About 40 percent of township enterprises in East China are expected to move to small towns by 2005, with 30 percent moving to the central region and 25 percent to the west, according to a circular jointly released by the Ministry of Agriculture, the Ministry of Construction and the Ministry of Land and Resources at a press conference on Monday.

Zong Jinyao, vice-director of the Township Bureau under the Ministry of Agriculture, sang highly of the strategy at the conference: "It is a key step to restructure the nation's rural economy and help to harmoniously push forward the processes of industrialization and urbanization."

Zong explained such a strategy, alongside increasing investment in infrastructure, might encourage the development of the service sector in small towns and suburbs, and, in turn, accelerate the process of urbanization.

The press conference was offered a series of statistics to prove the advantages of this strategy.

With an aim at avoiding separation and an overlap of enterprises in rural areas, the movements of township enterprises towards small towns might help to economically utilize the country's limited croplands, with an estimated saving of 15 percent on their current use.

Furthermore, assembly of township enterprises might reduce about 10 percent of the costs in public services.

Statistics also showed that environmental protection was also expected to be enhanced because an estimated 5 per cent of the total expense to combat pollution could be saved through the gathering of township enterprises.

To promote such a strategy, the central government launched a series of preferential policies to encourage the movement of township enterprises to small towns and suburbs.

These preferential policies covered myriad aspects, including registration, tax, finance, imports and exports.

The central government, however, also announced the three principles of execution of the strategy during the meeting: further sounding the infrastructure in those small towns, specializing those industrial zones, and making scientific and long-term plans.

(China Daily 09/13/2001)