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Q: China's agriculture and rural reform are now at a new stage of development. What are the main features of the stage? What is the focus of the current round of rural reforms?

A: After 20 years of reform and development, China's agriculture and rural economy have reached a new stage of development. This stage is characterized by a dramatic change in supply and demand of agricultural products; more than one-third of the rural labor force has been transferred to non-agricultural sectors; half of farmers' income comes from those sectors; and the country's agriculture has become more and more integrated with world agriculture.

The current round of agricultural reforms will focus on the following four aspects:

First, the government will stabilize the household contract responsibility system and protect farmers' legal rights by improving land management mechanism and land distribution and acquisition system.
 
Second, the State will expand the agricultural tax exemption to further ease the burden on farmers.

Third, the State will encourage the market-oriented reform of the grain distribution mechanism. Direct subsidies for grain-producers will increase; minimum purchasing price will be imposed in major grain-producing areas on varieties that are in short supply; and rewards and subsidies will be given, in the form of transfer payments, to main grain-producing counties according to sowing areas, output and the amount of commodity grain.
 
Fourth, the State will reform rural financing system, with the aim to increase financial support for rural households and rural enterprises. The increase in State budgetary expenditure and in fixed asset investment will be further tipped towards farmers, agriculture and rural areas in order to establish a stable financial system to ensure increased input in agriculture. Starting from 2005, a special fund will be set up to facilitate construction of small water conservancy projects, while continuing to finance construction of medium- and large-scale water conservancy works. Women in a handcraft workshop in Tancheng County, Shandong Province, are busy at their work. Straw products from the county exported to overseas markets.