PROF' DR' LI XIAOYUN

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An Introduction to Pro-poor Policies for
Development since Reform and Opening-up

• PROF. DR. LI XIAO-YUN

College of Humanities and Development China
Agricultural University 2005.12
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(No Transcript)
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Contents

• 1.Pro-poor micro-policies for development
• 1.1The policies of education and human resource
  development
• 1.2Policies related to Social Securities
• 1.3Policies related to Agriculture and
  Environmental Protection
• 1.4 Policies related to the Land use
• 1.5Policies related to Infrastructural
  development
• 1.6 Policies related to Population and Family
  Planning
• 1.7 fiscal policies
• 2. Policies Conducive to the Development of the
  Urban Poor on the Micro Level
• 3. Regional Development Policies Conducive to the
  Development of the Poor on a Macro Level
• 4. The View Point of Scientific Development
• 5. Macro Economic Adjustment and Control
  Policies
• 6.Policies for Poverty Alleviation in Developing
  the Rural Area

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1.Pro-poor micro-policies for development
1.1 the related policies of education and human
resource development
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1 Policies for Compulsory Education

• Chinas Compulsory Education Law stipulates that
  all children aged 6 or above should receive the
  required 9 years education in a school . The
  state provides free education for students
  receiving compulsory education.
• On November 10, 2005, the Ministry of Education
  released the State Report for National Education
  in China, said
• poor students in rural areas shall get free
  textbooks and boarding allowance in 2007
• free compulsory education should be enjoyed by
  rural areas throughout China in 2010
• everyone can receive free compulsory education
  in 2015
• Financial Minister next year
• the education burden has become one of the
  heaviest for farmers in the last two decades

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2 Vocational Education Policy

• Vocational Training includes pre-employment
  training, military-to-civilian training,
  apprenticeship, on-the-job training, job-change
  training and others.
• government at all levels may use part of the
  budget for science and technology development and
  the promotion of techniques in an appropriate
  manner for rural vocational training.

Vocational education produce a large number of
professional technical personnel in a timely
manner and in line with market needs. And it is
very important in promoting the development of
the rural areas and farmers by providing the
skills training in basic agricultural production.
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3. Two Exempts, One Subsidy Policy

• Starting from the autumn of 2001, the Ministry of
  Finance and Ministry of Education have jointly
  given away free textbooks to students who are at
  the compulsory education stage and from
  impoverished families in the western or
  mid-western part of China.
• From the autumn of 2004, the government has been
  implementing the policy of the Two Exempts, One
  Subsidy Policy, which means that students from
  these poverty-stricken areas are exempted from
  miscellaneous fees and textbook costs, and given
  a subsidy for accommodation.

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• central government has increased eligibility for
  free textbooks to all the 24 million plus primary
  and middle school students from poor families in
  the western and mid-western regions from the
  autumn of 2004
• in 2005, the funding for the Two Exempts, One
  Subsidy program will reach RMB6.4 billion, which
  will benefit 26 students of the mid and western
  regions, and will benefit 40 students in 592
  national poverty alleviation counties.

The policy has lessened the economic burdens for
those poor families from the western and
mid-western regions , and increased enrollment
rate for the compulsory education in those area.
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4 .One Fee system

• The practice was a result of combating the
  arbitrary collection of from students by schools
  of basic education
• the government introduced this one-fee system
  into some impoverished regions in 2001, which
  refers to the setting up of a ceiling for the
  collections of fees and textbook costs, and
  except for this fee, no other fees were allowed
  to be collected from students.
• The cost of textbooks was based on the list of
  textbooks (excluding auxiliary teaching materials
  ) that conformed to teaching guidelines issued by
  the ministry of education ,and that were in the
  catalogue of textbooks and necessary student
  books compiled by the provincial education
  administrative department.

The implementation of the policy had achieved
impressive results in curbing arbitrary
collections, particularly in compulsory education
in rural areas, and had reduced the educational
burden of farmers.
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5.Rebuilding the dangerous houses of the rural
elementary and middle schools

• Since reform and opening, with the degradation of
  the rural collective economy and the reform of
  the rural financial system, investment in
  compulsory education, which has been decreasing
  year after year, which was proven by the
  existence of a great number of dangerous houses.
• From 2001 to 2005, the government has allocated a
  proprietary use fund of RMB9 billion , to support
  the reconstruction of dangerous houses in rural
  schools in poverty-stricken areas in the western
  and mid-western regions.

The implementation of this policy provides a
guarantee for the educational facilities in those
poor areas, and is beneficial to the development
of compulsory education in rural areas. this
policy is of great importance to the long-term
development of human resources in rural areas.
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6 Students Loan Policies

• The national students loan aims at the
  perfection of students assistance policy system
  though financial means by the state, and
  strengthens the assistance to poor students in
  institutes of higher education.
• The student needs no guarantee or mortgage for a
  loan.
• The national students loan policy provides that
  annual loan by the student should not exceed
  RMB6,000.
• He should repay the principal and interest within
  6 years after his graduation.
• The interest for the loan when the student is in
  university is paid by the state coffers, and the
  student is to pay back the interest and fines, if
  any, as well as the principal after he leaves
  college.

The policy plays a basic safeguarding role in
helping the poor student finish his studies in
university and in uplift his overall qualities,
and is, generally speaking, conducive to the
long-term development of the poor.
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7 The related policies for migrating childrens
education in city

• the compulsory education system adopts a
  Schooling and Management Hierarchy, which means
  that basic education is the responsibility of the
  local government, where one has his permanent
  household registration.
• the children of migrant workers are denied access
  to public schools there, which are funded by the
  local government.
• in 2003 , the State Council ordered the local
  government in the city responsible for the basic
  education of the migrating children
• The local government of the city should work out
  education costs standards for the compulsory
  education of migrating children, exempt them from
  certain fees, and charge them the same rate as
  the local students.

