Rural spending will total more than US$3.7 billion this year, up 11-12% on 2005, as agricultural issues take center stage at the meeting of the National People's Congress in March. Chen Xiwen, deputy director of the State Council's Leading Group on Financial Reforms told the Wall Street Journal that the increase in spending, which is likely to exceed the 2006 economic growth rate, would be backed up by further tax cuts in an attempt to reduce the widening rural-urban wealth gap. Local governments, which have been short of cash since the abolition of agricultural taxes, are to receive US$9.6 billion from the central government, with city authorities chipping in a further US$3.1 billion. However, Chen said the funding would still fall short of requirements by around US$1.2 billion.
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