements in working and living conditions for people relocated to build reservoirs.
A total of 42.02 billion yuan of employment assistance has been earmarked to support our vigorous employment policy, an increase of 16.812 billion yuan or 66.7%. We will give full play to the role government spending and major public projects play in creating jobs for migrant workers and substitute work for relief through government financing of public works projects in agriculture, forestry and water conservancy. Employment assistance will increase, focusing on finding employment for persons who have real difficulty finding it, zero-employment families and workers in disaster-hit regions, and policy support will be provided for migrant workers returning to the countryside to set up businesses. A favorable government policy will be instituted to encourage college graduates to work in urban and rural community-level organizations, the central and western regions and small and medium-sized enterprises. Support will be provided to make more training available to improve the vocational abilities of laid-off and unemployed persons and migrant workers, a special training program will be instituted, and enterprises will be encouraged to provide on-the-job training. We will support small and medium-sized enterprises and service industries in providing more employment opportunities, and encourage people to start up their own businesses or find jobs on their own through a fiscal policy of reducing or exempting taxes and fees, and providing guaranteed, small-sum, low-interest loans, social security allowances, allowances for public service work and subsidies for vocational training.
5) Expenditures to build low-income housing will total 49.301 billion yuan, an increase of 31.111 billion yuan or 171%. Greater financial support will go to building low-rent housing and upgrading shantytowns, and the amount of subsidies will be appropriately raised for the central and western regions. The problem of finding housing for the 2.6 million low-income urban families and relocating, repairing or upgrading housing for the 800,000 families living in shantytowns in forest areas, wasteland areas and adjacent to coalmines will be addressed mainly by providing housing, coupled with rent subsidies. Efforts to upgrade dangerously dilapidated rural housing will be intensified and projects to build permanent housing for pastoral nomads in ethnic minority areas implemented.
6) Spending on cultural programs will total 27.975 billion yuan, an increase of 2.694 billion yuan or 10.7%. Cultural programs of a public service nature will be vigorously developed to open up more areas of consumption. Support will be forthcoming to provide free admission to public museums, memorial halls and national patriotic education demonstration bases under cultural and relics departments at all levels across the country. Projects will be carried out to protect major cultural and historical sites to strengthen protection of the country's important national heritage. Support will go to extending coverage of national wireless radio and television programs in rural areas, expanding sharing of cultural information and resources across the country, promoting digital movie displays in rural areas, developing small rural reading rooms and carrying out other cultural projects that benefit the people. We will promote reform of the culture system, promote the conversion of profit-making cultural institutions into enterprises, and develop the culture industry.
7) A total of 178.045 billion yuan will be spent on grain, edible oil and materials reserves, an increase of 67.535 billion yuan or 61.1%. Nineteen billion yuan has been set aside for direct subsidies to grain producers, an increase of 25.8%. In order to stimulate domestic demand, 78.341 billion yuan has been earmarked to expand reserves of important materials such as grain, edible oil, petroleum, nonferrous metals and specialty steel products and develop storage facilities. We will support a large increase in the minimum grain purchase prices and make allocations in full and on time for the purchase and storing of grain and associated expenses and interests. A subsidy of 13% of the purchase price will be granted to rural residents buying motorcycles and home appliances such as color TV sets, refrigerators, washing machines, cell phones, computers, water heaters and air-conditioners, for which 20 billion yuan has been set aside, a 9-fold increase. Five billion yuan has been allocated in one-time government subsidies for rural residents who scrap their three-wheeled vehicles and slow-speed trucks for light-duty trucks and those who buy passenger vehicles with engine displacements at or under 1.3L. A total of 7.4 billion yuan will be used to improve logistics and develop modern services in rural areas.
8) Expenditures for science and technology will total 146.103 billion yuan, an increase of 29.774 billion yuan or 25.6%. A totalof 93.801 billion yuan will apply to speed up advances and independent innovation in science and technology, promote strategic economic restructuring, and increase financing for basic research and application research. Another 32.8 billion yuan has been earmarked to ensure the success of major science and technology projects. We will support efforts to improve research conditions and capacity in (key) national laboratories, scientific research institutes and universities. We will promote technological upgrading and independent innovation in enterprises, speed up development of new- and high- technology industries and the equipment manufacturing industry, and promote the conversion of advances in new and high technology into actual production. We will support development of small and medium-sized enterprises and technological innovation. We will promote development of regional science and technology innovation systems and organic integration of enterprises, universities and research institutes.
