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Sixth, we will develop a new mechanism to fund efforts to alleviate poverty through development. Allocations to fight poverty will total 14.4 billion yuan, an increase of 700 million yuan over the total for 2006. We will review and improve our work in the trial of setting up mutual assistance development funds to help poor villages. Based on the results of the trial, we will actively seek ways to set up an incentive distribution mechanism for poverty alleviation funds and a mechanism for determining the eligibility of counties for funds to make poverty alleviation through development work more effective.

Seventh, we will support the development of cultural programs in rural areas. The central government will allocate 17.3 billion yuan to support culture, sports and mass media, an increase of 4.713 billion yuan or 37.4% over 2006. It will allocate 2.5 billion yuan to speed up implementation of the project to extend radio and TV coverage to every village and increase the number of localities able to receive central government radio and television programming through transmission facilities rather than cable, and resolve the problem rural residents have of poor or non-existent radio and TV reception in some areas. We will energetically work on the project to set up a shared national cultural information and resource databank and bring digital film projection to the countryside, focusing on the village level.

Eighth, we will deepen reform of the rural financial system. The central government will allocate 1.956 billion yuan for inflation-proof interest subsidies to rural credit cooperatives in selected areas to deepen reform of rural credit cooperatives. One billion yuan will be allocated to subsidize agricultural insurance premiums. A number of major agricultural provinces that already have a relatively good foundation of agricultural insurance will be selected for trials of policy-based agricultural insurance. In addition, we will step up efforts to rearrange agricultural support funds, place greater emphasis on giving full play to the role of government funding in encouraging rural residents and society to put more money into rural development, and accelerate the development of a mechanism for ensuring steady growth in funding from various sources for the building of a new socialist countryside.

3. We will promote innovations in mechanisms and policies to make education more available and affordable. Education greatly influences the direction a person's life takes, has a bearing on innumerous households, benefits future generations and is closely related to the country's future. Central government allocations for education in 2007 will total 85.854 billion yuan, an increase of 25.249 billion yuan or 41.7% over the amount of 2006.

First, we will extend reform of the system to guarantee funding for rural compulsory education nationwide. On the basis of consolidation of reform achievements in the western region, the reform will be extended to the central and eastern regions in 2007,enabling the 150 million rural primary and middle school students receiving compulsory education across the country to be exempt from tuition and miscellaneous fees and raising the level of guaranteed public funding for operating expenses of rural primary and middle schools providing compulsory education. In addition, students from poor families will receive free textbooks and boarding students will receive living allowances. A total of 27.98billion yuan has been earmarked in the central budget for this purpose. We will continue to support pilot programs to attract exemplary teachers to work in rural primary and middle schools providing compulsory education and to build new schools with improved sanitation facilities in the new countryside. We will work out a plan to implement a system of guaranteed funding for compulsory education in urban areas. Second, we will establish a comprehensive policy package to assist students from poor families. We will establish a sound system of national scholarships and tuition assistance for regular undergraduate institutions, vocational colleges and secondary vocational schools and institute free education for students majoring in education in teacher colleges directly under the Ministry of Education. The central government has set aside 9.51 billion yuan in 2007 to expand the number of policy beneficiaries and increase the level of assistance. We will try our best to establish a systematic, scientific, fair and efficient system of policies to assist students from poor families during the Eleventh Five-Year Plan period to provide the institutional guarantee that basically all students from poor families can attend school and to promote equal opportunity in education. The focus of policies will also be sharpened by putting more emphasis on the central and western regions, rural areas, vocational education and disciplines whose graduates the country needs the most. These moves are designed to adjust and improve the educational structure, produce personnel with the diverse array of talents and skills required by society, guide and promote employment, and avoid having too many candidates fighting for the same jobs. All these policies and mechanisms show that China is now working to set up a sound policy framework to guarantee funding for education, starting by strengthening the basic link of compulsory education and helping the population of needy students. This approach will prove to be amore effective way to solve the serious problem of inadequate and unaffordable education. The central government is also strongly supporting efforts to develop vocational education and improve the quality of higher education.

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