Han Jun & Guo Jianjun

Research Report No. 041, 2008

Rural infrastructure and public service system constitute important support for the development of agriculture and rural economy. They also constitute important material basis for the improvement of the production and living conditions of the peasants. Accordingly, improving rural infrastructure and public services is an important part and a key link of building a new socialist countryside. In recent years, the government has increased inputs in the construction of rural infrastructure and public service system. But due to lack of funds, the outdated rural infrastructure has not witnessed any major improvement and the rural public services have lagged behind those in the urban areas. At present, this urban-rural gap can be attributed, to a very large extent, to the excessively wide urban-rural gap in the supply of public services. As the Chinese economy has entered a development period, in which "agriculture is promoted by industry and countryside is supported by city", China has already possessed the basic conditions and capacities to shift the emphasis of the construction of infrastructure and public service system to the rural areas.

I. Current State of Rural Infrastructure and Public Service System

The supply of public products in China's rural areas has long observed the basic principle of "self-reliance first and government support second". The supply of rural public products has been mainly relying on the peasants themselves, instead of public finance. In supplying education, medical care, social security, public infrastructure and other public services, government financial inputs have clearly leaned toward the urban areas. The result is a huge gap between the looks of the urban and rural areas and between the public services enjoyed by the urban and rural residents. After the government decided to establish a public finance system in 1998, it failed to deal with the issue that public finance should cover the rural areas. The notion of covering the rural areas with public finance did not appear until the 16th Party Congress which introduced the concept of a balanced economic and social development. The 5th Plenary Session of the 16th Party Central Committee defined the construction of a new socialist countryside as a major historic task and decided, for the first time in history, to take the public finance coverage of the rural areas as policy guidance. Beginning with "three reductions" (reduction of agricultural tax, reduction of tax on special agricultural products and reduction of charges for rural education) and "three subsidies" (subsidies for grain production, seeds improvement and the purchase of agricultural machines), a series of policies were introduced to cover the rural areas with public finance. As policy coverage was constantly widened, the support of public finance to rural development shifted from the past narrow scope of agricultural production to the construction of rural public services and public infrastructure. Gradually, rural education, health, culture, road construction, drinking water for humans and animals, and rural energy were included into the scope of public financial expenditure. As the governments at all levels have increased their inputs in improving rural infrastructure and social undertakings since the 16th Party Congress, rural infrastructure construction has been developed unprecedentedly in terms of both scale and intensity. As a result, rural social undertakings have developed rapidly.

1. Rural transportation conditions have improved

Since 2003, the government has invested huge amounts of funds in rural road construction. Statistics indicate that during the four-year period from 2003 to 2006, a total of 870,000 kilometers of rural roads were either constructed or reconstructed, with 580,000 kilometers being pitch or cement roads. In 2006 alone, 325,000 kilometers of rural roads were constructed or reconstructed, 458 townships or towns and 17,764 administrative villages were connected with highways, and 1,708 townships or towns and 43,962 administrative villages were connected with new pitch or cement roads. By the end of 2006, the total mileage of China's rural highways had reached 3.026 million kilometers, 98.2% of the townships or towns and 86.4% of the administrative villages had been connected with highways, and 80.6% of the townships or towns and 60.3% of the administrative villages had been connected with pitch or cement roads.

2. Construction of rural water projects gains momentum

In 2006, China's investment in rural drinking water projects under construction was RMB25.41 billion yuan, of which projects worth RMB10.77 billion yuan was completed. In the year, 29.45 million more people had access to safe drinking water, bringing the total number to 559 million people. At the same time, the construction of rural water control facilities, featuring the water-saving transformation projects in the large irrigated areas, the water-saving irrigation demonstration projects and the water control experiments in the pastoral areas, continued to advance. The projects under construction involved a total investment of RMB76.47 billion yuan, of which projects worth RMB26.42 billion yuan was completed. Nationwide, the effectively irrigated areas totaled 57.078 million hectares. The country had 285 large irrigated areas, each being 300,000 mu, and the effectively irrigated area totaled 14.612 million hectares. The area under water-saving irrigation reached 22.426 million hectares. In particular, the area under channel seepage control irrigation totaled 9.594 million hectares, the area under low-pressure pipe irrigation totaled 5.264 million hectares, the area under spray irrigation, drip irrigation or seepage irrigation totaled 3.578 million hectares, and the area under rain-collecting irrigation and other engineering water-saving irrigation totaled 3.99 million hectares. The seepage control channels accounted for 27.2% of the total length of various channels in the irrigation areas, each being more than 10,000 mu.

3. Construction of rural information infrastructure has further intensified

Currently, 97% of China's townships and towns can be connected with the Internet and 92% of the townships and towns have broadband connections. Nationwide, there are over 6,000 agricultural websites. The "three-in-one" integrated information service platforms that incorporate the advantages of telephone, television and computer networks have covered more than 100 counties. Some provinces and municipalities have established a three-level (county, township and village) information service platform to further improve their information service system. Telephone service now covers 99% of the administrative villages across the country, and all administrative villages in 25 provinces. In 2006 alone, telephone service covered 13,740 new administrative villages, bringing the total number of rural fixed-phone users to 116.425 million. The national cultural information sharing project has also made progress. In 2006, a total of 6700 central and grass-roots service stations were established by relying on the public libraries at various levels and the cultural stations at the township, town and sub-district levels. The modern distance education project for rural Party members and cadres and the modern distance education project for rural primary and middle schools have respectively built 197,000 and 181,000 grass-roots service stations. As a result, a nationwide service network has begun taking shape and covers nearly 100 million people. It provides the peasants with effective information support for their production and life, and has preliminarily solved their difficulties in reading books and watching movies, and has enriched their spare-time cultural life.

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