9) A total of 123.662 billion yuan has been set aside for environmental protection, an increase of 19.632 billion yuan or 18.9%. A total of 49.5 billion yuan for energy conservation and emissions reduction, an increase of 17%, will be spent on retrofitting energy-conserving technology, retiring backward production facilities, increasing application of efficient, energy-conserving products and alternative-fuel vehicles, controlling and preventing water pollution in the areas around the Huai, Hai, Liao and Songhua rivers and Tai, Chao and Dianchi lakes, and developing the pipelines to complete urban wastewater and garbage treatment facilities and major emissions reduction projects in the central and western regions. We will improve the compensation system for the exploitation of coal and other mineral resources and the mechanism for compensation for damage to the ecosystem. We will promote development of new energy resources and renewable energy sources. Another 52.096 billion yuan will go to work on key projects such as those to protect natural forests, return farmland to forest and restore pasturage to natural grassland.
10) Expenditures for public security will total 116.131 billion yuan, an increase of 28.554 billion yuan or 32.6%. The funding mechanism for procuratorial, judicial and public security departments will be reformed to implement a policy of budgeting expenses according to the type of department, financial assistance for local procuratorial, judicial and public security departments, especially lower-level departments in the central and western regions, will be increased, a mechanism for regular increases in allocations for ordinary expenses will be set up and efforts will be made to strengthen public security and armed police forces and make them more informationized.
11) A total of 108 billion yuan has been earmarked to finance post-earthquake recovery and reconstruction. Another 14 billion yuan has been contributed from income from state capital operations, 5 billion from the state lottery fund and 3 billion from the central government's portion of land-use fees for new land for construction. All this adds up to 130 billion yuan in the central government fund for post-earthquake recovery and reconstruction, which will be used to build and repair housing and infrastructure, rebuild industry, and restore the ecosystem in the urban and rural areas hit by the earthquake in accordance with the plan.
12) Expenditures for national defense will total 472.867 billion yuan, an increase of 62.726 billion yuan or 15.3%. These funds will be used to improve the living conditions and benefits of military officers and enlisted personnel, render the army more informationized, increase the amount of equipment and support facilities by an appropriate amount, improve the ability of the army to respond to emergencies and disasters and support the repair and rebuilding of military infrastructure facilities in and around Wenchuan, Sichuan hit by the earthquake.
13) A total of 188.72 billion yuan has been set aside for transportation, an increase of 28.691 billion yuan or 17.9%. A total of 54.86 billion yuan will be spent on accelerating construction of the Beijing-Shanghai Expressway, trunk railway lines for developing resources in the western region, inland channels and feeder-line airports in the central and western regions. More funding will be given to building rural highways, assistance levels will be raised for ethnic minority areas, border areas and poor areas, and 54.8 billion yuan has been set aside for building or improving 300,000 kilometers of rural highways. A total of 16.842 billion yuan will be used to subsidize urban pubic transportation, rural passenger transportation and taxi services. Reform of taxes and fees for refined petroleum products will be carried out in 2009 and tolls are gradually and systematically being phased out on government-financed Grade II roads. After the reform, special subsidies from the central budget will be given for the expenses for repaying the costs of such roads and other expenses formerly derived from road tolls, which will increase transportation expenditures by a corresponding amount.
14) Spending on ordinary public services will total 131.361 billion yuan, an increase of 9.696 billion yuan or 8%. Through strict control of ordinary expenses and comprehensive use of surplus funds, the central government will spend 101.386 billion yuan on this item, a decrease of 4.629 billion yuan or 4.4%. A total of 29.975 billion yuan in assistance will be provided to local governments to award grants to personnel leaving the service to find employment on their own, prevent and control devastating geological disasters and strengthen inspection and protection of geological and mining resources, an increase of 14.325 billion yuan or 91.59%.
15) Expenditures to pay interest on government bonds will total137.185 billion yuan, an increase of 9.316 billion yuan or 7.3%.
Analysis of the above expenditure items shows that in 2009 the central government will spend a total of 728.463 billion yuan on education, medical and health care, the social safety net, employment, low-income housing and culture that are directly related to the people's wellbeing, an increase of 165.334 billion yuan or 29.4% in comparable terms. The central government has set aside a total of 716.14 billion yuan to help agriculture, rural areas and farmers, an increase of 120.59 billion yuan or 20.2%. This figure includes 264.22 billion yuan to support agricultural production, 123.08 billion yuan for direct subsidies to grain producers, general allowances for purchasing agricultural supplies and allowances for planting superior varieties and purchasing agricultural machinery and tools, 269.32 billion yuan for rural education, medical and health care, the social safety net, employment, low-income housing and cultural programs, and 57.62 billion yuan for expenses for stockpiling major agricultural products and paying interest associated therewith. Tax rebates and general transfer payments from the central government to local governments will total 1.378869 trillion yuan, which will be primarily used to improve the people's wellbeing and benefit agriculture, rural areas and farmers.