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Vice Minister of Finance Zhu Zhigang discussed the financial support required to build a new socialist countryside at a press conference yesterday saying that financial departments will lend their support to the drive under the principle of 'taking less and giving more, and loosening control'.

First, a mechanism to regulate the stability of financial support will be set up. Developing the rural areas will be a priority for the central government in terms of budget allocations. Zhu disclosed that the agricultural expenditure for this year's budget has been set at 339.7 billion yuan (US$42.21 billion), representing a 14.2 percent increase over last year's allocation, and 21.4 percent of total expenditure.

Second, agricultural tax is to be rescinded nationwide, which will save the country's 800 million farmers a total of 125 billion yuan (US$15.53 billion), or a per capita average of 140 yuan (US$17.4).

Third, subsidies relating to grain production, high-quality seed and agricultural machinery will be increased. For example, the direct subsidy for grain production in 13 major grain production areas for this year accounts for 50 percent of the risk fund, representing an increase of 1 billion yuan (US$124.25 million) from last year.

In addition, the government will beef up incentives in major grain production counties. The financial award for this year will be raised to 8.5 billion yuan (US$1.05 billion) as compared to last year's 5.5 billion yuan (US$0.68 billion).

Fourth, the government will increase investment in compulsory education in the rural areas. During the 2006-2010 period, central and local finance departments will combine forces to increase investment by 218.2 billion yuan (US$27.11 billion).

Also this year, primary and middle schools in the western regions will dispense with tuition fees and other miscellaneous charges. The policy will be enforced nationwide next year to realize compulsory education in all rural areas.

Fifth, healthcare benefits for farmers will be boosted with a development and consolidation of the rural cooperative medicare system. This year, rural areas in 40 percent of the counties will launch pilot cooperative medicare projects. The target for next year is 60 percent, with full coverage to be realized by 2008. This year's central financial allocation is 4.7 billion yuan (US$584 million), about seven times more than last year's allocation.

Sixth, the central government will spearhead an all-round reform policy including the reform of the village-level organizational structure, the rural compulsory education system, and the fiscal systems of counties and villages.

The press conference was organized by the Press Center of the ongoing Fourth Plenary Sessions of the 10th National People's Congress (NPC) and the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC).

(China.org.cn March 9, 2006)