China will set up a minimum living allowance system for rural areas by the end of this year, the State Council, the country's cabinet, said yesterday.

Despite years of poverty alleviation work that has lifted millions out of poverty, part of the rural population is still very poor. Such people are in urgent need of government subsidies for their survival, a State Council statement said.

"The work (to set up the system) is of great importance to promote rural social economic development, to reduce the urban-rural income gap and to maintain social equality," the State Council said.

Criteria for minimum living allowance will depend on local conditions and social and economic development of a place.

The criteria can change depending on the fluctuation in local prices of essentials and improvement in living standards, it said.

Allowance funds will be managed separately and measures will be taken to ensure they are paid to the right people at the right time.

In an interview posted on the central government's website, www.gov.cn, last month, Vice-Minister of Labor and Social Security Li Liguo said the system will cover more than 20 million people living in rural areas of the country. This year, the central government allotted 3 billion yuan ($397 million) to ensure the system is set up across the country.

China has more or less completed setting up a minimum living allowance system for its urban residents.

(China Daily August 14, 2007)