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Investment growth in rural sector slows
By Xu Dashan (China Daily)
Updated: 2004-02-27 10:39

China's investment in the agricultural sector stood at 115.6 billion yuan (US$13.9 billion) last year, the National Bureau of Statistics said on February 26.

The amount of investment represents an increase of only 3.7 per cent compared to 2002 figures. That's considerably less than the 23.5 per cent growth seen that year.

It was also much lower than the 26.7 per cent growth in the country's entire fixed asset investment.

But Li Deshui, commissioner of the bureau, said any sign of growth at all is an accomplishment since 2002 figures were so high. The investment was also mainly made by the central finance.

"This is not like the industrial and service sectors, which are mainly invested into by market forces," he said.

Since 1998, when China began to carry out a pro-active fiscal policy, the government has tried to increase investment in rural areas to beef up rural infrastructure construction and improve the rural environment.

The investment in agriculture, forestry, animal husbandry, fisheries and water conservation increased from 47 billion yuan (US$5.7 billion) in 1997 to 89.3 billion yuan (US$10.8 billion) in 2000 and 110.6 billion yuan (US$13.3 billion) in 2002.

Great strides were made in the treatment of large rivers and lakes, and in the upgrading of rural power networks and road construction.

The living standards of rural people have also improved greatly, Li said.

However, due to limited amounts of money in the State coffers and minimal savings by rural residents, investment in the agricultural sector is still insufficient, Li said.

Chen Xiwen, deputy director of the office of Central Financial Work Leading Group, said earlier that the government will increase its central financing for agricultural development from 120 billion yuan (US$14.5 billion) last year to 150 billion yuan (US$18.1 billion) this year.

The money will be used to support the "tax-for-fees" reform, ecological construction, infrastructure construction and social undertakings such as education and sanitation in rural areas, he said.

In order to reduce the financial burden on rural residents, the general level of agricultural tax rates will be cut by 1 per cent this year and tax levies on special farm produce, except tobacco leaves, will be annulled.

The government will have to take a series of measures to build up the agricultural sector to increase rural residents' income, Chen said.

The slow growth of their income has long been a headache for the central government because it greatly affects the implementation of demand-stimulating policies, Chen said.

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