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More Measures Needed to Narrow Rural, Urban Gap

To keep the issues of rural and agricultural development and farmers' income growth the top priority is crucial to creating sustainable development of the Chinese economy.

At a recent top-level meeting to analyze the current economic situation and plan for economic work next year, Chinese authorities made clear their resolution to further enhance agricultural and rural economic development and to promote growth in grain production and farmers' income.

The Chinese Government has taken a series of macro-control policies and measures to rein in excessive investment growth in some overheating industrial sectors this year.

Meanwhile, the agricultural sector has performed better than most people would have expected.

Not only has the country's summer grain output increased for the first time in four years, the whole year's target of 455 million tons now also appears within reach.

The bumper harvest bears full testimony to the effectiveness of supportive policies like agriculture tax reductions as well as direct subsidy for grain production.

A more important factor that underpins Chinese farmers' rising enthusiasm in grain production is that the government has refrained from stepping in to cap grain price hikes.

Though soaring grain prices have contributed significantly to the creeping inflation, policy-makers have resisted the attempt to intervene, allowing prices to genuinely imply the market's supply-demand situation.

So far, the country's grain prices have soared by about 30 per cent over the previous year.

As a result, for the first time in more than a decade, farmers' income growth is expected to exceed that of urban residents this year to narrow the development gap between rural and urban areas.

In comparison with the recovery of agriculture, excessive investment growth in some industrial sectors has drawn most of the attention from policy-makers.

A combination of administrative measures and market tools have enabled the government to quickly and effectively bring down excessive investment growth.

Central authorities have decided to continue to control investment on fixed assets by strictly controlling land and credit.

Such efforts are needed for the country's pursuit of steady and relatively fast economic growth.

But to address those underlying causes behind investment fever, the government needs to make efforts to deepen reform of the country's economic system.

Sustainable economic growth will entail bold market-oriented reforms in all sectors of the national economy.

(China Daily December 3, 2004)

China Pledged to Promote Coordinated Development Between Urban and Rural Areas
China to Increase Poverty Alleviation Efforts
Accuracy Urged in Producing Statistics on Rural Development
Beijing Tackles Enclaves of Poverty
Agricultural Tax to Be Phased Out
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