This story goes back to October 24 last year, when Xiong Deming, a woman living in a poverty-stricken village in Southwest China, was on her way home with a sack of pig feed on her back.

As she struggled home, she saw a crowd gathered in the street -- in the middle of which, was Premier Wen Jiabao. He was on a visit to her village in Yunyang County, Chongqing Municipality.

Plucking up her courage, Xiong elbowed her way through the crowd towards him, and told him her husband had worked for a whole year on a road project launched by the local government but had still not been paid for it. He was owed 2,240 yuan (US$270.85), she said.

"This was a third of our income for the entire year," she said. "Most families here make no more than 6,000 yuan (US$725.51) 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 owed to all the other workers on the project.

Premier Wen's actions started a nationwide movement.

China's state news agency Xinhua printed a story about the incident, and governments all over the country started paying their workers on time and in full.

In Beijing, the national capital, construction companies were ordered to pay all wages owed before the Spring Festival, which fell on January 22, or else they would be banned from operating in the local construction market.

Between November 2003 and 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, make their livings from permanent or temporary jobs in cities and towns.

Xiong Deming's story became an overnight nationwide example of the Chinese leaders' determined efforts to "exercise government power in the interests of the people."

The principle calls for special attention to the well-being of "vulnerable groups" -- people facing difficulties in their work and life -- when the country is 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 by vicious, long wars and natural disasters. More than 90 per cent of the Chinese population, estimated at about 400 million at that time, were living in dire poverty.

That same China is now recognized as one of the fastest-growing economies in the world, a place in which most Chinese people have benefited from the past 25 years' market-oriented economic reforms.

In 2003, the country generated 11.67 trillion yuan (US$1.41 trillion) in gross domestic product (GDP). On a per capita basis, that exceeded US$1,000 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 started its reform and opening-up policies in 1978. The number has now been brought down to about 29 million.

In other words, the Chinese people have dragged themselves out of poverty on a large scale, particularly in the better-developed areas of the country -- the east coast, for example, where annual per capita GDP ranges from about US$4,000 in Tianjin, to US$4,500 in Beijing, to US$7,500 in Shanghai.

But the size of the country (9.6 million square kilometres), geographical inequalities and the complexities of different social groups scattered throughout China mean national wealth has not been equally distributed.

Between 1990 and 2002, net incomes for the rural population increased by 69.7 per cent, averaging 4.45 per cent a year. In comparison, net incomes for urban residents grew 138.3 per cent, or 7.5 per cent a year, in the same period.

The income gap between China's urban and rural residents is still getting wider. In 1985, the disposal incomes of the urban people were 1.89 times those of the rural population. By 2003, the disparity had increased 3.1 times.

Since the early 1990s, the Chinese Government has made every effort to resolve what it calls "problems facing agriculture, rural areas and the rural population."

The National Bureau of Statistics reckons that from 1998 to 2002 the government raised 660 billion yuan (US$79.8 billion) from sales of treasury bonds, investing nearly a third of that sum in infrastructure facilities 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 the Government."

President Hu Jintao has made 15 inspection tours outside Beijing since he was elected general secretary of the CPC Central Committee in November 2002.

A Xinhua news report said 11 of these were in the countryside.

Wen Jiabao has himself toured the Chinese countryside 17 times since he was elected premier in March last year.

The CPC Central Committee and State Council routinely issue a "No 1 Document" at the start of each year. This is a policy paper on everything that needs to be accomplished in that year.

The document for 2004 has broken with convention by devoting its policies exclusively to this one aspect of Chinese society -- helping the rural population get richer. Of China's 1.3 billion people, 768 million of them live in the countryside.

"Giving more while charging them less" is the general policy outlined in the document.

It calls for direct subsidies to grain producers in 13 major grain-producing regions, averaging 300 yuan (US$36.27) per hectare. It also says the State will invest 150 billion yuan (US$18.14 billion) in agriculture and rural development this year, 30 billion yuan (US$3.6 billion) more than 2003.

Starting this year, agricultural tax will be reduced by one percentage point each year and, in five years, will be revoked once and for all.

Apart from tobacco, "special agricultural products" - things like fruit and mushrooms - are now free of all taxes.

The agricultural tax was revoked in some better-developed regions last year, such as Beijing Municipality and Zhejiang Province.

