Full text: Report on China's central, local budgets (10)

Remarkable progress was achieved in maintaining and improving quality of life. Government spending on education increased to 4% of GDP in 2012 from 3.12% in 2007, which has greatly promoted education reform and development and led to the formation of an institutional basis for providing schooling to students from poor families. Government spending on medical and health care nationwide grew at an average annual rate of 29.3% and totaled 2.52 trillion yuan over the past five years. Significant progress was made in reforming the pharmaceutical and health care systems, and a medical insurance system that covers the whole population is emerging. Construction of government-subsidized housing picked up speed, with more than 18 million units of government-subsidized urban housing built and housing in run-down urban areas renovated nationwide over the past five years, making government-subsidized housing accessible to 12.5% of the country's urban households in 2012. The dilapidated houses of 9 million rural households were also renovated. We extended the old-age insurance system to all non-working urban residents and the rural population, with 130 million people aged 60 and over drawing a monthly pension. Greater support was lent to employment and business start-ups, a new social aid system was basically put in place, and the mechanism to increase social aid and social security benefits when consumer prices rise began to take shape. Steady progress was achieved in making public cultural facilities open to the public free of charge, development of the public cultural service system was accelerated, reform of the cultural administrative system proceeded across the board, and cultural programs and industries enjoyed sound development. The government successfully completed recovery and reconstruction work following the massive Wenchuan earthquake and major mudslide in Zhugqu; gave strong support to post-disaster recovery and rebuilding work following the Yushu earthquake; assisted in the fight against other major natural disasters; and ensured basic living conditions for the victims of disasters. Central government spending on maintaining and improving quality of life grew at an average annual rate of 21.1% and totaled 16.89 trillion yuan for the five-year period, which accounted for over two-thirds of total central government spending.

Impetus was given to adjusting the economic structure and balancing regional development. We strongly supported scientific and technological innovation; optimized the structure of government spending on science and technology, with the focus on supporting basic research and research on cutting-edge and generic technologies; and encouraged faster implementation of major national science and technology projects. We increased fiscal and tax policy support to strengthen agriculture, benefit farmers, and enrich rural areas. Over the past five years, central government spending on agriculture, rural areas, and farmers increased at an average annual rate of 23.5% to reach a total of 4.47 trillion yuan for the period, 2.92 trillion yuan more than the previous five-year period, which helped to balance urban and rural development. We supported the implementation of the plan for adjusting and reinvigorating ten key industries, helped accelerate the development of strategic emerging industries, established a sound fiscal and tax policy system to support the service sector, and introduced and improved fiscal and tax policies to promote sound development of small and medium-sized enterprises, especially small and micro-businesses. Solid progress was made in conserving energy, reducing emissions, and protecting the ecological environment, with government spending in this area totaling 1.14 trillion yuan nationwide over the past five years, an average annual increase of 24.1%. Sound mechanisms for subsidizing and rewarding grassland ecological conservation were also put in place. Transfer payments were constantly increased, with payments from the central to local governments growing at an average annual rate of 27.1% from 1.4 trillion yuan in 2007 to 4.03 trillion yuan in 2012. These funds mainly went to the central and western regions, ethnic minority areas, old revolutionary base areas, poor areas, main grain-producing areas, and key ecological zones. Following the redistribution of government funds through central government transfer payments, per capita government expenditure rose significantly in the central and western regions. This redistribution has strongly promoted the equalization of basic public services between regions, with the eastern region giving strong support to the development of the two regions.