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3. Deepening economic restructuring and opening China further to the outside world. Trials of comprehensive rural reform were carried forward. Significant progress was made in introducing a shareholding system in state-owned commercial banks and in reforming rural credit cooperatives. Reform of the shareholder structure of listed companies made steady progress. Reform of the mechanism for setting the Renminbi exchange rate was implemented smoothly. Introduction of a modern corporate structure in state-owned enterprises was accelerated. A total of 21.9 billion yuan was allocated by the central government to subsidize the policy-based closure and bankruptcy of 116 state-owned enterprises. The work of relieving enterprises of their obligation to operate social programs continued. Reform in the areas of public finance, tax, investment and pricing was deepened. Reform of the postal service system was initiated. Further progress was made in the reform of the railway and civil aviation systems. Policy measures were adopted to encourage, support and guide the growth of the non-public sector of the economy. Breakthroughs were made in reforms in some major areas.
We actively addressed new issues arising in the course of opening China to the outside world. The structure of foreign trade was improved by adjusting policies concerning export rebates, tariffs and processing trade. The export rebate mechanism was improved. Steady progress was made in opening the service sector to foreign competition. Overall arrangements were made for work after the transition period following China's entry into the WTO.
4. Accelerating the development of social programs. The central government spent 116.8 billion yuan in 2005 on science and technology, education, health and culture, an increase of 18.3 percent over the previous year. In addition, 9.54 billion yuan from the sale of treasury bonds was spent on these items.
In science and technology, we improved the national innovation system and strengthened basic research and infrastructure development. Important progress was made in major R&D projects, including those to design and develop advanced integrated circuit chips, third-generation mobile communications, high-performance composite materials, and high-grade, digitally controlled machine tools. Under the leadership of the State Council, we formulated the Outline of the National Long- and Medium-Term Program for Scientific and Technological Development based on two years of in-depth research and extensive deliberation during which the views of all concerned parties were solicited.
In education, we focused on strengthening compulsory education, especially in rural areas. Over 7 billion yuan was allocated by the central and local governments to pay tuition and miscellaneous fees, provide free textbooks, and subsidize room and board for 17 million students from poor families in 592 designated poverty-stricken counties. Free textbooks were also provided to over 17 million students from poor families in the central and western regions. As a result, many students who had dropped out of school were able to continue their studies. We continued to implement the plan to make nine-year compulsory education basically universal and to basically eliminate illiteracy among young and middle-aged adults in the western region. We built, renovated or expanded over 2,400 boarding schools in rural areas and provided distance learning equipment for 160,000 rural primary and secondary schools and learning centers over the past two years. Vocational education was further improved, and higher education continued to develop.
In health, we put great effort into improving the public health system and rural health care work. Over the past three years, the central and local governments spent 10.5 billion yuan to basically complete establishment of a disease prevention and control system that operates at the provincial, city and county levels. A total of 16.4 billion yuan was spent on setting up a medical treatment system for public health emergencies, and work is proceeding smoothly. The central government spent 3 billion yuan from the sale of treasury bonds to support the establishment of health clinics in towns and townships in the central and western regions, thus improving public health and medical treatment conditions there. Trials of a new type of rural cooperative medical care system were extended to 671 counties with a total of 177 million rural residents. We intensified efforts to prevent and treat major diseases such as AIDS and gave high priority to the prevention and control of highly pathogenic avian influenza, keeping it from spreading and infecting people. Progress was made in population work and family planning.
In culture, we launched a trial reform of the cultural system, upgraded culture-related facilities for public use, implemented the project to share cultural information, and increased cultural exchanges with other countries. Further successes were achieved in the country's athletic endeavors. Greater efforts were made to promote socialist cultural and ideological progress.
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