| China pledges to take countryside as priority in infrastructure investment next year, in order to initiate the premier strategy of building a "socialist new countryside" for the coming five years.
According to the just-closed annual central work conference on rural development, rural construction will claim a higher share in national debts and financial budgets in 2006, with more money to be spent on the improvement of living conditions in the countryside.
"This is the first time for the central authorities to promise to invest so heavily in rural development, with the focus on infrastructure" said Han Jun, an expert of rural research with the Development Research Center under the State Council.
Government spending has been the major source of infrastructure construction in urban areas. statistics by the People's Bank of China showed that investment in China's top ten metropolis accounted for 30 percent of China's total investment, much higher than the proper ratio of 15 percent suggested by the World Bank.
On the other hand, farmers have to dig down their own pockets for infrastructure in rural areas. In 2005, the central government spending in rural areas is expected to total 29.3 billion yuan (3.03 billion U.S. dollars), less than 1 percent of the fiscal income. Currently, half of China's villages do not have running water.
Besides, former investment in rural areas mainly focused on macro-projects like riverbank construction, and failed to directly benefit the farmers for most of the time.
To narrow down the increasing gab between urban and rural areas, the Chinese government decided to "let the sunlight of public finance shine in the countryside", to promote construction of road, water, electricity and other infrastructure in rural areas.
Experts with the State Development and Reform Commission predicted that to build basic infrastructure in rural areas across the nation will cost at least 4 trillion yuan (495.66 billion U.S.dollars). Therefore, other fund sources are needed to explore besides government spending.
Tang Min, chief economist of Asian Development Bank in China, said that reform of rural financial system is as pressing as investment in rural economic development and the improvement of the farmers' life.
Farmers are hard to get loans due to out-of-date financial mechanisms. Government statistics show that at least 200 billion yuan (24.78 billion U.S. dollars) worth of funds are drawn from the rural areas by the financial entities every year. |
