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Financial aid needed for rural democracy
By Yu Zhong (China Daily)
Updated: 2005-05-19 06:17

China's Minister of Civil Affairs has warned the policy to exempt farmers from rural taxes may have an adverse effect on village self-governance.

The State's rural tax reforms have meant significant challenges to the development of public welfare causes in villages as well as the smooth operation of grass-roots organizations, as it cuts off their major cash supply, said Minister Li Xueju at a national forum on village self-governance.

The forum, part of a celebration to commemorate the 30th anniversary of the China-EU diplomatic relationship, was launched by China and the European Union yesterday in Beijing.

"In this context, and if there is no timely compensation from the government, the development of rural public welfare undertakings will be set back," said Zhan Chengfu, a senior official with the ministry.

Experts nationwide backed up the warnings.

A recent survey by Xiang Jiquan, an expert from Huazhong Normal University, discovered that counties and townships in Fujian Province had witnessed a decrease of 1.2 billion yuan (US$145 million) in their annual income after the tax reform.

Xiang said it was estimated that each village in the province had a financial surplus of just 14,000 yuan (US$1,690) a year to cover expenses for running village affairs.

"However, to sustain the stable operation of a village-level organization normally needs 30,000 yuan (US$3,630)," his report says.

"The only solution is to get transferred payments from the government," said Yu Weiliang, a leading expert with the China-EU training programme on village self-governance.

But Zhan did reiterate that the deduction of rural tax was still huge progress in shaking off some of the economic burden on farmers, and "helps push forward villagers to get more involved in decision-making in their village affairs."

"In some way, the reform can help foster the sense of responsibility among villagers," he said.

Statistics from the ministry show that an average of more than 80 per cent of villagers in China participate in village elections, with some areas chalking up 95 per cent.

(China Daily 05/19/2005 page2)

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