The story goes back to October 24, 2003 when Xiong Deming, a woman living in a poverty-stricken village in southwest China, was on her way back home with a sack of pig feed on her shoulder.

She happened to meet Chinese Premier Wen Jiabao, who was visiting her village in Yunyang County, Chongqing Municipality. Gathering enough courage, the woman elbowed into the crowd and told the premier that her husband had worked for a whole year on a road project launched by the local government but had been unable to get his pay, 2,240 yuan (US$270.97) in total.

"That accounted for one-third of our income for the year," she said in a recent interview. "Most families here make no more than 6,000 yuan (US$725.81) a year."

The premier intervened without delay. Xiong's family got the money before midnight and, five days afterwards, the county government paid the wages it had owed to all others who had worked on the project.

After Xinhua News Agency, released a story about what the premier had done for the woman and her fellow villagers, governments all over China began pressing employers to pay wages in full and on time to peasant laborers working for them.

In Beijing, the national capital, construction companies were ordered to pay wages in arrears before the Spring Festival, which fell on January 22, or to be deprived of access to the local construction market.

From November 2003 to February 2004, more than 24 billion yuan (US$2.9 billion) in wages held back or pocketed by employers was paid to "immigrant workers" -- those from the countryside who, like Xiong's husband, live on permanent or temporary jobs in cities and towns.

Xiong Deming's story became known across the country overnight, as an example of how earnestly Chinese leaders are implementing the principle of "exercising government power in the interest of the people." The principle calls for special attention to the well-being of "vulnerable groups" -- people facing difficulties in work and life despite the remarkable achievements the country has made in striving for modernization.

"No. 1 Document" of 2004

When the late Chairman Mao Zedong proclaimed the founding of the People's Republic of China on October 1, 1949, China was scarred all over after incessant wars and natural calamities, and more than 90 percent of the Chinese population, estimated at about 400 million, were living in dire poverty.

In contrast, the same China has come to be recognized as one of the fastest growing economies in the world. Most of the Chinese people have benefited from the market-oriented economic reforms going on over the past 25 years.

In 2003, the country generated 11.67 trillion yuan, or 1.41 trillion US dollars, in gross domestic product (GDP). Calculated on a per capita basis, that exceeded 1,000 US dollars even though the Chinese population had grown to nearly 1.3 billion.

More than 250 million Chinese were living below the poverty line when China kicked off the reforms in 1978. The number has been brought down to about 29 million. To put it graphically, the Chinese people, taken as a whole, have freed themselves from hunger and want, and the best-developed parts of China -- regions along the coast -- are rapidly modernizing, whose per capita annual GDP ranges from 4,000 US dollars (Tianjin), 4,500 US dollars (Beijing), to 7,000 US dollars (Shanghai).

Nevertheless, distribution of the national wealth is not even, given the size of the country (9.6 million square kilometers) and the complexity of differences in conditions between different social groups and between different regions.

From 1990 to 2002, net incomes for the rural population increased by 69.7 percent, averaging 4.45 percent annually. In comparison, net incomes for city people grew 138.3 percent, or 7.5percent yearly during the same period. The income gap between China's urban and rural residents has kept widening. In 1985, disposal incomes for the urban population were 1.89 times those for the rural population. By 2003, the disparity had increased to 3.1 times.

Since the early 1990's, the Chinese government has spared no effort in resolving what it calls "problems facing agriculture, rural areas and rural population." According to the National Bureau of Statistics, from 1998 to 2002 the government raised a total of 660 billion yuan (US$79.84 billion) from sales of treasury bonds, and invested nearly one-third of the sum in infrastructure facilities designed to improve living and production conditions in the countryside.

The current Chinese leadership, in particular, has made it clear that to strive for an increase in rural incomes is a "task of paramount importance for the entire Party and Government." Chinese President Hu Jintao has made 15 inspection tours outside Beijing since he was elected general secretary of the Communist Party of China Central Committee in mid-November 2002. According to a Xinhua news report, 11 of these were in the countryside. Wen Jiabao, on his part, has toured the Chinese countryside 17 times since he was elected premier in mid-March 2003.

As a routine, the CPC Central Committee and State Council jointly issue a so-called "No. 1 Document" at the beginning of every year -- in fact a policy paper on anything and everything to be done in the year. The "No.1 Document" for 2004, however, is devoted exclusively to policies designed to help the rural population increase their incomes.

It broke the convention by concentrating on just one aspect of the Chinese society, the aspect that undoubtedly is vital to the country, given the fact that 900 million of the 1.3 billion Chinese live in the countryside.

"Giving more while charging them less" -- this is the general policy set in the 2004 "No. 1 Document." It calls for direct subsidies to grain producers in 13 major grain-producing regions, averaging 300 yuan (US$36.29) per hectare. In accordance with the same 2004 "No. 1 Document," the state is investing 150 billion yuan (US$18.15 billion) in agriculture and rural development for this year, 30 billion yuan (US$3.63 billion) more than 2003.

Moreover, beginning 2004, the agricultural tax will be reduced by one percentage point every year and, in five years, it will be revoked once and for all. With tobacco as the only exception, "special agricultural products" -- things like fruit and mushrooms -- are now all tax-free.

The agricultural tax was already revoked in some best-developed regions in 2003, including for example Beijing Municipality and Zhejiang Province. In Heilongjiang and Jilin provinces, China's "bread baskets," work is under full swing to make sure that such tax breaks are truly implemented.

The central government has earmarked a special fund to make up possible shortfalls in local government revenues, through what is known in China's official terminology as "transfer payments."

