Incentive for rural finance

THE CUT IN THE RESERVE REQUIREMENT ratio for rural financial institutions is a small step to facilitate the flow of credit in China's rural areas.

However, to narrow the country's huge urban-rural development gap, more such financial support is badly needed to upgrade the rural economy and raise farmers' incomes.

On Tuesday, the central bank announced a 2-percentage-point cut in the reserve requirement ratio for rural commercial banks and a 0.5-percentage-point cut for rural cooperative unions beginning Friday.