The policy that gives children of migrant workers
access to the local school relieves the heavy
burden of paying additional fees for non-natives
for education in the city.
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8 The Sunlight Project for the training of rural
migration labors

• The Sunlight project for the training of rural
  migration labors, supported by government
  finances, refers to those professional skills
  training and example-setting projects mainly in
  the grain-producing regions, labor-exporting
  regions and old revolutionary bases enabling the
  transfer of labor from agricultural into
  non-agricultural areas.
• From 2006 to 2010, The rural human resources will
  be tapped more intensely so that a total of 30
  million rural people will get training with 6
  million to be trained each year.
• After 2010, the training of rural labor will be
  incorporated into the national education system.
• The Sunlight Projects training programs focus on
  short-term (15 to 90 days) training of
  professional skills, to be supplemented by some
  guidance training.

The Sunlight Project, as one sponsored by the
central government will continue to play the
important role in strengthening the western and
mid-westerns ability to export more workers.
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9 The distance education project for the rural
basic education

• Modern distance education for primary and middle
  schools in poverty-stricken rural areas is a
  comprehensive information technology project
  whose aims are to build an educational
  information portal for poor areas, and to
  accelerate the modernization of education for
  poor areas.
• The central government invested RMB1 billion with
  an additional RMB0.91 billion coming from local
  government in the pilot projects
• These distance education places cover around 25
  of rural primary and middle schools in the west,
  around 21 of all rural schools in the middle.
• The results are the creation of 20977 places for
  playing teaching discs, 48605 places for
  receiving teaching programs through satellites,
  7094 computer classrooms.

the utilization of modern information technology
makes possible the sharing of better resources
across the country, which is a great impetus to
the development of human resources in the vast
poor areas in the middle and western regions.
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1.Pro-poor micro-policies for development
1.2The social security policies
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10 The minimal rural social security system

• security system is a life line system by
  Chinas government guaranteeing low income
  families their minimum needs in life.
• The minimum social security system first appeared
  in Shanghai in 1993.in 2003, the rural assistance
  system was created.
• At the end of 2003, 1.915 million families or
  3.968 million people benefited from the rural
  minimal social security in the pilot areas, while
  4.1 million families or 792.15 million people
  could receive rural periodical assistance.
• The rural minimal social security level should be
  determined by taking into account the costs of
  clothing, food, accommodation, and so on for the
  local rural resident to maintain the minimum
  living, and costs for utilities and heating and
  the education of minors.

The implementation the rural minimal social
security is of great significance for meeting the
minimum needs of the rural poor and for upholding
social justice, and provides a basic protection
for the poor to further develop themselves.
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11 Rural pension system

• Rural pension refers a system based on the rural
  population in wealthy rural communities, where
  farmers, under the guidance of state policies,
  voluntarily join the program.
• Chinas rural pension system started in 1992,
  when the Basic Plan for Rural Pension at the
  County Level was promulgated.
• The capital collection and accumulation follows
  the principle of Most by personal contributions
  to be subsidized by the collective and supported
  by governmental policies.
• The farmer can take the pension when he reaches
  a certain age (normally 60).
• the coverage of this kind rural pension is only
  limited to better-off areas where township
  enterprises are in good shape

The system, which is a guarantee of old peoples
basic livelihood, helps change farmers
traditional ideas, and is useful for promoting
family planning, improving rural social security
system, maintaining rural social stability, and
for promoting the rural economy and social
progress.
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12 Supporting system for the five guarantees

• The people should be considered belonging to the
  five guarantees if they are old or disabled or
  minors in rural areas
• Having no legal providers, or the providers are
  unable to provide for them
• Unable to work
• The five guarantees including
• The provision of grains, oil and fuel
• The provision of clothes, bedding, and pocket
  money
• the provision of basic living space
• timely medical treatment when ill, and some help
  when one cannot take care of oneself
• a proper funeral.

The supporting system for the five guarantees
provides a means of basic living for the
extremely poor.
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13  New rural medical cooperative system
middle west

• The new rural medical cooperative system, a
  voluntary medical mutual assistance program
  financed by the individual, the collective and
  the government, aims to tackle serious illnesses
  contracted by farmers.
• Each farmer should tender a fee of no less than
  RMB10 annually.
• The central government offers a subsidy of RMB10
  to each farmer
• The local government also gives a corresponding
  subsidy of no less than RMB10
• The local government in the east should strive to
  make a RMB20 subsidy to the joining farmer .

east
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• The amount of subsidy under new rural medical
  cooperative system varies with the situations in
  different places
• Between RMB100 and RMB500, 10 is reimbursed
• Between RMB501 and RMB1000, 15
• Between RMB1001 and 3000, 20
• Between RMB3001 and 5000, 25
• Between 5001 and 10000, 30
• Above 10001, 40.
• The annual accumulated amount for reimbursement
  must not go over RMB6000.

This arrangement gives back more in relative
terms when one spends more. Therefore, it helps
the patient avoid partial risks and burdens that
come with serious illnesses.
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14 The medical aid system for the poor

• The medical aid system for the poor also aims
  relieving peasants of their financial burdens by
  providing peasants with the basic medical
  service.
• Main aid options
• Financial support should be given to people in
  helping them join the cooperative medical system.
  