The result has been immediate. On July 16, when summer harvest has just ended in most parts of China, a spokesman for the State Bureau of Statistics announced that net incomes increased 7.8 percent year-on-year for China's rural population in the first six months of 2004, the fastest growth in the most recent two decades.

Laid-off workers & the unemployed

China's state-owned companies began laying off workers in the early 1990s, in a bid to help the national economy become truly market-oriented. For millions of them this means loss of care from cradle to grave by their employers under a Soviet-style planned economy that held sway in China before the reform era began in the late 1970s.

The Chinese government has responded to the problem with a will. Work has been under way over the past decade to build up a social security system -- in fact a mega-dollar project which, just in 2003, cost the central government 70 billion yuan (US$8.47 billion), nearly 20 percent more than in the previous year.

Under such a system, a laid-off worker receives a living wage if he or she cannot find a new job in the first three years. If the worker remains unemployed at the end of the three-year period, he or she may apply to the local government for a subsistence allowance.

The "subsistence allowance" provides a minimum living standard for all those living below the poverty line in Chinese cities and towns. The sum varies from region to region, depending on the economic strength of each.

In Guangzhou, one of the best-developed cities in China, a recipient was given 300 yuan (US$36.29) per month at the end of 2003, in comparison to 155 yuan (US$18.75) for a recipient in Xining, capital of Qinghai, one of the poorest provinces in the country. Official statistics show that over the past decade, some 26 million people have benefited from the program, which has cost the government more than 100 billion yuan (US$12.1 billion), including 46 billion yuan (US$5.56 billion) spent in 2003.

To help laid-off workers and other unemployed people find jobs, a range of assistance has been developed, apart from customary help such as free job-hunting advises, free job training and recommended job opportunities. Helpers come from not only government departments but also communities and the private sector consisting mainly of small- and medium-sized companies.

In Shanghai, a preferential tax policy has been granted to companies hiring laid-off workers aged between 40 and 50, the hardest hit as they are considered too old to learn for new jobs while having families to support. In Dalian, northeast China, 3,600 private companies have offered 13,000 job openings so far this year. In Shanghai and Beijing, job subsidies have been given to those willing to take low-paying jobs such as cleaning streets and public toilets.

Women's federations across the country are mobilized to help train unemployed women into household helpers and babysitters. Among laid-off workers, many mothers work in families to take care of women in confinement.

"They are earning up to 2,000 yuan (US$241.94) a month, much more than before they were laid off," Wang Shulan with the Beijing Women's Federation said. "Since they themselves are mothers, they know what should be done and what should not."

In a latest development, the People's Bank of China, the country's central bank, and the Ministry of Labor and Social Security have decided to make bank loans easily available to laid-off workers and other unemployed people seeking to get self-employed. According to a government decision made in early July, the Ministry of Finance will set up a special fund to subsidize such loans, typically smaller than 20,000 yuan (US$2,419.37) with a period of repayment not longer than two years.

Altogether, some 28 million workers had been laid off from state-owned companies by the end of 2003, and more than 90 percent of them had got new jobs.

HIV/AIDS

In 2003, China fought a hard battle against the onslaught of SARS, or severe acute respiratory syndrome, and won. It is now taking up a growing challenge by AIDS, or acquired immune deficiency syndrome, a global scourge.

On February 26, 2004, a committee was set up under the State Council to coordinate efforts of all sides for AIDS prevention and treatment. Chinese Vice-Premier Wu Yi, who doubles as health minister, chairs the committee consisting of senior officials from23 ministries and state commissions and seven provinces and municipalities where AIDS is epidemic.

AIDS-infected peasants and urban poor are the most vulnerable of all the vulnerable groups. At the meeting inaugurating the committee, Wu Yi summarized the policy toward them as "four-free plus care." "Four-free" means free treatment for poor AIDS patients; free blood tests, on an anonymous basis, in areas where the disease is epidemic; and free education for AIDS orphans and free HIV-AIDS counseling for pregnant women there. By "plus care," she meant relief in cash and kind to patients' families in financial difficulties, aside from campaigns to publicize AIDS knowledge and urge fair treatment of AIDS patients by the general public.

Wu, as a matter of fact, has set a personal example of sympathy and attention to AIDS-infected people. Shortly after the battle against SARS was won, she visited villages in Shangcai County, Henan Province, where thousands have been infected through selling of their blood.

The vice-premier was found right in homes, talking with patients and their families to make sure that the "four-free plus care" policy was truly implemented, and drinking from their bowls. In a latest development, 72 officials of the Henan Provincial Government have been sent into these villages.

They are charged with helping local families improve their conditions while seeing to it that patients take the medicines, all free of charge, in doses and on time as prescribed.

From "serve the people" to "exercising government power in the interest of the people"

Far back in the 1930s, the founding fathers of New China set "serve the people" as the guideline for the Communist Party of China in all its work. "Serve the people," in fact, represents the finest tradition the Party has passed on and has now evolved into "exercising government power in the interest of the people."

"Exercising government power in the interest of the people," as a formulation in China's official terminology, may be beyond the comprehension of those outside the country who have no or little idea about China. For the 1.3 billion Chinese people, however, it means they can count on the government for an increasingly prosperous life, and those vulnerable groups among them can expect improvement in their life when the country is rapidly modernizing.

That, in part, explains why the Chinese people are so confident in building China into a modernized, highly democratic country in the decades ahead.

(Xinhua News Agency October 6, 2004)