China will establish a minimum living standard system to cover all rural residents in 2007. The system is designed to pull poor villagers out of poverty, according to a circular released by the State Council on Monday.
 
The circular said that local governments are responsible for setting up the system. They should adjust it in a timely fashion in accordance with local price changes for daily necessities.

Beneficiaries will be villagers who suffer chronic living difficulties due to illness, disabilities, old age, or poor living conditions, according to the circular.

Despite the sharp decrease of poverty-stricken villagers in past decades, some rural residents still face food and clothing shortages. They need living allowances.

The government will utilize a fiscal transfer payment system. Centralized payments from the national treasury will be directly deposited into the rural residents' accounts via agencies, according to the circular.

Official statistics show that China had 21.48 million rural people with an annual income less than US$85 at the end of 2006.

(Xinhua News Agency August 14, 2007)