Also introduced in the work report, this year will witness the creation of a new government-subsidized medical insurance program to cover urban residents that fall outside of the urban employee medical insurance plan. The new program, which will cover juveniles and adults out of the labor market among the urban population for the first time, will provide people with security against major diseases and offer government subsidies to disadvantaged groups.

Speaking at a press conference on March 11, Vice Minister of Labor and Social Security Liu Yongfu, said the new medical scheme for urbanites would be put in place during the 11th Five-Year Plan Period (2006-10). That means 2010 will be the deadline for the medical care coverage for the total population of China.

Another groundbreaking policy introduced in the work report was a plan to set up a minimum living allowance system for rural residents, for which Central Government has earmarked funding of 3 billion yuan in 2007. Vice Minister of Civil Affairs Li Liguo said at a March 11 press conference that the system was expected to come into place in the first half of the year. A total of 30 million farmers are expected to benefit from the minimum living allowance system this year.

Along with the urban subsistence allowance system, which was initiated in 1997, the whole population of China will be included in the subsistence allowance system in 2007. By the end of 2006, urban residents receiving subsistence allowance had reached a total of 22.41 million, at an average monthly standard of 169.6 yuan per month.

In outlining economic statistical goals for 2007, Premier Wen Jiabao said China plans to create 9 million new jobs in cities and townships in 2007 and keep the registered unemployment rate in cities and townships below 4.6 percent. The two figures for 2006 are 11.84 million and 4.1 percent respectively. Although the goals for 2007 are relatively conservative, they are based on a recognition of mounting pressure in China' employment market. Statistics from the Ministry of Labor and Social Security show that as many as 24 million new jobseekers are expected in cities and towns across China this year, including an unprecedented stock of 4.95 million new graduates.

To guarantee completion of all these goals, the government has allocated 201.9 billion yuan for social security and employment promotion from the central budget in 2007, which is an increase of 13.9 percent on 2006.

Still not enough money

According to Wang Yingfan, a deputy and a retired diplomat, "For the time being, the development gap between western areas and eastern areas has been enlarging rather than narrowing, which should be addressed by concrete measures. The budget report has failed to invest enough money into improving rural areas and people's livelihood." He suggested that the treasury budget should lean further to under-developed areas and disadvantaged social groups.

Lack of quality educational and medical resources in rural areas were the most complained about issues among deputies at the NPC session. The main reason, they said, was that talented people were unwilling to work in rural areas.

"If a student from a rural area is admitted to an agriculture-related major at a university or admitted by a college of agriculture, the state should pay all their tuition fees as long as he or she would come back to work in a rural area," said Chen Zemin, a deputy and founding president of a private frozen food company. "To encourage university graduates to work in rural areas, the government should pay them salaries to make sure they can earn more than from working in cities."

A large number of rural hospitals and schools are running on debt due to insufficient subsidies from local county-level or township-level governments, which might also be running on debt. A prevalent social problem in these areas is that staff in hospitals and schools are poorly paid and sometimes do not even receive their pay on time.

Many deputies suggested that the central treasury should write-off the educational debts of rural areas, raise the salary level of medical staff and teachers working in them and write their salaries into a treasury budget plan.

Many of the government's plans are aimed at reducing China's wealth, or standard of living gap. Speaking at the press conference during the NPC session, Ma Kai, Chairman of the National Development and Reform Commission, said everyone in the country could feel a rise in their living standards. However, he admitted that income gaps are still wide between different geographical regions and between urban residents and rural residents, with a fairly chaotic income distribution system and a significant black market in operation. "But it is no more than a problem of progress and growing pains," he added.