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Distribution of China's National Revenue to Favor Rural Areas


       The development of China's national economy has entered a new period, and the distribution of the national revenue has begun to favor agriculture, rural areas and farmers. This was disclosed by the recent National Working Conference on Rural Economic Plans held in Hangzhou.

       Liu Jiang, vice-minister in charge of the State Development and Reform Commission, said, according to international experience, the relationship between industrial and agricultural development roughly involves three phases: first, agriculture subsidies industry during the early stage of industrialization; second, agriculture develops parallel to industry during the middle stage of industrialization; and the third, industry repays agriculture during the post-industrialization stage. When the per-capita GDP reaches US$800-US$1,000, and the ratio of agriculture in the GDP and that of rural laborers in a country's total number of employees drops under 20 percent and 40 percent respectively, economic development moves from the early stage to the middle stage of industrialization. In 2002, China's per-capita GDP averaged US$900, the proportion of agriculture in the national economy dropped to 14.5 percent, and the ratio of rural laborers in the country's total number of employees declined to less than 50 percent. This indicates that China has moved into a new stage featuring the parallel development of industry and agriculture.

       According to statistics, since the implementation of the Ninth Five-Year Plan (1996-2000), the capital allocated by the state treasury to support agriculture has increased significantly. The government has launched the fee-to-tax reform in rural areas and increased input in agriculture, forestry and water conservancy, particularly in small and medium-sized rural infrastructure facilities. The central authorities have also requested, as of this year, most of the newly added expenditures on educational, public health and cultural undertakings be used in rural areas.

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