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College Students to Receive Subsidy

Against Inflation

The Chinese Ministry of Finance and the Ministry of Education granted a monthly stipend of RMB 20 to each of the nations 20 million college students between March and June 2008 to help them cope with rising prices. Those from poor families, estimated to be 20 percent of the total student body, were entitled to an additional RMB 20 per month. The program received a government allocation of RMB 1.92 billion. In addition, the scholarship and assistance systems for higher education have been bolstered, with an infusion of aid totaling RMB 2,000 per student per year to cover all disadvantaged college students. About three percent of them with an outstanding moral and academic performance are also eligible for a RMB 5,000 national scholarship, while an elite 0.3 percent will be awarded an RMB 8,000 national scholarship.

China to Raise Poverty Line

The State Council Poverty Alleviation Office is drafting a new benchmark for poverty. Once the RMB 1,300 proposal has been approved by the State Council, Chinas population in official poverty will immediately double from the current 40 million to 80 million. That means more people will be eligible for poverty relief. China initially set its poverty threshold at RMB 200 in net income per head per year, and has since slightly adjusted it every year in light of the price index. The sum edged up to RMB 1,067 in 2007, and the new standard being considered is the first to reach the international standard of US $1 per day, when calculated in actual purchasing power. The latest change reflects the governments concern not only for the basic subsistence needs of theleast well-off, but also for their access to education, medical care and other social services.

Liu Mingkang: Financial Sector Reforms to Continue

Liu Mingkang, president of the China Banking Regulatory Commission, said recently that China will draw the appropriate lessons from the sub-prime mortgage crisis in the United States, but will press on with its banking sector liberalization program all the same. He noted, however, that the U.S. meltdown is a cautionary reminder to China that financial sector reform must proceed in an orderly and incremental fashion. Advance preparation, he said, is the only way China will develop the ability to manage the risks and challenges which will inevitably ensue with the opening of the countrys financial sector. “Establishing the rules is the precondition and basis for opening up Chinas financial sector,” Liu said. “Liberalizing the exchange and interest rates, and allowing the free exchange of Renminbi, are all aspects of rule implementation. We cannot put the cart before the horse.” He called for better communication and cooperation between banking regulators around the world in an joint effort to minimize financial risks.

Zeng Liying: Grain Prices to Remain Stable

Zeng Liying, deputy director of the State Administration of Grains, said recently that Chinas ample grain reserves would allow it to stabilize grain prices, despite an anticipated price hike for staple crops in 2008. After four successive bumper crops, Zeng said, both the Chinese government and farmers have a surplus of grain stocks, and, on the whole, supply and demand are in equilibrium. In the first two months of the year, grain prices in China rose by nearly 6 percent over the same period last year, slower than the overall inflation rate. China, he said, always heeds the old proverb “food in hand, peace in mind.” With grain output continuously increasing, Chinas grain reserves have remained stable and well above the international benchmark for grain security.