In Heilongjiang and Jilin provinces, China's "bread baskets," work is under way to make sure such tax breaks are properly implemented. The central government has earmarked special funding to make up possible shortfalls in local government revenue, through what is known in China's official terminology as "transfer payments."

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

The unemployed

China's State-owned enterprises began laying off workers in the early 1990s as the nation moved towards a full market economy. For millions this meant the loss of cradle-to-grave care from their employers under the central planned economy that the country embraced before the market-oriented reform of the late 1970s.

The Chinese Government has responded to the sudden lack of provision. Work has been under way over the past decade to build up a social security system -- a mega-dollar project which, in 2003 alone, cost the central government 70 billion yuan (US$8.46 billion), nearly 20 per cent more than in the previous year.

Under this system, laid-off workers are entitled to a living wage for their first three years' unemployment. 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, people were entitled to 300 yuan (US$36.27) a month at the end of 2003, in comparison to 155 yuan (US$18.74) for people in Xining, capital of Qinghai, one of the poorest provinces in China.

Over the past decade, some 26 million people have benefited from the program, which has cost the government more than 100 billion yuan (US$12.09 billion), including the 46 billion yuan (US$5.56 billion) spent in 2003.

Help is at hand to help laid-off workers and the rest of the unemployed. Advice centers offer job training and job hunting help, and guide people to where the work might be.

Small and medium-sized private companies are joining the band of helpers.

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 train for new jobs while having families to support.

In Dalian, northeast China, 3,600 private companies have offered 13,000 jobs so far this year. In Shanghai and Beijing, job subsidies have been given to those willing to take low-paid jobs such as cleaning the streets and public toilets.

Women's federations across the country are mobilizing themselves to help train unemployed women into being household helpers and babysitters.

Among laid-off workers, many mothers work in families to take care of pregnant women and those who have just had babies. "They are earning up to 2,000 yuan (US$241.83) 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 and should not be done."

In a latest development, the People's Bank of China, the country's central bank, and the Ministry of Labour and Social Security, have decided to make bank loans more easily available to laid-off workers and other unemployed people who want to set up their own businesses.

The Ministry of Finance will set up a special fund to subsidize such loans, typically smaller than 20,000 yuan (US$2,418), with a period of repayment not longer than two years.

Fight against HIV/AIDS

The battle against SARS (severe acute respiratory syndrome) in 2003 was a hard one, but China was successful. It now faces a growing challenge with the global scourge of AIDS, which has infected an estimated 1 million people since the first case was identified here in 1985.

Health officials and experts have warned that the number will exceed 10 million by 2010 if the government fails to take effective enough measures against it.

On February 26, 2004, a committee was set up under the State Council to co-ordinate efforts in AIDS prevention and treatment.

Vice-Premier Wu Yi, who doubles up as health minister, chairs a committee consisting of senior officials from 23 ministries and State commissions and seven provinces and municipalities where AIDS has reached epidemic proportions.

AIDS-infected farmers and the urban poor are the most vulnerable of all the vulnerable groups. At the inaugurating committee meeting, Wu Yi summarized a policy developed to combat the illness. "Four-free plus care" means free treatment for poor AIDS patients; free blood tests, on an anonymous basis, in areas where the disease is virulent; free education for AIDS orphans; and free HIV-AIDS counseling for pregnant women. Relief will be given in cash and kind to patients' families in financial difficulties, as well as ongoing campaigns to educate the public about AIDS.

Vice-premier Wu Yi has set a personal example of sympathy and attention to AIDS sufferers, visiting villages in Shangcai County, Henan Province, where thousands were infected by selling their blood. Wu visited people in their homes, talking to patients and making sure the policy was being implemented properly. Seventy-two officials from Henan Provincial Government have since been sent to these villages to help local families.

"Serve the People" was a mantra introduced by the founding fathers of New China back in the 1930s. It was a guideline for the Communist Party of China to follow, and has now evolved into "exercising government power in the interests of the people".

For 1.3 billion Chinese people, the words mean they can count on the government for increasingly prosperous lives, and vulnerable groups among them can expect improvements as the country rapidly modernizes. Which is why the Chinese people are confident that China can be built into a modern, democratic country in the decades ahead.

(China Daily September 4, 2004)