The government is working on a mechanism to improve rural infrastructure as part of efforts to boost agricultural development and close the wealth gap between urban and rural areas, an official said yesterday.

Chen Xiwen, director of the office of the Central Leading Group on Rural Work, told a press conference that China will "considerably increase" investment in the countryside to seek coordinated development of the urban and rural economies.

The central government will expand its agricultural budget and channel revenue from land-use charges and arable land occupation tax to rural areas, he said.

In addition, local governments will set aside part of their city construction budgets for spending on rural areas.

The move enables industry to promote agriculture and urban areas to help rural ones.

The government is likely to raise its rural budget to about 520 billion yuan ($72.4 billion), from 392 billion yuan last year, Chen said.

Last year, it spent 420 billion yuan on rural projects.

Chen's remarks came after the State Council on Wednesday issued its first policy document of the year, which reaffirmed its commitment to the countryside.

Both government expenditure and fixed asset investment in rural areas must "expand at a markedly faster pace" this year, the document said.

Local governments above county level must ensure growth in agriculture spending outpaces their own revenue growth.

They should also place more emphasis on building infrastructure and developing social undertakings in the countryside, it said.

Xinhua

(China Daily 02/01/2008 page5)