The Chinese government will encourage township enterprises to locate in small towns, in a move to adjust their distribution and help develop small towns, according to the Ministry of Agriculture (CAM).

About 40 percent of township enterprises in east China are expected to locate in small towns, while 30 percent will go to the central region and 25 percent to the west by 2005, according to a document on urging township enterprises to locate in small towns, recently announced by the Ministry of Agriculture, the Ministry of Construction and the Ministry of Land and Resource.

Liu Zengsheng, director of the Township Bureau under the Ministry of Agriculture, said that the Chinese government will invest more in the infrastructure of small towns and direct more funds from enterprises and individuals for this purpose so as to meet the growth needs of township enterprises.

The government will also launch other preferential policies of funding and taxing for township enterprises; for example, excusing township enterprises from paying fees for urban infrastructure construction for a certain period of time, he said.

Township enterprises now are scattered throughout suburbs, small towns and even villages, making it difficult to protect the environment and reduce production costs, he noted.