China will put more investment, subsidies, fiscal and policy supports into rural areas this year so as to better coordinate urban and rural development, the central government said Sunday in its first policy document of the year.

"Working for coordinated development between urban and rural areas is the fundamental requirement of building a moderately prosperous society in an all-round way," said the document.

The document, jointly issued by the Central Committee of the Communist Party of China (CPC) and the State Council, or the Cabinet, promised to improve the livelihood of rural residents, which it said is one of the main tasks in China's efforts to adjust resident income distribution system.

Expanding rural demand should be the key measure in boosting domestic demand, it said, while developing modern agriculture should be considered as a major task in transforming China's economic growth pattern.

It called for more efforts to maintain grain production, increase of farmers' income and good development momentum in rural areas.

Improving policy, strenghenning financial support to rutal areas

The document said that the central government would continue to improve the policy system to empower and benefit farmers. The government would also continue boosting financial input into the agriculture and rural areas.

The document stressed budget expenditure should first support development of the agriculture and rural area, and fixed-asset investment first be channeled into agricultural-related infrastructure and projects in relation to rural livelihood.

More subsidies should be channeled to increase the output of grain, potato, highland barley and peanut, as well as the purchase of agricultural machinery, it said.

The government would implement more policies for purchasing and stockpiling major agricultural products, including corn, soybean and oilseeds, to stabilize prices of major farm produce.

More efforts will be made to strengthen financial services including micro-credit loans and insurance service in rural areas, according to the document.

It promised that basic banking services would be available in all villages and towns in the next three years.

It called for more efforts to develop township banks, loan-lending companies, and mutual funds in a bid to guide more capital flowing into the rural financial market.

The central government also demanded further expansion of rural consumption market as part of the country's accelerating measures to boost consumption.

More resources to rural areas

In a bid to narrow the development gap between the urban and rural areas, the document said the central government would roll out more favorable policies to encourage inputs from various social forces to the rural regions.

Enterprises which establish rural welfare foundations would enjoy tax breaks, with no more than 12 percent of their annual profits being deducted before calculation of enterprise income tax.

Large and medium-sized cities, and various sectors should give an impetus to the rural areas' development, providing one-to-one support and participating in industrial development and infrastructure construction in rural areas, according to the document.

It also urged related departments to study favorable policies to guide more educational resources and scientific research institutions to tap into the country's vast rural regions.

To ease the chronic financing shortage in the rural areas, the government required financial institutions, including the Agricultural Bank of China, Rural Credit Cooperative, and Postal Savings Bank of China, to further increase agriculture-related credit loans. Agricultural Development Bank of China was ordered to expand the supporting fields in agriculture, and give more long-term credit support to the infrastructure construction in rural regions.

Pormoting innovations

The government vowed to promote modernization of agriculture by improving technological innovation to serve the purpose of maintaining stable grain production.

Focus should be put on cultivation of improved varieties and support be given to programs related to the trans-genic variety cultivation and agricultural mechanization, in a bid to boost the upgrading of the traditional agriculture.

More efforts should be made to raise the per unit yield and quality of grain while stabilizing the current planting areas, said the document.

The government also vowed to increase input in irrigation, land reclamation and soil improvement, to build more high-yield farmland.

Subsidies to the major grain-producing counties were expected to be raised in a bid to promote production, according to the document.

It also called for efforts to boost production of oil crops, cotton, and sugar crops, to optimize the structure of agriculture products.

(Xinhua News Agency January 31, 2010)