New Banks

China will allow private investors to establish rural commercial banks to inject more funds into the countryside and boost rural development, according to the China Banking Regulatory Commission.

Private investors have long been shareholders in rural commercial banks, but they have not been

allowed to start them.

The commission said that China is committed to financial innovation in rural areas to better serve agricultural development.

China had set up a variety of small and medium-sized financial institutions in rural areas by the end of 2013, including 468 rural commercial banks, 1,803 rural credit cooperatives and 1,071 village- or town-level banks.

Price-Linked Aid

Low-income people in China will receive government help if inflation is too high and lasts too long, according to a joint statement released by five ministries.

Local governments should link social assistance for low-income residents with the consumer price index (CPI), a key gauge of inflation, said the document. It was jointly issued by the National Development and Reform Commission, ministries of civil affairs, finance, human resource and social security, as well as the National Bureau of Statistics, on January 31.

Temporary help will be given to the needy when CPI rises 3 to 4 percent or the grain price increases by 10 percent on a year-on-year basis for three consecutive months. Local governments should set the threshold according to regional conditions.

The mechanism will be managed by provincial- or city-level governments and the amount will be calculated monthly and distributed quarterly, the document said.

It added that the subsidy will be included in local governments' fiscal budget and the Central Government will enhance financial support for the low-income community.

Coal Liquefaction

China's first direct coal-to-oil project, operated by the country's leading coal producer, Shenhua Group, produced 866,000 tons of oil products last year.

The direct coal liquefaction line is located in Ejin Horo Banner of Ordos, Inner Mongolia Autonomous Region. It produces 3,000 tons of oil products with consumption of nearly 10,000 tons of coal per day, said Shenhua Coal Liquefaction and Chemical Co. Ltd.

With an investment of 12.6 billion yuan ($2.06 billion), Shenhua Group began construction of the project in 2004, using self-developed technologies.

The project began trial production at the end of 2009 with an annual design capacity of 1.08 million tons of diesel, naphtha and liquefied petroleum gas.

Proven coal reserves around Ordos are estimated at 160 billion tons, or 11.4 percent of the country's total coal reserves.

As part of its clean energy strategy, China has launched a number of direct or indirect coal liquefaction and coal gasification projects in Inner Mongolia, Shaanxi, Ningxia, Xinjiang and Liaoning in the past three years.