China will extend its basic living allowance system to cover an extra 10 million needy rural people by the end of this year, according to the Ministry of Civil Affairs.

"The rural people benefiting from the system is already 23.115 million," said Civil Affairs Minister Li Xueju on Wednesday at a press conference.

The system covered just 20.68 million rural people by the end of June.

This year, a basic living allowance system in rural areas was formally established in all 31 provinces, autonomous regions and municipalities of China, 10 years after the similar system was set up in urban areas.

The amount of subsidies given by government varied in different areas according to their economic situations, but the basic requirement is to provide food and clothing for needy peoples both in urban and rural areas.

Li said most of the funding came from local governments, and the central government allocated funds to support the system.

"This year, the central government has allocated three billion yuan for rural areas, but most of the funds go to the relatively backward central and western regions," he said.

"I believe, with China's social and economic progress, the basic living subsidy for needy people in rural areas will be raised," Li said, noting the average basic subsidy given by government per rural beneficiary was 28 yuan (US$3.68).

"The 28 yuan is not a huge amount of money, but it has different values to different people," he said.

He said the allowance in rural areas was less than in urban areas because living costs in urban areas were higher.

Under the system, the average basic living cost in urban areas nationwide is 169.6 yuan (US$22.3) per person per month and the average basic living cost in rural areas is 71.4 yuan (US$9.39).

The subsidy equals the basic living cost minus the individual's average income. On average, the subsidy given by government is 92 yuan in urban areas per month and 28 yuan in rural areas.

In the 1950s, China introduced a system of financial subsidies for the poorest rural people. The system was funded by wealthier farmers and by collective rural work units.

In the 1990s, a similar system set up in urban areas focused on providing a minimum wage, housing, medical care and other essential benefits for the poorest citizens.

In 1994, China started to upgrade the rural system into a fully-fledged public assistance program by issuing a regulation ordering that food, clothing, medical care, housing and burial expenses should be provided for all rural residents who were childless or unable to work.

(Xinhua News Agency August 23, 2007)