Ladies and Gentlemen,

Good afternoon. Glad to meet you. As is known to all, to implement positive fiscal policies is a strategic decision made by the CPC Central Committee and the State Council in order to face up to the international financial crisis and keep steady and rapid economic growth. I am now going to brief you on the progress in the relevant work of this year.

I. Proactive fiscal policies have been put into practice smoothly.

1) To increase public investment by the government with focus on key construction projects. In 2009, the central government plans to invest RMB 908 billion in public facilities, and up by April 30, a total of RMB 518.9 billion, accounting for 57.1% of the budgeted figure, has been spent in key projects such as those concerning people’s welfare.

2) To push forward the reform of tax system and to implement a structural tax reduction. Efforts have been made to impose overall Consumption-type value-added tax, to further increase export refund rate for products such as textile and clothing, and to carry forward a series of policies on tax exemption and deduction launched last year. Preliminary statistics shows that structural tax cut in the first quarter has relieved enterprises and citizens of a total financial burden of about RMB 120 billion.

3) To increase the earning of low-income groups and to expand consumption demands. By April 30, RMB 111.6 billion has been allocated for the initial stage as direct subsidies to grain growers, comprehensive subsidies to farming, subsidies to good-quality seeds and to the purchase of agricultural machinery; RMB 27.447 billion has been allotted as subsidies for urban and rural low-income families; RMB 70 billion has been allotted to old-age pension insurance subsidies; pensions and subsidies worth RMB 9.85 billion was allotted for people of entitled groups who should enjoy preferential subsidies; RMB 9.067 billion has been allotted to rural and urban low-income citizens as one-time subsidies; basic old-age pensions have also been increased for retired staff of enterprises. Meanwhile, policies of subsidies to the purchase of home appliances and vehicles by rural citizens have been carried out nationwide.

4) To optimize the structure of fiscal expenditure and to safeguard and improve people’s livelihood. From January to April, there was RMB 245.421 billion spent on nationwide social security system and employment, up by 45.3% year on year; RMB 71.049 billion was spent on medical and health care services, up by 41.4% compared with that of the same period of last year; RMB 256.92 billion was spent on education, a year-on-year increase of 17.6%; RMB 24.709 billion was spent on culture, sports and media, up by 18.3% compared with that of the same period of last year.

5) To support scientific innovation, energy conservation and emission reduction, and to accelerate economic restructuring and shift of development mode. Methods such as advanced allotment of capital have been adopted to quicken the pace of major scientific and technological research projects. Studies have been carried out to explore feasible fiscal and tax supporting policies for industrial restructuring and rejuvenating. From January to April, RMB 35.016 billion was spent on science and technology projects, up by 38.4% compared with that of the same period of last year. For the top ten energy conservation projects, financial support will be rendered in the form of reward rather subsidies.

The above measures have played a significant function in promoting positive changes in economic operation.

II. Progress of financial supervision and examination has been pushed forward in a solid manner.

To intensify financial supervision and examination is a vital precondition for the implementation of positive financial policies, to which the Ministry of Finance has attached great importance.

1) To strengthen the leadership. Leading supervision and examination teams have been set up headed by the ministers of Finance. And a series of relevant documents have been issued.

2) To actively cooperate with the inspection teams from the central government. 24 cadres above the divisional-director level with excellent working performance from financial supervisory commissioner offices across the country have been randomly selected to join in the central inspection teams to different regions for inspection work.

3) To set up a surveillance mechanism covering the whole process. We have proactively participated in the organization, selection and application of projects with intensified pre-inspection. In addition, we have strictly examined the allotment of fund, and intensified inspection in the process. We have also organized special examinations and law-enforcement monitoring to enhance afterward inspection.

4) To conduct in-depth on-spot examinations, investigations and studies. The inspection teams, led by leaders of the department, went to places such as Beijing, Henan and Anhui to inspect and study the actual implementation of the newly invested projects by the central government.

5) To urge the rectification of problems found during the implementation. Special meetings have been convened to discuss the rectification of the problems discovered in the first round of inspection by the central inspection teams. Relevant provinces have been urged to complete the rectification ASAP.

Generally speaking, the relevant departments and project units of all regions have used the fund effectively in line with the laws and regulations regarding project management and usage of fiscal fund.

III. Measures on financial inspection and examination have been further intensified.

To deal with such problems as unregulated capital management and slow progress in implementation appearing in some projects, the Ministry of Finance will make specific countermeasures, further intensify inspection and supervision and improve our management.

1) To conduct the inspection in a strict manner, and establish a sound and comprehensive supervision mechanism. We will further strengthen the budget management, have stricter regulations on budget adjustment, carefully conduct each inspection procedure on the capital allocation and payment, and intensify examination and approval of financial settlement after completion of projects. Also, we will pay close attention to the destination and sources of investment, enhance procedure control, provide institutional guarantee and establish accountability system.

2) To give priorities to the important tasks, as well as intensify inspection & examination and policy research. We will conduct inspection and examination on key projects in important areas such as people’s livelihood. Meanwhile, we will carry out inspection and study on the implementation of major projects newly invested by the central government, on capital allotment in professional training, and on the policies of “offering subsidies to the purchase of household electrical appliances by rural dwellers” and “offering subsidies to the purchase of motorcycles and cars by rural dwellers” so as to ensure the implementation of these policies.

3) To tighten up “dual-base” management, and fully exert the function of fiscal inspection at grassroots level. Priorities should be given to the collection and management of basic data, and management facilities in all aspects need to be improved and perfected. We need to strengthen financial inspection at the grassroots level, fully exert the function of fiscal inspection organs, as well as make full use of the advantages of the financial inspection organs at the county level so as to enhance their capability of having on-site and close inspection on the projects.

4) To optimize coordination and cooperation, and make joint efforts in inspection and management. We will actively cooperate with the central inspection teams, explore feasible systems in information exchange and major-issue discussion among financial departments at all levels with discipline inspection, development and reform, and audit departments, so as to set up an highly efficient coordination system. In addition, we will improve and perfect the inspection and management network inside the fiscal system by fully mobilizing the efforts of all levels and expanding the covered areas. The supervision by the masses is sincerely welcomed, especially that by the media. Only in this way can we ensure transparent operation of the capital, and promote an effective implementation of all the fiscal policies for a steady and fast economic growth.

Thank you!