• If farmers are in great financial difficulty
  that their lives have been ruined as a result of
  serious illnesses, they are entitled to proper
  medical aid.
• Farmers who have contracted special infectious
  diseases on the national governments list are
  entitled to medical aid.
• RMB300 million was granted by the central
  government to the benefit the 4.9 farmers in 2004.

Opinions of the Ministries of Civil Affairs,
Public Health and Finance on the Implementation
of the Rural Medical Aid System.
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15 Policies for Assisting Tramps and Beggars

• On July 21, 2003, the Ministry of Civil Affairs
  promulgated the detention and repatriation system
  that had been practiced for decades was then
  replaced by the aid system .
• Tramps and beggars refer to those people who
  cannot by themselves solve the problem of food
  and lodging, who have no relatives or friends to
  go to, and who are not entitled to the
  minimum-security benefits in the city or the
  benefits of the five guarantees, and who are now
  begging for a living.
• The contentssupply basic food and accommodation,
  supply back fee,local government assure their
  basic needs of making life.

Rules for Aiding and Managing Tramps and Beggars
with Secure Livelihood in the City.
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16 The migration management policy reform

• Since reform and opening, with the continuous
  development of Chinas economy, more and more
  people have been moving away from their
  registered places in search of better lives.
• Statistics show that the total number of farmer
  workers stands at 150 million, and 80 of the
  total rural households have members working in
  the city as migrant farmers.
• Though floating population has made contributions
  to the urban economy, they bring to the city lots
  of expected and tough problems in social safety,
  education of the children, family planning.
• Thus, they are, on the one hand, the major
  builders of the city, while on the other hand,
  they are actually second-class citizens.

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• since 2003, the central government has made great
  adjustments in policies. The main contents of
  such policies are
• the abolition of the decades-long detention and
  repatriation system, and shifted emphasis on the
  protection of the legitimate rights and interests
  of migrant workers
• the equal treatment of migrant workers, repealing
  job restrictions against migrant workers, solving
  any delayed or unfair pay to migrant workers, and
  making possible the schooling of their children
  in the city
• improving the conditions for the transfer and
  employment of surplus rural labor, , gradually
  establishing a unified labor market for urban and
  rural people
• deepening the reform of permanent household
  registration, accelerating urbanization, and
  guiding the smooth and orderly transfer of
  surplus labor
• further improving management, doing a
  governmental service, highlighting the service
  function of governmental administration,
• putting forth the guideline of rational guiding

Therefore, more need to be done in the protection
of their rights and interests, and in identifying
and meeting their needs in the daily population
management and service.
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1.Pro-poor micro-policies for development

1.3The Agricultural and Environmental Protection
Policies
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17 The Comprehensive Agricultural Development
Program

• The Comprehensive Agricultural Development
  Program is a long term development plan
  established by the State to support and protect
  agriculture, to develop rural production and to
  enhance the comprehensive production capacity.
• In 1988, the State Council established the
  Agricultural Development Foundation (later called
  the Comprehensive Agricultural Development Fund).
  Organized comprehensive agricultural development
  operations of large scale were carried out
  countrywide.

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• Main point
• In this program, fiscal, agricultural, forest,
  water conservancy, land and financial related
  government agencies were all engaged for
  comprehensive governance over mountain, water,
  farmland and road.
• Funds from the Central government and local
  governments, credit capitals, self-raised funds
  and that from other sources were invested in.
• Engineering, biological and technological
  measures were taken accordingly to achieve a
  combined economic, social and ecological effect.
• At present, the project falls into two
  categories. One is about land governance. The
  other is about industrialization projects

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18 The reform of fee and tax reduction and waiver

• In 2004, to boost up farmers initiative in
  producing more grains in the grain-producing
  areas, the provinces of Jilin and Heilongjiang
  took the lead in the reform of the reduction and
  exemption of fees and taxes.
• The agricultural tax is exempted in 592 counties
  on the national list of poverty reduction in
  2005, and pilot programs were started in some
  pastureland areas in an attempt to eliminate the
  animal husbandry tax.

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• Starting from 2006, China will completely
  eliminate the agricultural tax.
• The national reform of agricultural fees and
  taxes will shift its focus to the supporting
  reforms of the rural and township organizations,
  rural compulsory education, and the county
  financial system in a bid to further lessen
  farmers burdens.

This reform considerably relieves the burdens of
the farmers, enhances their risk-taking abilities
and their initiative in agricultural production.
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19 The Policy of Direct Subsidies to Grain

• In 2003, direct subsidies to grain growers was a
  key item in that round of reforms of the grain
  circulating system. In 2004 direct grain
  subsidies was carried out in full swing
  nationwide, with priorities given to major
  grain-producing counties and farmers.
• The operation plans of direct grain subsidies
  varied across regions.
• In Shannxi province, the monetary standard for
  the 2004 grain subsidies was RMB0.033 for 500g of
  grains (regardless of varieties) multiplied by
  the five-year average quantity of grains
  purchased by the state. This method of
  calculation will remain in effect for three
  years.
• The subsidies can also be based on taxed area
  alone (excluding the area for cash crops that
  could not be restored for grain production within
  half of a year and area for aquatic products).

