The Chinese government will expand the subsistence allowance system to all rural poor, Premier Wen Jiabao announced at the opening ceremony of the Fifth Session of the Tenth National People's Congress (NPC) in Beijing on Monday.

The plan is expected to bring a poverty-stricken population of about 23.7 million under the social security net.

"We will set up a nationwide basic minimum cost of living allowance system this year for rural residents, which has great and far-reaching significance for promoting social fairness and building a harmonious society," Wen told 2,890 NPC deputies assembled at the Great Hall of the People.

NPC deputy Fu Qiping, a village head from Ningbo, Zhejiang Province, said the government's decision to cover all the rural poor under the social security net represents a "big step in poverty alleviation for the vast rural population."

About 23.65 million rural residents living in "abject poverty" in China by the end of 2006 with an annual per capita income less than 683 yuan (US$ 87.6 according to statistics of the State Council Leading Group of Office of Poverty Alleviation and Development.

Premier Wen said all local governments should set reasonable eligibility requirements for the allowances and a reasonable allowances level based on local conditions.

"Areas with financial difficulties will receive appropriate assistance from the central government budget," Wen said.

According to Wu Jianmin, spokesman of the annual session of the CPPCC National Committee that opened on March 3, an annual funding of six billion yuan (US$780 million can make nationwide rural subsistence allowance system possible, given the annual average subsistence allowance of 300 yuan (US$39 in 2005 among pilot areas.

Experts believed that extending the subsistence allowance network to all rural poor would entitle them to the benefits of the country's economic boom, and help narrow the disparities between cities and rural areas.

Rural residents' per-capita basic income is only one third of the per-capita disposable income of urbanites in China. Considering the social security system urban citizens enjoy and the rural farming cost, the real income gap between urban and rural population can mount to five to six times.

"The rural poor are the most vulnerable population who must be taken care of in the country's drive to build a harmonious society, " said Fan Gang, director of the National Economic Research Institute.

China's social security system has covered the majority of urban citizens, while migrant workers in cities and rural dwellers, who risk accidents and diseases, are not under the umbrella of social security.

The 44-year-old Hou Zhengyun from Weiyao Village of Tianying County in Anhui Province has tasted the plight of lacking subsistence allowance. Years of suffering from bronchitis and pneumonia have cost her an annual medical cost of 3,000 yuan (US$390 against a meager yearly income of 4,000 yuan (US$519 from the three-mu (0.2 hectare) farmland.

Without a subsistence allowance, her family of a crippled husband and two drop-out daughters shouldered over 20,000 yuan.(US$2597)

"We must not leave the rural population of some 900 million outside the dynamic economic development drive. Prosperity should be shared by all social members who have contributed a lot to the reform," said Fan Gan.

In particular, the allowance will help those who have lost their farmlands to development projects, he said.

Forty million farmers have lost their land over the past decade due to urbanization, with another 15 million to suffer a similar fate over the next five years, according to a report from the Ministry of Labor and Social Security in July, 2006.

(Xinhua News Agency March 5, 2007)