Urbanization important for farmers' income

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Last updated at: (Beijing Time) Tuesday, February 10, 2004

Urbanization important for farmers' income

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China is expected to see its urbanization rate grow by 1 percentage point each year in the coming decades as an increasing number of rural residents turn to non-agricultural work to earn better incomes and standards of living.

Chen Xiwen, deputy director of the office of the Central Financial Work Leading Group, said the number of Chinese rural residents leaving their land for cities reached 99 million at the end of last year, an increase of 5 million compared to last year.

"This number is till on the rise," Chen said at a news conference in Beijing on Monday.

By the end of last year, the country's urbanization rate stood at 39 per cent, earlier figures show.

"If efforts were made, China is capable of increasing its urbanization rate by 1 percentage point before 2020,'' Chen said.

Encouraging rural residents to work in cities and speeding up urbanization are important measures taken by the State to increase people's incomes.

Previous reports said income earned from city working accounted for about 70 per cent of rural residents' increased incomes each year.

The slow growth of rural residents' incomes has long been a headache for the central government, because it greatly affects the implementation of the demand-stimulating policy, Chen said.

"If consumption in rural areas cannot be stimulated, the full expansion of domestic demands, a strong engine for economic growth, will not be realized," he said.

Presently, Chinese farmers, who account for more than two thirds of the country's total population, contribute to only one third of the total consumption.

"The slow income growth will hinder the overall economic development and even undermines social stability," he said.

Last year, per capita net income earned by rural residents rose 4.3 per cent compared to a year ago to 2,622 yuan (US$315.9), figures from the National Bureau of Statistics indicate.

The growth was much lower than the 9.3 per cent income growth rate enjoyed by urban dwellers. The rate was also much lower than the year's economic growth rate of 9.1 per cent.

Realizing the urgency of raising rural residents' income, the Central Committee of the Communist Party of China and the State Council on Sunday issued a document for the first time in history on policies for boosting the growth in the income of rural residents, Chen said.

The document urges stronger support for grain production in major grain-producing areas to help raise the income of grain farmers, he said.

China is expected to produce 455 billion kilograms of grain this year, which will help narrow the demand and supply gap.

China's total grain production stood at 430 billion kilograms last year, while the demand was about 485 billion kilograms.

Chen said the grain price rise on the domestic market since last October was beneficial for increasing rural residents' incomes.

But the grain prices, rising between 10 to 20 per cent, were still lower than the price level in 1996.

"There is still room for further rational price rises," Chen said.

The government should allow the grain prices to resume their rational levels, he said.

According to Chen, the government will increase its central financing for agricultural development from 120 billion yuan (US$14.5 billion) last year to 150 billion yuan (US$18.1 billion) this year.

The money will be used to support "tax-for-fees" reforms, ecological and infrastructure construction and social undertakings such as education and sanitation in rural areas, he said.

In order to reduce the financial burdens on rural residents, the general level of agricultural tax rates will be cut by 1 percentage point this year and tax levies on special farm produce except for tobacco will be annulled.

Source: China Daily

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