China will work out a permanent mechanism to improve rural infrastructure as part of its efforts to boost agricultural development and close the widening wealth gap between urban and rural areas, a senior official said in Beijing on Thursday.

The government would expand its agricultural budget and channel its revenues from land-use charges and arable land occupation tax to rural areas, he said. Local governments would also set aside part of their city construction budgets for rural areas.

This fresh move enables industry to promote agriculture and urban areas to help rural ones as agriculture remains the weakest link in the national economy.

The central government was likely to raise its 2008 rural budget to some 520 billion yuan ($72.2 billion), compared with last year's 392 billion yuan, he said.

China invested 420 billion yuan last year in the countryside, representing a record-high increase of 80 billion yuan from 2006.

Chen's remarks came after the State Council, China's cabinet, issued on Wednesday the first policy document of the year, reaffirming the central government's commitment to the vast countryside.

Both government expenditure and fixed asset investment in the countryside must "expand at a markedly faster pace" this year, the document said.

Local governments above the county level must ensure that growth in agriculture spending would outpace their revenue growth, it said. It added they should place more emphasis on building infrastructure and developing social undertakings in the countryside than in cities.

More investment would go to the construction of infrastructure projects in water, gas and electricity, as well as in agricultural technology, among others.

Also covered were investments in education and medical services and subsidies for farmers and agricultural production.

The document also said China would fully protect farmers' land rights and migrant workers' interests.

An equal employment system for rural and urban laborers would be established, with farmers who have a stable job and residence in cities having access to the status as urban residents. Their income, social security, housing and children's education would be better guaranteed.