Though the amount of direct subsidies was not
much, it achieved the goal of stimulating farmers
to grow more grains, reduced farmers burdens and
increased their income
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20 Subsidies of the Improved Grain Species

• The subsidies of the improved grain species is a
  subsidy set up to encourage farmers to use
  improved grain species in their production so as
  to raise the qualities of agricultural products
  and to sharpen the competitive edge.
• The state selected four varieties for the
  subsidies, namely, soybean, wheat, rice and corn.
  The better seed project is primarily implemented
  in the 13 grain-producing province.
• in 2005, high-quality wheat with a subsidy of
  RMB10 per mu for corn with RMB10 per mufor
  high-oil soy with RMB10 per mu for the early
  ripen rice with RMB10 per mu ,the middle ripen
  type RMB15 per mu and late ripen type RMB7 per
  mu.

the policy has played a positive part in boosting
farmers enthusiasm for growing grains, with a
profound influence on those impoverished
peasants. The stability and security of grain
production, and the maintaining and further
improving of farmers income have become a major
issue.
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21 Subsidies of the Farm Machinery

• The subsidies of the farm machinery aim at
  encouraging and supporting farmers utilization
  of advanced farming machinery so as to promote
  agricultural mechanization process, the
  comprehensive productivity of agriculture, better
  agricultural yields and efficiency, and the
  better return on an affordable investment.
• The major kinds of machinery to be subsidized
  include
• Large and medium-sized power machines
• Field operating machines
• grain and agricultural by-products processing
  machines
• Machines for processing stalks and grass.
• The standard of subsidy is less than 30 of the
  farming machine price, and under RMB30,000 in
  amount.

poor cannot afford thus benefit directly from
this policy, but the subsidy is conducive to push
forward the agricultural development of those
poor regions.
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22 Land Conversion to Forestry Project

• The 1998 flooding led to an overall reflection of
  the economic development approaches and the
  ecological functions of forests. It was against
  this backdrop that the policy of land conversion
  back to forestry came into being.
• The land conversion to forestry project was
  launched in 1999, 2002 saw the full-scale
  campaign of land conversion to forests. By the
  end of 2003 the project covered more than 20,000
  towns with over 100,000 villages and 60 million
  households. In 2004,changed the method of
  subsidization from grains to cash for the
  conversion of land to forest.
• The government shall provide the land contractor
  with grain subsidies, a seedling allowance and a
  living allowance based on the actual acreage of
  the land that is converted into forests.

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• The specific standards are
• in the Yangtze River basin and south China, for
  each mu of reforested land the government offers
  150kg of grains.
• In the Yellow River basin and north China, for
  each mu of reforested land, the government offers
  100kg of grains. For each mu of reforest land,
  the cash subsidy is RMB20.
• the number of years in which the grain and cash
  subsidies can be given
• two years for the conversion of land to grassland
• five years for land to cash forests
• eight years for land to ecological forests
• the government protects the owners right to the
  grass and forests of the converter. The
  contracting period of the converted land may be
  extended to 70 years.

The policy is also of great significance to the
development of poverty-stricken areas, especially
those places that are ecologically vulnerable.
Impoverished peasants can invest their surplus
labor into the betterment of family life in
addition to the guaranteed grains obtained for
the conversion of land to forestry.
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23 Land Conversion to Grassland

• The project of land conversion to grassland
  refers to the building of fencing, the sowing of
  improved grass seeds, the banning of grazing,
  temporary banning of grazing, and grazing in
  different districts of the grassland, and all
  other measures designed to restore the grassland
  vegetation, to improve the grassland ecology, to
  increase the productivity of grassland so that
  the grassland ecology and animal husbandry can
  develop in coordination.
• The project began in 2003. The plan was to
  implement the project in 11 provinces in the west
  in a period of five years.

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• The implementation of the policy of land
  conversion to forestry may place restraints on
  the grazing area and number of herds, which can
  negatively influence herdsmens income.
• But from the long-term standpoint, with the
  restoration of the ecology and productivity of
  the grassland, the herdsmen not only benefit from
  generally restored environment, but from higher
  productivity from the restored grassland so that
  they have a much livelihood and personal
  development.

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24 The Compensation System for Ecological
Benefit of Forestry

• In 2001, the central government established the
  fund for the compensation for ecological benefit
  of forestry". On Dec. 10, 2004 the compensation
  system for ecological benefit of forestry was
  formally implemented nationwide. From 2004 the
  government has allocated RMB2 billion each year
  on the 400 million mu forests for the
  compensation for ecological benefit of forestry.
• That indicates that China has entered the stage
  of paid use of ecological benefits of forests
  from the previous unpaid stage.

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• The fund is set up to give subsidies to the
  managers and keepers of key public forest to
  supplement their expenditures for building,
  caring, protecting and management. The fund
  covers the forested areas, the sparsely forested
  areas that have experienced desertification and
  loss of water and soil, the areas with a mixture
  of bushes and woods, and the bush areas.
• The standard for the compensation for the
  ecological benefits of national forests is RMB5
  per mu each year, of which RMB4.5 is used for
  compensation, and the remaining RMB0.5 is used
  for public management and maintenance outlays
  such as the prevention of forest fires.

the compensation for the ecological benefits of
national forests gives the new means of
livelihood, which partially offset their losses
stemming from the preservation of the forests.
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25 Natural Forest Protection Project

• in view of the fact that the ecological
  environment has been deteriorating due to the
  over-consumption of natural forests in China, the
  state launched the natural forest protection
  project so as to achieve the sustainable
  development of the economy and society.
• The projects objective was to solve the problem
  of the regeneration and restoration of Chinas
  natural forests through the prohibition of tree
  felling in the natural forest and the drastic
  reduction of the output of commodity timber, and
  by resettling forest workers in a planned manner.
  
