Total central government revenue in 2003 exceeded the projectedfigure by 52.4 billion yuan (after allowing for an additional 82.9billion yuan used in export tax rebates during the implementation of the budget). This surplus included 7.8 billion yuan from increased vehicle purchase tax, which was incorporated into the calculation of revenue and expenditures in the central budget and was funded for special purposes according to the relevant regulations. Another 7.8 billion yuan was used to increase tax rebates and general transfer payments to local governments in accordance with the relevant institutional rules. The final 36.8 billion yuan was used during the year mainly for combating disasters and providing disaster relief, developing education, health, and science and technology, supporting enterprise reforms,improving social security, and upgrading the ecological environment. The State Council has reported all this to the NPC Standing Committee. The revenue in excess of the projected figuresin local budgets was used by local authorities mainly to increase expenditures for education, science and technology, culture and health and to pay overdue wages and salaries.

    2. Finance played a greater role in macro-control and in safeguarding the economy.

    The government continued to follow the proactive fiscal policy to promote sustained and rapid growth of the national economy. Treasury bonds issued to finance projects totaled 140 billion yuan.While exercising strict management over these funds, we improved the orientation and structure of their use by giving preference torural areas, economic restructuring, the central and western regions, science and technology, education, improvement of the ecological environment and public health services. Transfer payments were increased to promote balanced development among different regions. General transfer payments from the central budget to local governments in 2003 totaled 191.2 billion yuan, 17.9% more than the previous year. Special transfer payments earmarked for social security, agriculture, science and technology,education, health and poverty alleviation amounted to 257.7 billion yuan, up 7.3% year-on-year. In response to the State Council's directive to improve fiscal systems at and below the provincial level, local governments continued to strengthen the abilities of primary-level financial authorities to provide adequate financial resources. To appropriately increase the incomes of employees in government departments and institutions, we steadily implemented the policy of adjusting the wages and salaries of their employees and the pensions of their retirees.

    The central authorities showed great concern for people's livesand enterprises' production and operations following the outbreak of SARS. First, 2 billion yuan was appropriated from the central budget to set up the Anti-SARS Fund, and a policy was clearly stipulated to provide free SARS treatment for rural and impoverished urban patients. This played a vital role in effectively curbing the spread of the outbreak, particularly to the countryside. Financial authorities at all levels allocated a total of 13.6 billion yuan for SARS prevention and treatment, including 2.8 billion yuan from the central budget. The central government appropriated an additional 1 billion yuan to improve the public health system in the second half of the year. Second, we promptly introduced a range of preferential fiscal and tax policies to aid industries hard hit by the SARS outbreak, such as tourism, food and beverage service, civil aviation, railways, hotels and taxis, so that they could tide over difficulties to resume normal operations as soon as possible. Although the above-mentioned measures increased expenditures and reduced revenue, they protected the health of the people, ensured the normal operations of enterprises and promoted economic and social development.

    3. New steps were taken to solve the problems facing agriculture, rural areas and farmers.

    First, overall progress was made in the trial reform of rural taxes and administrative charges. The trial was extended from 20 provinces to the whole country, reducing the burden on farmers by over 30% on average. The central government earmarked a total of 30.5 billion yuan in 2003 to support this reform. Financial authorities at provincial level, as well as those at the city and county levels with adequate resources, also provided some funds tosupport the reform. Second, we accelerated the pace of repealing the tax on special agricultural products on a trial basis. The taxwas by and large rescinded in a dozen provinces and municipalitiesdirectly under the central government, including Beijing, Fujian, Guangdong, Jiangsu, Zhejiang, Anhui, Sichuan, Henan, Shanghai and Tianjin. Third, the trial of providing subsidies directly to grainproducers was implemented in the provinces of Anhui, Jilin, Hunan,Hubei, Henan, Liaoning, Hebei and Jiangxi and in the Inner Mongolia Autonomous Region. The trial promoted the reform of grainenterprises, and also won the heartfelt support of farmers in trial areas and boosted their enthusiasm for grain production. Fourth, we implemented the policies of reducing or exempting agricultural taxes for crop failures due to natural disasters and of compensating areas designated for flood storage and retention. Funds were promptly appropriated to combat natural disasters and provide disaster relief. The central government allocated 10.8 billion yuan in 2003 to help various localities combat natural disasters, provide disaster relief and fund reconstruction after disasters, and 167 million people in disaster-afflicted areas received timely government relief. Fifth, we vigorously pressed forward with agricultural restructuring to help farmers increase their incomes. In 2003, the central government allocated 44 billion yuan, a year-on-year increase of 13.9%, to support progress in agricultural science and technology, develop the quality and safety system for agricultural products, fund comprehensive agricultural development and promote development-oriented programs for alleviating rural poverty. Sixth, the central government increased expenditures by 6.7 billion yuan on education, health and culture. They mainly went to rural areas to promote the development of social undertakings there.