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Rural-urban Divide Targeted for New Round of Reform

The major reform for rural areas unfolded by the top leadership on Sunday aims to bridge the yawning urban-rural gap and spur growth amid a domestic and global economic slowdown, experts have said.

The Communist Party of China Central Committee ended a key four-day plenum meeting on Sunday, approving a decision on major issues concerning rural reform and development, the Xinhua News Agency reported.

No details were given but reports suggested major considerations were given to make it easier for farmers to transfer or rent out their land management rights, and to bridge the institutional difference that now divides the people into urbanities and rural residents in the country.

A farmer harvests grain in Helan County, Ningxia Hui Autonomous Region, on Thursday October 9, 2008. As part of a decision made at the close of the third Plenary Session of the 17th Communist Party of China Central Committee on Sunday in Beijing, the country set a goal to double per capita income of rural residents by 2020, from this year. Last year's level was 4,140 yuan (US$606). [Xinhua]

Wang Xiaolu, deputy director of the National Economic Research Institute under the China Reform Foundation, said the policies highlighted the top leadership's efforts to reduce the widening urban-rural wealth gap and tap the vast rural market.

While the market reforms have led to spectacular economic growth in the world's most populous nation, the widening wealth gap has distanced the country's 800 million farmers from the increasingly prosperous urban areas, hindering social stability, Wang said.

The per capita urban income has become more than three times of that of the rural residents, the biggest since the opening up and reform policies were launched 30 years ago, latest official statistics showed.

Li Xiaoyun, an expert in rural studies with the Chinese Agriculture University, said the low income of rural residents has become a bottleneck to domestic demand and has impaired a safe economic structure.

The country's export-reliant economy has endured a slowdown with rising labor costs, a rising yuan and a gloomy international market.

It is the "right time" to promote rural reform and development after decades of unbalanced development with major input going to cities but less to rural areas, Li, also dean of the School of Humanities and Development, said.

"To invest in the vast potential market of the rural areas is to invest in speeding up the whole economy," Li said.

Experts said the rural focus of the ruling Party meeting is also a nod to the policies initiated in 1978.

In 1978, China adopted collective land ownership for 750 million rural residents, according to which villages or townships assumed land ownership. Households managed land, usually on a small scale, for 30-year periods through contractual agreements with village or township communities.

The system has liberated rural households from the highly concentrated land ownership system but is said to have failed to meet residents' income and productivity aspirations.

According to Li, the key to rural reform is to continue reforming land policies, which shoulder the dual responsibility of safeguarding the food security of the vast population and acting as the main source of income for rural residents.

"The new policies should insist on collective land ownership but grant the farmer longer terms of land rights management and freer trading of land management rights to ensure a stable land transaction market and liberate farmers bound to their land," Li said.

(China Daily October 13, 2008)

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