• The project was formally brought into existence
  in October 2000, and is expected to last until
  2010.
• The major protective measures are the
  preservation and management of the forest
  resources. The subsidy is RMB10,000 for 5,700 mu
  of forestland taken care of by one person.
• The project includes state-owned key forests in
  734 counties and under 163 forestry-engineering
  bureaus in 17 provinces in the regions of the
  upper reaches of the Yangtze River, the middle
  and upper reaches of the Yellow River,
  Northeastern China and Inner Mongolia.

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26The Getting-rich Program of the Ecological Home

• The concept was initiated by the Ministry of
  Agriculture in 1999, aimed at generating farmers
  income and with the theme of ecological and
  environmental protection in the form of combining
  farmers living and production as an integrated
  whole.
• This program were implemented on household basis,
  systematically integrated with renewable energy
  and efficiency ecological agriculture, and
  combined with reformations on rural toilets,
  stables, kitchens and yards
• this program involve various projects of energy
  ecological models linked by marsh gas and
  accommodated with solar energy projects, coal and
  firewood saving projects and mini electricity
  projects according to practical need.
• The expected goal is
• to highly improve farmers living environment and
  realize positive economic and ecological
  circulation,
• farmers energy efficiency for household use to
  reach more than 30
• rural population will have an average increase of
  1000 RMB

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27 Environmental Evaluation System

• Environmental Evaluation Law of Peoples
  Republic of China was carried into effect in
  September 1st of 2003
• Environmental evaluation system is a legal
  system, investigating, predicting and evaluating
  the projects and exploiting activities that are
  probably harmful to environment and proposing
  environmental evaluation and precaution scheme.
• As required in the environmental protection law
  and the related regulations, an environmental
  evaluation report should be proposed to make a
  profound and specific evaluation on the pollution
  and environmental effect a constructive project
  will possibly bring out.

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• Environmental evaluation includes the following 6
  aspects
• the basic situation of the constructive project
• the current environmental situation of the
  constructive project and its surroundings
• the analysis and prediction of the possible
  environmental effect on the surroundings
• the environmental protection measures and the
  economic and technical argumentation
• the economic profit-loss analysis of the
  environmental effect
• the suggestions providing environmental
  supervision on the constructive projects
• a conclusion which includes effect on
  environmental quality construction scale and
  nature whether the spot-choosing reasonable and
  pro-environment whether the precautions
  economically reasonable and technically feasible
  whether the further evaluation necessary, etc.
• The attack from environmental disasters is
  earthshaking to the already poverty-stricken
  people. So, a scientific reasonable and strict
  environmental evaluation policy is significant to
  the development of the poor.

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1.Pro-poor micro-policies for development
1.4 The Land Policies
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28 Land Contract System

• Land Contract Law was passed and put into
  effect in August 29th of 2002.
• land contract in the rural areas should be in the
  form of family contract within the group economic
  organizations in the rural areas
• The state protects the legal rights and benefits
  of the group land owners and their rights of
  contracting and managing the land free from any
  infringement form any individual or group. The
  state protects the legal voluntary and
  compensatory turn-over of the land contract and
  management rights.
• In terms of land contract duration, the
  cultivated land 30 years the grassland 3050
  years the woodland 3070 years .
• The power in land contracting and operating can
  be contracted to the others, rented out,
  exchanged, transferred or turned over in the
  other ways. The contractor is the principle part
  of the power turnover in land contracting and
  operating.

The biggest difference lies in the fact that the
legally acknowledges the turnover of landthe new
land policy makes a long-term investment in land
possible
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29 Basic Farmland Protection Policy

• Basic farmland refers to the cultivated land
  that is not allowed be occupied in accordance
  with the need of the agricultural products of the
  people and economic development in a certain
  period and the overall planning for land use.
• The cultivated land that belongs to the protected
  basic farmland includes
• the cultivated land in the grain, cotton and oil
  production base ratified by the competent
  authority in State Department or the local county
  government or the higher level
• the cultivated with sound water conservancy
  control and water and soil conservation
• the farmland with medium or low output that can
  is being or can be transformed
• the vegetable base
• the test farmland for agricultural research and
  teaching.

The carrying out of the national basic farmland
protection policies secures the livelihood of the
poor in some degree as well as maintains certain
amount of land for grain yielding and ensures
grain safety.
46
30 The Compensation System for the Resettlement

• governments should take practical measures to
  compensate the peasants and maintain their living
  standard from decreasing due to the land
  requisition
• The compensation includes soil compensation fees,
  resettlement allowance and compensation fees and
  the immature plants.
• maintaining the peasants previous living
  standard and legally working out the unified
  annual output multiple 30.
• The resettlement should be carried out by the
  following means
• Resettlement in agriculture.
• Re-employment
• Buying a share and sharing profit.
• Resettlement in the other areas.

