$16.6b govt subsidies drive up rural projects

BEIJING - China's central and local governments had invested 105 billion yuan ($16.6 billion) in its award and subsidy mechanism for village-level public projects by 2011, and around 985,000 public projects were built in villages nationwide, the Ministry of Finance said Monday.

The funds had fueled construction spending on rural public projects involving a total of 280 billion yuan, said the MOF.

China first introduced the subsidy system in 2008 in the provinces of Heilongjiang, Yunnan and Hebei in an effort to improve rural public services, and further expanded it nationwide in 2011.

Zhang Shaochun, vice finance minister, said the government would continue to improve the mechanism and gradually boost government funding in rural areas.