China sets up floating minimum living allowance system pegging rising prices

08:26, May 19, 2011      

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China has established a floating system of minimum living allowances for low-income groups in a bid to peg allowances to rising prices.

Local governments should take the basic subsistence costs, local Engle coefficient level or the expenditure-income ratio, into account when setting their own allowance standards, said a circular jointly issued by the Ministry of Civil Affairs, the National Development and Reform Commission, Ministry of Finance and the National Bureau of Statistics (NBS) on Wednesday.

The circular also asked government departments to adjust the allowance standards on a regular basis to suit the changes of the prices for necessities and the improvement of people's living standards.

The new rules are to be applied to the allowance system for low-income groups in both urban and rural areas in China.

Local plans of setting and adjustment of allowance standards, approved by local governments, should be published via websites, newspapers and other media to the public, the circular said.

Departments of province-level governments should also pay attention to close the gap of allowance standards among different areas and between urban and rural areas, or pilot a more unified standard in the region, the circular said.

China's consumer price index (CPI), a main gauge of inflation, rose 5.3 percent in April year on year, according to the NBS last week.

The rise came after the 32-month high of 5.4 percent in March, the NBS said.

"Though the current upward price trend in China was under control, inflationary pressures will remain high based upon domestic and international situations," said Sheng Laiyun, spokesman of the NBS, during a press conference.

In March, the Shanghai municipal government decided to increase the monthly minimum living allowance from the previous 450 yuan (69.2 U.S. dollars) per person to 505 yuan for urban residents. Monthly allowances for rural residents were also increased from 300 yuan to 360 yuan.

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