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Investment Growth in Rural Sector Slows

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 Thursday. The rate of growth was in the low single digits, in large part because of the 23.5 percent jump recorded in 2002.

The amount of investment in the agricultural sector in 2003, 115.6 billion yuan (US$13.9 billion), represents a rise of only 3.7 percent year on year, considerably lower than the 23.5 percent growth seen in 2002.

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

But National Bureau of Statistics commissioner Li Deshui said that any year-on-year growth at all is an accomplishment, since the preceding year's figures were so high. The investment was also mainly made by the central government.

"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 infrastructure construction and improve the environment.

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 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, environmental improvements, infrastructure construction and public works 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 percent this year and tax levies on special farm produce, except tobacco leaves, will be revoked.

The government must implement measures to build up the agricultural sector and 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.

(China Daily February 27, 2004)

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