To the poor peasants without farmland, with the
compensation maintaining their basic living
level, they can put more labor resources and
other resources into other sources of living,
which is beneficial to their long-term
development.
47
31The Compensation for the Resettlement caused by
building the middle and large scale of water
conservation and electricity projects

• The Regulation stipulates that the compensation
  for using cultivated land will be three to four
  times the average annual productivity of the land
  three years before it is levied.
• Each farming population shall get an resettlement
  subsidy two to three times the average annual
  productivity per mu three years before their
  farming land is levied
• Emigrates shall be migrated within their local
  area and county. If not, they should be migrated
  to the beneficiary areas of the project. In case
  it is impossible to migrate them to the
  beneficiary area, then they shall be migrated
  away under the principle of economic
  reasonability.
• The State will support the migration for five to
  10 years

The policies, on the one hand, regulates the
building performances of large and medium-sized
water and hydro-power project, on the other hand,
provides the farmers, especially those in
poverty, a security for livelihood as well as
long term development.
48
1.Pro-poor micro-policies for development

1.5 The Infrastructure Policies
49
32 The Rural Road Construction (the
Road-to-Each-Village Project)

• All Chinas Rural Road Construction Plan
  promulgated in August 2005 sets the overall goal
  of Chinas rural road construction in the first
  20 years of this century as follows pitch roads
  will be available for towns and villages where
  conditions permit, composing rural road networks
  with high service level and facilitating farmers
  with easier, safer and more comfortable
  transportation.
• The specific objectives for future rural road
  construction in the countrys rural road
  construction policies are
• By the year 2010, the countrys rural roads
  mileage will add up to 3.1 million kilometers.
  All the villages in eastern, middle and western
  China where conditions permit will be through
  with pitch (cement) roads (Tibetan area will be
  up to the construction situations).
• By the year 2020, Towns and villages where
  conditions permit will be through with pitch
  (cement) roads. the total rural roads mileage
  will add up to 3.7 million kilometers.

50

• More input from the State to the rural road
  constructions will highly improve the
  transportation conditions in mid and western
  China
• especially areas in poverty in that huge
  investment will benefit local economic
  development, and meanwhile improve transportation
  conditions and reduce poverty in general sense.
• The construction will also help the poor
  population in a long run by providing more
  sources of information and market resources.

51
33The Rural Broadcast and TV Policies

• Since 1998, the National Broadcast and TV Bureau
  has endeavored to organize the Rural Broadcast
  and TV Program, which enabled all villages with
  electricity availability in the country to get
  access to broadcast and TV.
• The construction were carried out in four plus
  two patterns, i.e., it will enable the audience
  within the coverage to access to four channels of
  TV and two channels of broadcast programs.
• This policy requires that in 2004 to 2005, the
  program should cover 93923 villages countrywide,
  among which 1246 are administration villages
  newly availed with electricity and 92680 natural
  villages of more than 50 households that already
  with electricity.
• Four TV channels include CCTV1, CCTV7, Childrens
  Channel and provincial channel
• Two broadcast channels include Central Peoples
  Broadcast 1 and provincials No.1 channel.

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• This policy and its implementation will no doubt
  help the farmers in poor areas to access to large
  amount of information and get rid of poverty.
• In addition, the flow of information about the
  outside world will impact on ways of thinking and
  ways of life of these poor population, which,
  will be beneficial to their long term development
  as well.

53
34 The Rural Electrical Network Implement

• The rural electricity network improvement
  starting from October 1998 invested 189.3 billion
  RMB as basic fund to transform and improve the
  rural electricity network.
• The project required to carry on uniform
  administration for urban and rural low-voltage
  networks as per the principle of same prices and
  two reforms (institutional reform and
  electricity grid reform).
• By the end of 2004 the rural electricity network
  had completed the basic improvement, with more
  than 90 coverage of transformation and overall
  equal prices for urban and rural areas and
  further reduction of rural electricity price.

the States huge investment has stimulated the
macro economic developmentthe policy reduced the
burdens of the rural people and increased the
rural consumption of electric facility improved
their capacity by attained more information
outside
54
1.Pro-poor micro-policies for development
1.6 Policies Related to Family Planning
55
35 The Household Register System Reform

• The household register system is the produce of
  specific historical period and dual societal and
  economic background. As a product of history,
  this rigid system is no longer adaptable to and
  even hinders social and economic development,
  with the drastic social and economic
  transformations.
• The system has undergone a course from loose to
  tight and back to loose again.
• Not until recently did the provinces especially
  eastern provinces began to reform this system and
  to integrate rural and urban household register.

We can say the current household register system
locked the desire, hands and feet of the poor,
even their destiny.
56
36 The Reward Regulation for Family Planning
Households in the Rural Area

• According to the family planning policy issued
  on February 27,2004, the State experimented this
  policy firstly in and throughout 9 provinces.
  From 2005, this reward program was spread to
  rural areas countrywide.
• The reward system aims to encourage peasants to
  do family planning, so as to stabilize the
  bearing standards, and to develop the rural
  population and economic society harmoniously and
  sustainable.
• For rural family with only one child or two
  girls, an annual pension of not less than 600 RMB
  will be granted to each over 60 years old either
  by the central or local government till death.

57

• The policy has helped change farmers attitude
  towards family planning,
• Has helped break the vicious cycle of when ones
  poor, he wants more kids after he has more kids,
  he gets poorer.
• helps control the balance of the gender ratio
• it is conducive to the solution of the old age
  problem and the establishment of the rural social
  security problem.

58
1.Pro-poor micro-policies for development
1.7 The fiscal Policies
59
37 Financial policies supporting agricultural
development

• The major contents of the agricultural supportive
  fiscal polity system includes four aspects
• Direct fiscal input, i.e. government provides
  special capital to support agriculture.
• Revenue support.
• Price support. Through price adjustment,
  government increases the purchasing price of
  agricultural byproducts and reduces the selling
  price of the agricultural supportive industrial
  products to increase the income of farmers and
  reduce their expenses.
• Financial support.
• The specific fiscal expense fee includes
  agricultural infrastructure construction expense,
  three-project fee for agricultural technological
  development and social security in rural areas,
  fiscal subsidy on price and subsidy on purchasing
  price of agricultural produces.

