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China's consumer price index is expected to rise about 3.3 percent in 2007, moving above the government target of three percent, the State Information Centre said on Wednesday. The forecast came after China's consumer price index (CPI) hit a 27-month-high of 3.4 percent in May, driven by an 8.3 percent rise in food prices, from 3.0 percent in April and 3.3 percent in March. "Consumer inflation in 2007 is to be pushed up by food price increases, and food price increases are the result of a surge in meat, poultry and egg prices," the think-tank said in a report published on the China Securities Journal. The centre is a research body under the China National Development and Reform Commission, China's top planning agency. The report said the rise in meat and other foods would not slow considerably until the last quarter of this year because of high grain and cereal prices. But it did not provide any forecast on policy moves. A surge last month in the price of pork, a staple meat on Chinese dinner tables, raised concerns about inflation. After the May inflation data was released last week, Premier Wen Jiabao said the government was prepared to tighten policy further to restrain the economy and inflation. Various ministries also scrambled to respond in an effort to ease public worries about inflation. The Ministry of Commerce said pork prices in major Chinese cities had dropped slightly in the first 10 days of June. But according to the report, meat and egg prices could rise even further in coming weeks, following a 26.5 percent surge in meat prices in May. Besides food, inflation pressures are under control, the report said. Prices of industrial products are unlikely to rise significantly, and labour cost increases in China have yet to be reflected in consumer inflation. It said the pace of inflation in 2007, although it is exceeding Beijing's target, is still within a range the government can control. Monetary tightening and yuan appreciation in China are expected to have some cooling effects on inflation.

Rural infrastructure and social services have improved remarkably in recent years, thanks to government efforts to boost the countryside, the nation's latest agriculture census has revealed.The National Bureau of Statistics yesterday released its first report based on the 2006 census, which is designed to reflect the overall development of rural areas and the agriculture sector, as well as the living standards of rural residents.The percentage of villages which had access to road links, telephone services, electricity and TV broadcasting by the end of 2006 were 95.5 percent, 97.6 percent, 98.7 percent and 97.6 percent, according to the survey.For every 100 households in rural areas, there were 87.3 television sets, 51.9 fixed-line telephones, 69.8 mobile phones, 2.2 computers, 38.2 motorbikes and 3.4 automobiles. Meanwhile, 74.3 percent of the villages had clinics; and at the township level, 98.8 percent of towns had hospitals, and 66.6 percent, nursing homes for the elderly."The figures show the government's increased spending to improve rural livelihoods has started to pay off," said Du Zhixiong, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences (CASS).The central government has launched a slew of initiatives in the past few years to speed up the development of the countryside, which has lagged behind urban areas over the years.The aim is not only to bridge the income gap between urban and rural areas, but also improve the social services in the countryside. Last year, the per capita income of rural residents averaged 4,140 yuan (0), about a third of earned by urban residents.The central government plans to increase its budget for rural investment by more than a fourth to 520 billion yuan (.8 billion) this year, Chen Xiwen, director of the office of the central leading group on rural work, told Xinhua News Agency in an interview.Government spending on rural projects amounted to 420 billion yuan (.8 billion) in 2007 and 340 billion yuan (.6 billion) in 2006."The survey also reveals areas that should be further improved," said Du from the Chinese Academy of Social Sciences.At the end of 2006, only 48.6 percent rural residents had access to tap water; and only 15.8 percent of villages had garbage treatment facilities.The survey also found China had 530 million rural laborers at the end of 2006. Of them, 70 percent were engaged in agriculture work such as farming, forestry, livestock breeding, fishing and related services.That was nearly 5 percentage points down from the end of 1996, as more and more have moved to work in local factories or cities.There are now 130 million migrant workers from the countryside, about a fourth of the rural labor force.The latest census, the second of its kind, was conducted among more than 650,000 villages and nearly 230 million households. The first national agriculture survey was a decade ago.The NBS will release five other reports based on the 2006 survey in the coming weeks, which will cover issues such as the living conditions of rural residents and the environment of rural communities.The focus of the five reports will be on:The current situation of the agriculture sector and agriculture productionRural infrastructure and social servicesLiving standards of rural residentsRural labor force and employmentGeographic distribution and categorization of arable land.

SINGAPORE: China and the United States plan to set up a defense hotline aimed at improving military relations, a top Chinese general said over the weekend. Zhang Qinsheng, deputy chief of the general staff of the People's Liberation Army, made the remarks at the plenary session of a three-day security summit known as the Shangri-La Dialogue. He said the issue of the hotline between the Chinese military and the US Defense Department would be settled when he visits the United States in September for the ninth Sino-US defense talks. Zhang also told the summit that China's defense budget is authentic. As the Chinese military gradually modernizes, some have raised questions over "military transparency", and voiced suspicions on China's defense budget. So it is necessary to clarify the matter, Zhang said. "In China, defense budgeting must follow a set of strict legal procedures, and the published budget is true and authentic," he said. He added that the increased proportion of the defense budget is mostly used to make up for inflation, improve the welfare of military personnel and logistics support. "Given the multiple security threats, the geo-political environment, the size of the territory, and per-capita expense, the Chinese defense expenditure is small by any yardstick," he added. He stressed that "China is gradually making progress in military transparency following the principles of trust, responsibility, security and equality". The annual Shangri-La Dialogue, named after the Singapore hotel at which the event has been held since its launch in 2002, and organized by the London-based International Institute for Strategic Studies, opened on Friday. It gathered defense ministers and top officials from 26 countries and regions in the Asia-Pacific region and Europe to address major regional security issues and defense cooperation. Also at the meeting, the US and China turned down the heat on a dispute over Beijing's military build-up, with US Defence Secretary Robert Gates expressing optimism about future relations. Gates downplayed past US rhetoric on China's military might. "As we gain experience in dealing with each other, relationships can be forged that will build trust over time," Gates said. China Daily - Agencies

China's State-owned Sinochem Corporation, one of the world's top 500 companies, had profits of more than eight billion yuan (US.1 billion) in 2007, up 95 percent over the previous year, the firm said on its web site.The Beijing-headquartered company didn't elaborate on these figures. Preliminary estimates showed that revenue topped 200 billion yuan, up 19 percent. Total assets exceeded 100 billion yuan. Sinochem, which began as a trading company in 1998, is involved in a range of businesses including agriculture, energy, chemicals, finance and real estate.Sinochem International, one of its subsidiaries, said last month that it would buy part of the business of Monsanto Company, a US-based agricultural company.Under the terms of the agreement, Sinochem will purchase the assets related to Monsanto's pesticide business and certain other assets in China's Taiwan Province and countries including the Philippines, Thailand, Vietnam, India, Pakistan and Bangladesh.

XI'AN -- Lawmakers in Northwest China's Shaanxi Province enacted a law on Saturday that is intended to improve protection of the Qinling Mountains, a habitat of endangered giant pandas.The law, which will take effect on March 1, is aimed at preserving biodiversity, preventing soil erosion (which averages 84 million tons a year) and promoting harmony between man and nature in the mountain range, which is a divide between China's north and south.It requires all future development projects in the Qinling Mountains to be assessed for their possible impact on the ecology and bans real estate projects and polluting industries in nature reserves, where the ecology is more vulnerable.The law also bans mining and resource exploration in nature reserves and forest parks.Local governments must ensure immediate demolition of existing projects that are potentially harmful to the ecology, it says.The Qinling range, which largely spans Shaanxi Province, covers more than 50,000 square kilometers.The range is home to approximately 300 Qinling pandas, a sub-species of giant pandas on the verge of extinction, and many other rare animals under state protection, such as golden monkeys, the red ibis and antelopes.