China approves rural reforms to boost economy

BEIJING, Oct 12 (Reuters) - China's Communist Party vowed on Sunday to double the income of the country's hundreds of millions of farmers by 2020 and boost their spending, as it looks to home markets as a bulwark against the global financial crisis.

The country's leaders gathered for a four-day conclave focused on the farmers who pioneered China's economic reforms 30 years ago but have since been left behind by booming cities.

China hopes that boosting rural growth will help counter wilting export demand as the global financial crisis forces foreign consumers to tighten their belts.

Rural discontent about expensive education, shoddy health care and corrupt local government is also fuelling unrest that has Beijing's stability-obsessed cadres worried.

"We must give a new impetus to rural development, in order to give a new, increased vitality to the entire economy and society," the official Xinhua agency said in a report on the meeting, strictly closed to foreign media.

The report gave no details on the new rural regulations agreed at the conclave, but state media have flagged that they will include land reforms and rural spending initiatives.

State media are already acclaiming the farm changes as a breakthrough parallel to reforms pioneered under Deng Xiaoping almost 30 years ago, when the huge communes that were the jewels of Mao Zedong's communism began to crumble.

Farmers are hopeful but wary.

Yu Bin, a villager in Anhui province who has protested against the confiscation of local farmland for development, welcomed the promises but said enforcing well-intentioned announcements was not always easy.

"Policy enforcement is always a problem at the grassroots," Yu told Reuters by telephone.

"The key is to give farmers more protection of what rights they are promised. Only if we can get that will farmers' lives improve. I hope this will be the start of some real improvement."

FOOD SECURITY

Since 1978, farmers' incomes have soared from 134 yuan per year on average to 4140 yuan ($605.8). The number of people living in poverty has shrunk from 250 million to just 15 million.

But urban residents' incomes are much higher and until this year were rising faster than farmers', an imbalance Beijing is now keen to address.

The leaders plan to entirely eliminate absolute poverty and also ensure China can feed its vast and growing population, said the official summary of the meeting.

State media also suggested the world financial crisis might give extra impetus to efforts to boost domestic development.

"The global credit crisis freezing up the world's finances may be a blessing in disguise for China as it aims to modify its economic structure," Xinhua said in a commentary on Sunday.

"The government turned to the vast rural market, which has 55 percent of the nation's consumers," the report added, before mentioning the leadership meeting and the reforms it passed. (Additional reporting by Chris Buckley)

Copyright 2008 Reuters, Click for Restriction