China Tax Cuts Aim at Curbing Rural Unres

NERVOUS over spreading rural unrest, the Chinese government has blocked local officials from levying an array of taxes and fees on discontented farmers.

People's Daily, the Communist Party newspaper, said June 21 that the State Council, China's Cabinet, had ordered an end to 37 taxes and fees to stem discontent among the country's 900 million farmers. The ban removes fees for "social stability," "toilet improvement," and other taxes.

The moves come amid a growing number of outbursts by cash-strapped farmers who, Chinese and Western observers say, pose the most volatile threat to Beijing's Communists.

In recent years, stagnant or falling grain prices, rising farm costs, and new demands by local Communist Party officials have fueled dissatisfaction among farmers. The breakup of communes, which launched China's economic reforms more than a decade ago, have left many farmers at the mercy of market forces and rising costs while crop prices have remained largely under government control.

Earlier this year, farmers in Sichuan, Anhui, and other provinces protested over useless IOUs issued by local cadres to buy grain, much of which is still purchased by the government. Farmers rioted when they were unable to redeem the IOUs from local officials who had used the agricultural funds for construction and to establish economic industrial zones.

Recently, farmers in Sichuan attacked officials' homes and offices to protest a new road-building tax. In drought-stricken Henan, desperate farmers battled over fertile land claimed by two counties.

Local officials use the taxes and fees to operate schools and build roads and irrigation systems. But in recent months, the farmers' cash crisis and growing corruption among local Communist leaders has eroded the party's support in the countryside and jolted Beijing leaders to take corrective steps, Chinese observers say.

"Alleviating peasants' burdens is not merely an economic matter but also a political issue," Chen Junsheng, a member of the State Council, told Beijing leaders last weekend.