Party plenum to unveil rural reform policies, says report

PUBLISHED : Saturday, 11 October, 2008, 12:00am
UPDATED : Saturday, 11 October, 2008, 12:00am

The Communist Party conclave will launch initiatives on rural financial and banking reform to help boost economic development in the country's vast countryside in an effort to offset slowing growth amid the global financial turmoil, a report said.

The Communist Party Central Committee's plenary session, a key four-day meeting that opened in Beijing on Thursday, would announce policy decisions involving rural finance, the 21st Century Economic Herald reported yesterday, quoting knowledgable sources.

Meanwhile, the Ministry of Finance was also working out a series of incentives to support the creation of a financial system for rural areas that would ease implementation of state policy, it said, adding that an announcement would be made after the plenary session, which closes tomorrow. Incentives would include tax breaks, fiscal aid, easing of money policy and support for the development of insurance in rural areas, the report said.

Analysts expected the country's leaders to announce measures that would bolster economic development as the nation faces unprecedented challenges amid the credit crisis battering the US and Europe, which has curbed those economies' appetites for Chinese exports.

Recent speeches by top officials and state media reports have suggested that a key decision to emerge from the plenary session would grant farmers greater scope to lease and transfer land, thereby loosening but not abandoning state controls.

The 21st Century Economic Herald report quoted an agricultural expert as saying incentives were needed to attract more financial and banking institutions to rural areas.

The mainland began the process of reform 30 years ago, but rural incomes have grown slowly.

Some economists have attributed the shortage of money in the countryside to state banks' reluctance to lend to farmers.

They also said the lack of government policy support for agricultural development had contributed to the yawning gap between urban and rural regions.

Analysts said the plenary session's emphasis on rural issues reflected the top leadership's efforts to boost consumption as they had realised the global financial crisis meant China could no longer rely on exports to drive economic growth.

The 204-member Central Committee meets about once a year to endorse major decisions.

Announcements from the closed-door gathering emerge only at its conclusion.