60
38Micro-credit policies

• Roughly, there are four types of micro-credit in
  China
• Non-governmental Organization projects
• Foreign aid projects such as projects funded by
  UNDP and the World Bank
• Government projects
• projects directly operated by financial
  institutions
• From January to June, 2003, 6.51 million rural
  households gained micro-credit loan, accounting
  for more than 60 of the total rural households
  loan requirements.

The original intention of micro-credit policy
implementation was to help the poverty-stricken
households gain lower risk credit support and to
provide funding support for their further
development and become rich.
61
2.Urban pro-poor micro development policies
2.1 Re-employment policies for the lay offs
62
39 Re-employment policies for the lay offs

• Two assurance to ensure that the basic living
  fee should be granted promptly and sufficiently
  and that the re-employment service center should
  be open to the lay offs.
• The main contents of the re-employment policies
• The lay offs who find jobs by themselves can get
  settlement fee which is as three times as the
  average half-year salary of the local employees
  and should be paid totally without installments.
• If the layoffs havent been re-employed, and have
  privilege to unemployment insurance treatment.
• The layoffs and their family which is also in
  financial difficulty can enjoy minimal social
  security for urban-resident accordingly.
• Pay medical insurance for the layoffs

63
40 Special tax policies of the unemployed

• In September, 2002, National Bureau of Revenue
  consecutively released the related regulations
  which require
• For those layoffs who take up individual
  businesses, he/she neednt turn in sales tax,
  city maintenance tax, additional education tax
  and personal income tax within three years.
• Construction industry, entertainment industry and
  advertising industry, sauna, massage, net bar and
  aerobic bar excluded.

64

• for new established service-oriented enterprises,
  if the laid off workers it recruited account for
  more than 3 of its total employees and signed
  labor contract with them with the term of more
  than three years, it will be exempted from
  collecting sales tax, city maintenance tax,
  additional education tax and enterprise income
  tax within three years.
• Advertising industry, sauna, massage, net bar and
  aerobic bar excluded

Promote the re-employment
65
41 Micro-credit policies for the lay offs

• Any laid-off worker can apply for micro-credit
  loan by presenting re-employment preferential
  certificates checked and released by labor
  security sectors under the condition that the
  loan guarantee agencies provide guarantee for
  them.
• The amount of micro-credit is usually about
  20,000 yuan ,The time limit of the loan is
  usually less than two years, The extension period
  should be less than one year.
• By the end of 2004, the balance of micro-credit
  guarantee loan released by financial institutions
  reached RMB1.8 billion. From the beginning of
  this program, totally there were more than
  100,000 lay offs gaining support from
  micro-credit guarantee loan and re-employed.

66

• The interest rate of micro-credit shouldnt
  fluctuate upward. Micro-guarantee loan credit for
  mini-profit project was subsidized by central
  finance according to its real loss.
• Mini-profit projects refer to the individual
  managed projects like commerce, restaurant and
  preparation run by lay offs in the place such as
  the community, street, mineral area.

Can support necessary credit for re-employment
of the lay offs
67
42 Inexpensive rent policies for the urban lowest
income families

• On March 1, 2003, the Administrative
  Pronouncement on Inexpensive Renting for Urban
  Lowest Income Families was enacted by the
  Ministry of Construction and other ministries.
• Government and working units function as social
  security department in the area of housing and
  provide the urban lowest income families with
  inexpensive rent housing.
• Based on the principle of meeting basic housing
  requirement, The security area shouldnt surpass
  60 of the average housing area of the local
  citizens in principle.
• The specific subsidy measures differ from region
  to regions.
• the rent subsidy should be no more than 40 yuan
  per square meter The rent should be 5 of the
  total income of the lowest income families in
  Beijing.

68
43 The minimal social security system of the city
residents

• In 1999, Statute about the Minimal Social
  Security of the Urban Residents was put into
  practice.
• Responsible for the minimal social security
  system of the urban residents.
• The minimal social security standards of the city
  residents.
• according to necessary money needed to maintain
  the basic living such as clothing, food and
  housing and the money needed to buy water,
  electricity, coal or gas and to pay for
  compulsory education fees for minors was also
  taken into consideration.
• The minimal social security standard of the city
  residents is 300 yuan per person per month in
  Beijing in 2004. The average nation-wide
  standard is 150yuan per person per month in the
  early 2002.
• In 2001, 11.7 million people enjoyed the minimal
  social security and the number was increased to
  19.31 millions in 2002 and 22.47 millions in 2003

Ensure the basic living for urban poor, and help
them development in sustainable
69
44 Pension insurance

• In 1995, the State Council enacted Decisions
  about Building the Uniform Basic Pension
  Insurance System for Employees of the
  Enterprises.
• The ratio of basic pension insurance paid by the
  enterprises generally cannot surpass 20 of the
  overall amount of the enterprises salary
  (including the part goes to the personal account)
  
• The basic pension insurance paid by individual
  shouldnt be lower than 4 of his/her salary in
  1997. It has been increased by 1 every two years
  since 1998 and finally reached 8.

70

• The individual account of basic pension insurance
  should be built for employees according to the
  amount of 11 of his/her charging salary. The
  insurance fee should be totally recorded into the
  individual account and the rest are paid by the
  enterprises. With the increase of the ratio of
  individual payment, the part paid by the
  enterprises should be decreased to 3.
• Until 2002, the basic pension insurance in China
  covers 147.36 million people. Among them, 111.28
  million people are employees and 36.08 millions
  are the retired.

