China will adopt more favorable policies and invest more money in the rural areas this year, said sources with the Ministry of Finance recently.

An official with the ministry said rural construction will claim a higher share of China's financial budgets in 2006, with more money to be spent on the improvement of living conditions in the countryside.

According to the ministry, the government will provide an additional grain fund of 1 billion yuan (US$124 million) for the country's 13 major agricultural provinces in 2006.

The government will shift the focus of infrastructure construction from the urban areas to the rural areas this year, with a number of key agricultural projects set to be established.

China has greatly increased its investment in farmers, agriculture and the countryside in recent years. It was estimated that in 2005, the central finance allocated over 300 billion yuan (US$37.5 billion) to support rural development, a 50-percent rise from the 2002 figure.

In addition to direct financial support, China has announced the abolition of agricultural tax as of January 1, 2006, which totals 22 billion yuan (US$2.75 billion) every year.

Though government investment is on the up, farmers are still in an inferior position in terms of education and social security compared with urban residents.

Government statistics show that rural residents, who account for some 60 percent of the nation's total population, only have access to 20 percent of the country's medical resources.

To change this, the ministry plans to further promote the reform of health care services in the rural areas in 2006 by establishing a new medical system.

The ministry will also adopt follow-up measures to push forward the development of rural public sanitation, education, science and technology and culture for the building of a new socialist countryside in China.

(Xinhua News Agency February 6, 2006)