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Challenges in China's rural development
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China opened an annual central rural work conference on Saturday amid efforts to breathe more life into the relatively underdeveloped and weaker rural sector.


Here are some of the challenges China's top leaders are facing when they endeavor to close the gap between rural and urban areas in the coming year.


-- Pressure from rising food prices. Experts believed balancing inflation curbs and reasonable price rises of farm produce for the good of farmers would be a key challenge for the Chinese government.


Stable prices of farm produce such as grain, meat and cooking oil, major factors behind this year's soaring inflation this year, was of great significance to prevent current price rises evolving into evident inflation.


-- How to maintain growth of grain output for another year. China is hoping to see grain output continue to increase next year for the sake of the security of a populous country.


However, circumstances are not favorable:


-- The grain supply is running behind demand on the global market.


-- China is facing continuous decrease of rural labor and farmland.


-- Production costs for farming are rising, as goods like fertilizer and pesticide rose along with energy price rises.


-- Global warming would lead to unpredictable natural disasters.


-- How to further expand channels to increase income of rural population remains a challenge. China will have to increase the income of rural people before it can tap consumption in rural areas, as the country strives to shift from heavy reliance on investment and foreign trade to expanded consumption.


Yet, there seems to be limited channels for farmers to grab more income, and the yawning wealth gap showed no sign of closing up. Quite the opposite, the income of urban residents in 2006 was 3.28 times that of rural ones, up from 3.22 in 2005 and 3.21 in 2004.


-- How to improve social security coverage of rural residents. For instance, only 29.08 million rural people have been covered by minimum sustenance allowances so far, compared to 737 million rural population across the country.


There was no proper pension insurance coverage in rural areas, and the coverage of medical insurance was lagging far behind urban areas.


-- Infrastructure facilities still inadequate in rural areas. There are still 30 million rural dwellers who are short of drinking water, although the country allocated more than six billion yuan every year to address the issue.


China's rural population consumed less than 100 kilowatt-hours of electricity per capita in 2006, only a fourth of urban consumption because of lack of infrastructure facilities.


-- Dwarfed financial services in rural areas. Chinese farmers and rural enterprises currently have few places to get funds for their businesses. Official figures show Chinese farmers rarely obtain loans of more than 5,000 yuan.


(Xinhua News Agency December 22, 2007)

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