71
45 Unemployment insurance

• In 1999, the state formally enacted and
  implemented Statute of Unemployment Insurance
• Ensure the basic living of the lay offs during
  the period of unemployment and help them to be
  re-employed.
• Include unemployment insurance premium paid by
  the enterprises and government agencies and
  schools and their employees interest rate of the
  unemployment insurance funds fiscal subsidy
  other capitals legally classified as unemployment
  insurance funds.
• urban enterprises and government agencies and
  schools should pay 2 of the total salary as
  unemployment insurance premium and their
  employees should pay 1 of their salary as
  unemployment insurance premium.

The policy provides livelihood security
resources for the employees with the possibility
of unemployment in the future.
72
46 Medical Insurance

• In 1998, State Department issued Establishing
  Basic Medical Insurance System of the Town
  Employees
• The main purpose of this reform was to accelerate
  the reform on medical treatment system so as to
  guarantee the basic medical treatment of the
  employees.
• The agencies and employees should pay for the
  basic medical premium jointly. The ratio that the
  agencies take on should be about 6 of the total
  amount of the employee salary and the ratio that
  the employees have to afford usually accounts for
  2 of their salary income.

73
47 Work Injured Insurance

• Work injured insurance is a social security
  system, providing compensation and help to
  laborers who suffer from the injuries and
  diseases at work and ensuring the instant medical
  treatment?living security?economic compensation
  and recovery of working ability
• Regulations on Insurance of Work Injured was
  put into effect in 2004.
• The fund of work injured insurance consists of
  premium of injuries at work, interests of the
  fund of work injured insurance and the other
  funds that are put into the fund of insurance of
  injuries at work according to the law.

74

• The state determines the different premium rates
  by the injuries at work risk degrees in different
  trades and professions and decides a series of
  rate ranks within each trade according to the
  factors like the usage of premium and occurring
  rate of injuries at work.
• the agencies pay the premium of injuries at work
  on time and the employees not pay for that. The
  amount is the salary of all the employees
  multiplying the rate of premium payment of the
  unit.

75
48 Birth Insurance

• Proposed Measures of Birth Insurance of the
  Enterprise Employees was put into practice in
  1995.
• The main purpose is to maintain the legal right
  and benefit of the female employees in
  enterprises, to ensure their necessary economic
  compensation and medical treatment
• the enterprises pay for the insurance premium to
  the social insurance agencies according to the
  certain proportion of their total sum of salaries
  to establish the bearing insurance fund. The
  individual employees do not pay for bearing
  insurance.
• The maximum picking-up proportion of birth
  insurance premium cant exceed the 1 of the
  total sum of salaries.

the policy is of great importance to the security
of the special rights and benefits of the female
employees. Its also significant to the security
of the rights and benefits of the poor employees.
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49 Accumulated Fund for Housing

• This policy is a compulsory long-term
  fund-reserve policy applied and developed in the
  town housing reform in our country.
• In 1999, Regulations on Accumulated Fund for
  Housing was issued and put into practice.
• it is the long-term reserve-fund for housing paid
  by the government departments, state-owned
  enterprises, town group enterprises, foreign
  enterprises, town free enterprises, other town
  enterprises and institutional entities (agencies
  for short) and their employees at work.
• The amount of money they have to pay for the fund
  each month is monthly average salary in the
  previous year multiplying the proportion of the
  employees fund.
• The accumulated fund for housing paid by the
  agencies each month is the employees monthly
  average salary in the previous year multiplying
  the proportion of the fund paid by the agencies.

77
3.Pro-poor Macro-policies

78
50 West development policies

• Background
• In the mid of the 1980s, for the reason that the
  central government gave development priority to
  the coastal area, after ten years imbalanced
  development, the disparity between east and west
  were enlarged gradually.
• By the end of 1990s, along with the series of
  problems caused by the gradually expanded region
  disparity and the inequity of region development
  policies, the central government realized the
  economic, social and political importance of the
  west area enriched with affluent resources and
  large ethnic minorities.
• In the second half year of 1999, in the purpose
  to reduce the disparity between the inland and
  the wealthy coastal area the west development
  policy was officially proposed.

79
Included provinces

• Chongqing
• Sichuan
• Guizhou
• Yunnan
• Tibet
• Shaanx
• Gansu
• Qinghai
• Ningxia
• Xingjiang
• Inner Mongolia
• Guangxi

The west region covering an area of 6.85 million
square kilometers, 71 of the whole country and
the population is 365 million, 29 of the whole
country.
80
Important development field and way

• Implementation of west development includes
  measures of four domains
• infrastructure construction
• ecological protection
• adjustment of industrial structure
• development of science and technology , education
  and human resources.
• The central government supported the development
  of west area mainly through preferential
  policies, financial support, enlarging input on
  infrastructure and environmental protection and
  so on.

81
Achievement

• The input on west development of the central
  financial construction fund amounted to 460
  billion RMB ,The central financial transfer
  payment and special subsidy fund surpassed 500
  billion RMB
• The state constructed 60 key projects in west
  area, with the investment approximately of 850
  billion RMB
• Road opened to traffic newly increased by 91000
  kilometers. The newly built railway laid is
  4066.5 kilometers
• The total installed capacity of the construction
  of "west electricity delivers to the east"
  accumulated to 36 million kilowatts with the
  power transformer line of 13300 kilometers.

82

• Within 2004 " west gas delivers to the east" has
  realized commercial air feed.
• By the end of 2004, west area has completed 118
  million Chinese acres of returning cultivated
  land to forestation an