Third, vigorous support was provided for the reform of SOEs and the banking system. A total of 21.9 billion yuan was earmarked in the central government budget for 2005 to support policy-based closure or bankruptcy of 116 SOEs and arrangements for 550,000 laid-off employees. Work to relieve the second group of 74 enterprises owned by the central government of the obligation to operate social programs proceeded smoothly. We supported the reorganization, restructuring and debt-to-equity swap for SOEs, promoted reform of the postal service and industries such as electricity, telecommunications, railway, and civil aviation, and introduced preferential tax policies to support corporate reorganization, restructuring, and debt-to-equity swap and efforts to relieve enterprises of their obligation to operate social programs. We instituted export tariff measures to adjust the mix of export textiles and defuse trade tensions and supported the strategy of textile firms to go global. We supported reform and innovation in the banking industry, focusing on support for the financial reorganization and restructuring of the Industrial and Commercial Bank of China, the Bank of China, the China Construction Bank and the Bank of Communications to convert them to listed companies. We tightened financial management of the four asset management companies of China and formulated and implemented preferential tax policies to stimulate development of the insurance, securities and other capital markets. The central government appropriated 2.931 billion yuan to subsidize the interest on inflation-adjusted savings deposits in order to support the efforts of 29 provinces, autonomous regions and municipalities directly under the central government to deepen the reform of their rural credit cooperatives.

Fourth, we promoted reform of the housing system. We further improved the system for managing accounts of government and private matching funds for housing, and adopted tax policies to curb speculation in the housing market, leading to basic stability in housing prices and sound development of the real estate industry.

6. Administering public finance in accordance with the law and tightening financial oversight and management. On one hand, we paid close attention to handling financial affairs in accordance with the law, standardizing management, exercising strict oversight and improving the legal framework for the administration of public finance in all our financial work, and constantly strengthened internal oversight of public finance. On the other hand, we followed up on the relevant decisions of the NPC and the comments from auditing authorities by first carefully analyzing and studying them and then taking improvement measures.

First, improvements were made in the laws and regulations for public finance. We put into practice the Program for Implementing All Aspects of Law-Based Administration in Accordance with the Law formulated by the State Council, fully implemented the Regulations on Penalties and Sanctions for Illegal Fiscal Acts, and formulated the Guidelines for Financial Departments on Promoting All Aspects of the Administration and Handling of Financial Affairs in Accordance with the Law. We drafted or revised major financial laws and regulations such as the Budget Law, the Law on Transfer Payments, the Basic Law on Tax Collection, and the Regulations for Implementing the Law on Government Procurement. We combined implementation of the Administrative Approval Law with a review of all financial items requiring administrative examination and approval, eliminating 39 items and streamlining the process for 6 others.