A huge migration project to relocate 350,000 residents from poverty-stricken areas in Northwest China's Ningxia Hui autonomous region still faces obstacles such as a shortage of funds, senior regional officials have said.

Wang Zhengwei, chairman of the Ningxia Hui autonomous region, said the region plans to invest 10.8 billion yuan ($1.64 billion) in relocating villagers from poor areas in central and southern Ningxia.

"We will start the project after the two sessions. So far, the preparation of land storage, water system construction and part of the money are ready," he told China Daily during an exclusive interview after a meeting of the session of the National People's Congress.

"More than 40,000 people will be moved out this year," he said.

The project will be carried out in Xihaigu area, which includes an arid belt in central Ningxia and eight counties in the region's southern mountainous area.

The population relocation plan, or so-called "ecological migration project", started in the 1980s, and has so far moved 660,000 residents from inhospitable areas to more suitable land, according to the local government.

Wang said the local environment will recover in three to five years after local farmers move out, as "plow land can be gradually turned back to forests".

When asked about the biggest difficulty in this project, Wang said "the shortage of money".

"Of the 10.8 billion yuan, 50 percent will be supplied by the central government. So we need to raise the other half," he said.

Yuan Jinlin, director of the Ningxia commission of reform and development, the region's economic planner, said the regional government will raise 20 percent of the money, county governments will pay 20 percent and relocated households will pay 10 percent.

"According to the calculation, a migrant needs 30,000 yuan to complete the relocation," he said. "Migrants will gain new housing and jobs, and their children will get better education."

According to figures released by the local government's website, 1,655 villages in 91 towns are listed in the project, which plans to move 35 percent of the 350,000 people to better places in central and southern Ningxia, and the other 65 percent to northern Ningxia.

Yinchuan, the capital of Ningxia, will accommodate 78,000 people from the project in six counties of the city, said Wang Rugui, the mayor of Yinchuan.

To enable the migrants to enjoy better lives and bid farewell to poverty, Wang said the local government has made detailed arrangements to ensure every migrant family has at least "one greenhouse" and raises "two cows", and one member of the family has a job in the cities.

"The migration project is not simply a population move, but also a change from their traditional lives," he said. "The increase in income will help the migrants develop in a stable way and end a life of relying on the weather."

A survey, released by local media early this year, showed that some towns in the Xihaigu area have suffered drought in the past 10 years and annual family income is less than 2,000 yuan.

Ma Xifeng, who works on the project in Tongxin county, said on his micro blog that the poverty of local villagers was striking.

He recorded online that a woman has to share one pair of trousers with her husband, so when the husband goes to work she has to stay in bed.

Despite the poverty and drought, some local residents are still unwilling to move, due to their strong links with their hometowns and their concerns over making a fresh start in a new place.

Bai Shangcheng, mayor of Guyuan, a city in southern Ningxia that plans to move 230,000 people, accounting for two thirds of the total number of people to be relocated, told China Daily that they may face many problems and some "fierce conflict".

"We have fully prepared for solving every potential trouble. About 10,000 officials will be dispatched to persuade people and do related jobs," he said.

"For villages with a population of more than 500 residents, most of whom are Hui people, a mosque will be built in their new area," Wang said.

"For the children, it will be a worthy move because it will provide them with a better education," he said.