This indicates that some experiments in improving social services were basically successful and the country will dedicate more financial resources to addressing the major challenge in its next stage of development.

Despite its stunning economic growth, China still has a long way to go in providing adequate social services affordable education and healthcare and a well-functioning social welfare safety net.

The problem is particularly severe in rural areas. A few hours' drive from many major cities could lead you to villages where some families cannot afford medical care and tuition fees for their children's primary or secondary education. In addition, senior citizens in the countryside have no pensions.

Stories of misery are commonplace.

Although social services in urban areas are also far from perfect, the situation is much better than that in the countryside.

This threatens to widen the gap between rural and urban standards of living.

Over the past few years, the government has begun experimenting with measures and programmes to tackle the problem.

Since this year's spring term, the government has provided free education for rural children in western provinces for the nine-year compulsory education. In 2007, all 150 million rural children across the country will benefit from this scheme.

The coverage of the experimental co-operative healthcare system in rural areas will also be expanded. The system, which is jointly funded by the government and individuals, is now on trial in about 50 per cent of the country's rural areas. In 2007, the coverage will be expanded to 80 per cent of the total. The government's per-person input into the system will also be increased from 10 yuan (US$1.3) to 20 yuan (US$2.6).

In addition, the government will finance experiments to construct a basic subsistence system for low-income earners in the countryside next year.

These are encouraging and much-needed steps.

Designers of the co-operative healthcare system have correctly taken a cautious approach in setting the standard for the system. They first set it tentatively at a low level and are set to raise it after finding the country's financial strength can support the rise.

This approach should also be applied to the basic subsistence and, in the future, pension systems.

When working on these systems, designers should consider their compatibility with social services in the cities. Although the systems in rural and urban areas cannot be unified at the moment, they must be in the future.

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