Salaries for urbanites set to rise ����China will increase the salaries of its middle- and lower-income urban residents, to help stimulate market demand and fuel economic growth, Vice-Minister of Finance Lou Jiwei said yesterday in Beijing. ����More than 84 million people across the country are expected to benefit directly from the new policy, scheduled to be implemented this month. ����The monthly allowance for laid-off workers and the jobless, along with the basic living standards for urban residents, will increase by 30 per cent from July this year, Lou said in a press release. ����Meanwhile, the salaries of civil servants and the pensions of retired state employees will also witness moderate increases, according to their positions and seniority levels, he said. ����Pensions that state-owned enterprises owe to their retired employees by June must be paid by mid-September, according to the new policy. ����It will cost 54 billion yuan (US$6.5 billion) to implement the changes, Lou estimated. ����The state will finance most of the program, using tax revenues, including those levied on bank savings interest. ����Seven economically developed provinces and municipalities - Beijing, Shanghai, Shandong, Guangdong, Zhejiang, Fujian and Jiangsu - will pay for the salary and pension increases out of their own pockets. ����These regions need a total of 11.2 billion yuan (US$1.3 billion) to comply. ����In the remaining regions, state funds will cover 84 per cent of total expenses to implement the income adjustment policy. ����In economically underdeveloped regions without adequate funds, local governments can fix the sum of salary and pension rises within a certain range allowed by the state, Lou added. ����The new policy does not provide pay raises to employees whose income levels are directly linked to the economic performance of their enterprises. ����However, the state will work towards an improved economic climate for enterprises by adopting a series of macro-economic policies. Those include the expansion of investment in fixed assets. ����This will eventually improve the income levels of all enterprise employees, officials said. ����As to the new policy's impact on the incomes of rural residents, Lou said, swelling pockets of urban residents will expand demand for consumer goods. That translates into price increases in agricultural products and brings added profits to farmers. ����The state will also clamp down on fees in rural areas, streamline local governments to reduce expenses and relieve rural residents of some financial burdens. ����The central government has taken a series of measures to stimulate the flagging domestic economy. HomeNews 1999-09-06 Page1 Full Story in Chinese