The per capita consumption of rural residents in central China's Henan Province grew 16.2 percent in 2006 compared with the previous year, while the consumption of urban residents registered an increase of 9.4 percent.

This is the first time the growth rate of rural consumption has surpassed that of urban areas in the past decade in Henan, one of the country's leading agricultural bases. Hebei Province, another major agriculture base, witnessed identical change.

Ma Xiaohe, deputy director of the macro-economy research institute under the National Development and Reform Commission, said that rural consumption markets have warmed up since 2005 thanks to the central government's efforts to offer favorable policies for agriculture and farmers.

In the first 10 months of last year, the total retail sales of consumer goods in rural areas reached 2012.1 billion yuan (260 billion U.S. dollars), up 12.4 percent over the same period in 2005.

China began to build a "new socialist countryside" in late 2005 to boost the development of its rural areas, which have lagged behind in the country's booming economic development.

Last year, the country completely abolished a 2,600-year-old agricultural tax, which amounted to a saving of 33.6 billion yuan (4.3 billion U.S. dollars) for its 900 million rural residents.

Meanwhile, farmers also benefited from the central government's various subsidies totaling 39.3 billion yuan (4.9 billion U.S. dollars) last year,including those for seeds and agricultural equipment.

The per capita net income in rural areas increased 7.4 percent to 3,587 yuan (463 U.S. dollars) last year.

At the ongoing annual session of the National People's Congress, the country's top legislature, the central government has pledged in a draft budget report to invest 391.7 billion yuan (50.6 billion U.S. dollars) to support rural development, an increase of 52 billion yuan (6.7 billion U.S. dollars) over 2006.

"To thoroughly activate rural consumption, it is important to stick to the government's preferential policies for farmers and continually boost their income," said a Chinese expert on rural development.

Source: Xinhua