China's parliament has announced plans to abolish the country's long-standing agricultural tax at a time when social unrest and a deepening income divide are raising official fears about stagnant farm incomes.
China's economic development has been accompanied by widening income disparities, said Liu Jibin, a member of the National People's Congress, China's legislature.
"The gap between agriculture and industry, and between the countryside and cities, is steadily growing and rural problems continue to constrain China's economic and social development," he said, the official Xinhua News Agency reported on Sunday.
The National People's Congress rarely questions Communist Party policy, but it plays a role in drafting and refining legislation.
Its Standing Committee - or ruling inner-circle - began a five-day session on Saturday to discuss the agricultural tax, as well as amendments to China's criminal law, and steps to protect workers from mistreatment.
In 2004, China's Prime Minister Wen Jiabao promised to gradually abolish the agricultural tax over five years.
Since then, 28 of China's 31 provinces and regions have abolished it, and nation-wide abolition will take effect from the start of 2006, Xinhua reported.
The tax collected only 1.5 billion yuan this year, and it amounted to just 1 percent of China's total tax revenue last year, said Liu, the legislator.
"Abolishing the agricultural tax won't significantly reduce government revenue," he said.
But the tax, introduced in 1958, has long been criticised by farmers and agricultural experts as an unfair burden, because farmers must pay it regardless of how little income they earn or even whether they plant crops.
The tax now only accounts for a fraction of farmers' incomes.
But with grain prices falling in 2005 and the government's efforts to raise farmers incomes losing momentum, the move is an important symbolic gesture, said Qin Hui, an expert on rural China at Tsinghua University in Beijing.
"This shows how seriously the central government is treating rural problems," Qin said of the tax move.
"But still we have to see what happens - I think a rebound in farmers' burdens in some form will be difficult to avoid."
Qin said that removing the tax, combined with rising government debts and growing demands on public services, was adding to government financial straits in many parts of the countryside, and local officials might devise ways to reintroduce taxes.
The National People's Congress is also considering amendments to China's criminal law, as well as measures to protect workers from slave-like treatment by employers.
Chinese policy advisers have recently warned the government that stagnant rural incomes are fuelling social discontent and there have been growing protests in the countryside, most recently in Dongzhou, in southern Guangdong province.
Farmers' average income is likely to grow about 5.8 percent in 2005, Li Peilin, a sociologist at the Chinese Academy of Social Sciences who advises the government, said on Wednesday.
Li estimated that urban residents' incomes are about 6 times higher than rural residents, taking into account the state-backed medical and healthcare benefits that urban residents receive while rural residents do not.
Last year, China's 760 million or so rural residents earned an average 2,936 yuan ($367) per head, but in parts of inland China the level is much lower.
Despite official efforts to raise farmers' incomes, the gap will be difficult to narrow, Li said, according to a report on the Chinese government's official Web site.
Li said that "many new factors are still constantly expanding the income gap", including China's entry into the World Trade Organisation in 2001, which required it to slash tariffs on farm imports.
"We feel that the sustained widening of this problem may be gradually reined in, but it won't be possible to fundamentally turn it around in the short term," he said.
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