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Current Rural Policy’s Adjustments in China

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Current Rural Policy’s Adjustments

The agricultural and rural development in China has had a lot of changes through the past years. Now, it is have to be a priority because the rural population is fairly and agricultural sector is that foundation of the nation’s economy.

In 4004, a series of polices were focus on rural development. In the same year, a document was issued by the central government with emphasis that it extremely important to increase peasants’ income. These polices were created for 5 main proposes:

1. Increase peasants’ income

2. Repeal agricultural taxes

3. Subsidize farming

4. Implement a new rural cooperative health care system

5. Establish a minimum living standard security system

4.1 Action plans:

1. Income growth: Increasing peasants’ income is best way to decrease the income inequality among urban-rural. In 2004, the government reduced agricultural taxes, and local governments followed the steps of the central government, they also reduced various fees imposed on rural populations. By 2006, a lot of taxes and fees those were dated back 2600 years, now they were repealed. In order to boost, food production, the central government subsidized some of the costs. Consequently this action plan help rural per capita income increased rapidly. Actually some of the citizens who left in the previews years, return to the countryside and resumed farming.

2. New Rural Cooperative Health Care System: The most significant component in the rural-urban disparity, perhaps it is health care. As a result, people how live in the countryside are forced to pay for their own health care; even though they earn less money than people in urban areas. So in 2007, the central government decided to implement the new Cooperative Health Care System, which consist on each individual paying 10 Yuan to join the system and central government providing 20 Yuan for each rural citizen. Then for people living in extreme poverty, the 10-yuan membership fee is covered by the central government. By 2007, 2,429 counties around the country had adopted the system, which covered 85% of counties in China; therefore 720 million rural citizens were covered for this system.

3. The Minim Living Standard Security System: As it was mention before, it was created the rural Five Guarantee Household System in order to provide assistances to extremely poor rural citizens. But the tax reform helps the central government over local governments, who had fewer revenues to support this system. In 2006, to fulfill this gap the central government made of mandatory for local governments to ensure the proper disbursal of subsidies to extremely poor areas. According to the Ministry of Civil Affairs, 1534 counties had established this system, covering 3.85 million households with a total of 7.7 million rural citizens. Since 2006, local governments are in charge for the operation and finance of this system with subsidies from the central government.

4. Mandatory Education. Education from grades 1 to 9 is mandatory in China, But, this policy is hard to implement in rural areas because of 3 main reasons:

• The number of entries to colleges measures the quality of education, so the government invests fat more in high school education than in grades 1 - 9.

• Local government financing causes disparities between rural and urban education. Even though, the Ministry of Finances

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