Monday 2 February 2009
China’s Government Warns 2009 to be “the Toughest” Year since 2000
The lingering global financial crisis and the slowdown of the world economy had exerted an increasingly negative impact on the Chinese economy, said the first document of the year issued jointly by the State Council and the Central Committee of the Communist Party of China.
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China’s Government Warns 2009 to be “the Toughest” Year since 2000
1 February 2009
• China’s government Sunday warned 2009 will be “possibly the toughest year” since the turn of the century.
• “The development of agriculture and rural areas in 2009 is of special significance,” said the 1st document.
• Local and central government departments are urged to adopt measures to create jobs, increase rural incomes.
BEIJING, Feb. 1 (Xinhua) -- China’s government Sunday warned 2009 will be “possibly the toughest year” since the turn of the century in terms of securing economic development and consolidating the “sound development momentum” in agriculture and rural areas.
The lingering global financial crisis and the slowdown of the world economy had exerted an increasingly negative impact on the Chinese economy, said the first document of the year issued jointly by the State Council and the Central Committee of the Communist Party of China.
“The development of agriculture and rural areas in 2009 is of special significance,” it said.
“The biggest potential for boosting domestic demand lies in rural areas; the foundation for securing steady and relative fast economic growth is based upon agriculture; the toughest work of securing and improving people’s livelihoods stays with farmers.”
In the document, the sixth of its kind to address rural problems since 2004, the government urged authorities to take resolute measures to avoid declining grain production and to ensure the steady expansion of agriculture and rural stability.
MORE FISCAL INPUT
The document promised increased government input.
This year’s budget for agriculture and rural development is to be disclosed at the annual national legislative meeting scheduled in March, but the document said more investment would come from fixed assets investment, treasury bond issues and revenue from higher land use taxes.
Last year, the budgeted investment in agriculture and rural development grew 37.9 percent year-on-year to 595.55 billion yuan.
As of 2009, capital-stretched county governments in central and western areas would no longer provide counterpart funds for public utility construction bankrolled by central finance involving ecology, reservoir renovation, potable water supply and irrigation.
Government-sponsored investment corporations and industrial development funds for agriculture could be established when conditions were mature, it said.
Subsidies would be extended to cover not only all farmers who grow rice, wheat, corn and cotton this year, but also some who plant rape and soybeans. Purchases of energy-efficient machinery by farmers and stock-breeders would also be subsidized.
To improve the scale and quality of livestock and aquatic stockbreeding, the government would also extend credit support to breeding farms with standardized sanitation facilities. Dairy cattle production bases would receive more fiscal input for the construction of standardized milk collection stations.
RURAL EMPLOYMENT
The government aims to roll out social security schemes for rural residents and strengthen the protection of farmers’ land rights and migrant rural workers’ employment rights.
Millions of rural workers lost their jobs and returned home from coastal provinces, exacerbating the severe unemployment in rural areas.
The National Bureau of Statistics estimates that about 5 percent of the 130 million migrant workers have returned to their homes since late 2008. Other officials said even more migrant workers had gone home.
The document urged local and central government departments to adopt measures to create jobs and increase rural incomes.
Companies were asked to take on more social responsibilities and give rural migrant workers more favourable employment treatment. Flexible employment policies and more training chances were also encouraged.
Meanwhile, local government departments should increase investment to provide favourable tax and fee policies to those who lost jobs in cities and expect to find new work in their hometowns.
The government also urged departments to map out basic pension insurance measures suitable for rural conditions and migrant workers to ensure their rights.
Though the premium was yet to be decided, it was clear that rural residents would only need to pay a small fraction with governments subsidizing the rest.
RURAL-URBAN INTEGRATION
The government vowed to narrow the widening rural-urban economic gap.
More efforts would go to developing culture, education, health care, and other social welfare in rural areas, inhabited by 900 million people.
The government would raise teachers’ salaries, and subsidize rural schools and students from poor families. This year, vocational school students from financially-strained rural households and those in agricultural majors would be exempted from tuitions fees.
The document said local governments could increase financial subsidies to the new rural cooperative health insurance system, and enhance construction investment in the public health care system.
Moreover, central and provincial governments would raise the stipend for rural households to meet the state-designated minimum subsistence standards.
MARKET MONITORING
The government also hoped to strike the balance between farm produce supply and demand this year to prevent low prices from hurting farmers’ incomes.
The document said the authorities would closely track local and overseas farm produce markets and use all possible measures when necessary to secure the steady growth of rural households’ income.
It urged authorities to “measure the timing and pace” of farm produce imports and exports to avoid flooding the domestic market with imports of farm produce and closer communication among governments, industrial associations and enterprises.
China would also optimize its market access system this year in-line with the requirements of the World Trade Organization to allow foreign investment in farm produce and farming materials production.
The government would modify the regulatory mechanism for farming produce exports and imports to provide a smooth channel for governments between different countries, associations, and enterprises to communicate and resolve problems.
Governors would continue to be held responsible for grain production. An evaluation system would be set up to monitor the performance of authorities in the protection of arable land, water resources, and macro-economic control in the production and distribution of grain crops.
Under the document, different areas are encouraged to take the advantage of local soil and weather conditions to increase crop yields. For example, northeast regions and Inner Mongolia would be encouraged to produce soybeans while the Yangtze River valley would focus on high quality rape.
An industrial development plan in terms of oil tree plantations would also be mapped out as soon as possible, it said.
UNDERSCORE FARMLAND LEASE, TRANSFER REFORM
The document reiterated that the government would continue with and improve the household contract responsibility system that entrusts the management and production of publicly-owned farmlands to individual households through long-term contracts.
It also underscored farmers’ rights to transfer their farmland use rights to others, but farmlands were still of collective ownership, and the land could be used only for farming.
No institutions or individuals could interfere with or force the transfer of the land, it added.
The government encouraged local authorities to establish organizations to provide farmers with land transfer information, legal advice, dispute settlement and other services.
It also said the government would finish collective forestry mechanism reform in five years, promoting a household contract system in the management of collective forestry land and ownership of wood nationwide.
HUGE MARKET POTENTIAL
The government would extend its rural subsidy scheme for home appliance purchases nationwide in an effort to boost rural consumption this year.
It would provide a 13-percent subsidy to all rural buyers of home appliances, including colour TVs, refrigerators, mobile phones, washing machines and freezers.
A trial scheme had been conducted in 12 provinces, which had seen a boost in home appliance sales.
More items would be added to the list if necessary, said the document, which called for the expansion of chain stores in rural areas and better delivery and billing systems.
It also encouraged local governments to establish rural service centers to enhance chain store management and strengthen market supervision.
China should “especially place priority on tapping the rural market and developing the countryside” to alleviate the effects of the global financial crisis, said Vice Premier Wang Qishan last month.
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