4. We will increase support for scientific and technological innovation, energy conservation and emissions reduction.

We will promote scientific and technological innovation. A total of 14.76 billion yuan, an increase of 24 percent, has been allocated to increase investment in basic research and research in new and high technology. Support for scientific research by nonprofit organizations will be steadily increased. We will support the development of major science and technology infrastructure and national and key national laboratories and make greater use of the role of national bases for scientific research. We will carry out trial programs to closely integrate industry, education and research and develop a technology innovation system. We will ensure smooth progress on major scientific and technological programs. We will support the development of an industrial technology innovation system for modern agriculture. We will provide support for invigorating the domestic major equipment manufacturing industry. We will promote the development of nonprofit and strategic state industries. We will encourage venture capital investment in business startups and support technological innovation in small and medium-sized science and technology enterprises. The scope of enterprises eligible to receive special development funds will be expanded.

We will support energy conservation, emissions reduction and ecological improvement. Allocations from the central budget for energy conservation and emissions reduction total 27 billion yuan, an increase of 3.5 billion yuan. We will substitute rewards for subsidies and support the ten major state energy conservation projects, the building of sewage pipe networks in the central and western regions, and the development of a system for monitoring and supervising emissions reduction and pollution. We will set up a mechanism for closing down backward production facilities. Appropriate assistance and rewards will be provided from the central budget to economically underdeveloped regions. Investment in water pollution control will be increased in the important watersheds of the Huai, Hai, Liao and Songhua rivers, and Tai, Chao and Dianchi lakes. We will implement fiscal and taxation policies to encourage energy conservation and emissions reduction. Investment in projects and special equipment that meet specified environmental conditions, such as being energy-saving and environmentally friendly, will be eligible for corporate income tax reduction or waiver for a set period of time or will be allowed a corporate income tax deduction. We will implement a policy of mandatory government procurement of energy-saving products. VAT on the purchase of equipment that saves energy and reduces emissions will be discounted. We will improve the favorable tax and fee policy for the comprehensive use of scrap and other recyclable materials and resources. We will improve the fiscal and taxation policies for promoting the development of new and renewable energy resources. We will promote the reform of the system of paying for the use of mineral resources, establish a reserve fund system for the sustainable development of resource-based enterprises, gradually set up a sound mechanism for paying compensation for ecological damage, and run trials of a scheme for trading pollution rights in the Lake Tai watershed area. We will support the implementation of the national plan to deal with climate change. On the basis of improving the policy on reforesting farmland, we will support the development of key forestry projects and the protection of key public forests. We will improve the central government system for funding ecological conservation in forests and steadily promote reform of the system of collective forest rights and the management of state tree farms.