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More capital from various sectors of society is expected to flow into China's rural areas in the future to meet the demand for rural development, said a Chinese expert.

Thursday's Economic Daily, quoting Han Jun, an expert of rural research with the Development Research Center under the State Council, said the Chinese government is exploring ways to fund the gigantic strategy of building new socialist countryside, and more capital from various sectors of society will be encouraged to flow into the rural areas.

Han urged the government to speed up reforming the rural financial system so as to create a favorable environment for capital from various sectors of society to be used in agriculture and rural areas.

The government should establish a mid-and long-term supporting mechanism to attract capital from various sectors of society to be used for rural development by issuing some favorable financial policies, said Han.

In addition, Han agreed with the government's decision to ensure profits from farmland acquisition will be used for rural development.

According to Han, the Chinese government has decided that all additional governmental financial support to education, health care, culture and basic infrastructure this year will be mainly directed to rural areas.

Han urged specific policies on land acquisition should be made as early as possible. In addition, he suggested more non-agriculture land in the rural areas should be allocated to rural collective communities to ensure rural residents gain directly from their land resources.

Currently, governmental financial support is the major capital source for China's rural development. China set a budget plan of 103 billion yuan (US$12.875 billion) this year for the rural tax reform, in which about 78 billion yuan are sponsored by the central government.

But Han said though Chinese government is increasing input to the rural areas year by year, the country's average financial support from the government is still at a low level.
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(Xinhua News Agency March 27, 2006)