China's countryside was home to 740 million people, or 56 percent of the overall population, at the end of last year. Average rural per capita disposable income was 3,587 yuan last year, less than a third of the urban income of 11,759 yuan, according to government data. The gap has doubled since 1978.

China plans to increase spending on agriculture by 52 billion yuan this year to 391.7 billion, spend 10 billion yuan on rural education and 2.8 billion yuan more on health, Wen said today. The government will abolish school fees for as many as 150 pupils in rural areas, he said.

Bonds, money growth

The government will sell 50 billion yuan of long-term construction bonds this year, down from 60 billion yuan planned for 2006, according to Jin. The drop continues the winding down of a fiscal stimulus that began in 1998 to shield the economy from the impact of the Asian financial crisis.

The government will focus on strengthening exchange rate management and protecting the environment, Wen said. China will set up a 50 billion yuan fiscal stability fund, Jin said.

The growth of M2, the broadest measure of money, will be 16 percent this year, according to a separate report by the National Development and Reform Commission. China will curb real estate investments, and government spending will be 130.4 billion yuan, the report said.

China's fiscal deficit was 208 billion yuan in 2005, compared with a target of 300 billion yuan, according to previous government data.

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