In the latest step in the country's fight against poverty, China's cabinet released a plan on Tuesday that will enable the poor to share earnings from local hydropower plants and mining projects.
To pilot the reform, the government will choose a maximum of 20 projects in impoverished contiguous areas and counties targeted in the state poverty alleviation program, according to the State Council plan.
Local rural residents will be able to acquire stakes in such projects with compensation they receive for land occupied by the project construction, the plan said.
This way, rural residents get proceeds from the operation of the projects, with priority given to registered poor households.
The reform will be carried out from late 2016 to the end of 2019, and the chosen projects will start construction in 2017.
The environment will be strictly protected during the project, the plan said.
By the end of 2015, China still had 55.75 million people living in poverty, equivalent to the entire population of a medium-sized country.
The government has named poverty reduction as one of its top priorities, pledging to eradicate poverty in China by 2020.
More than 600 million Chinese were lifted out of poverty over the past three decades -- about 70 percent of the global total.
The reform was part of the country's "precision" poverty relief, or targeted efforts to help specific impoverished groups, said Yang Qian, an official with the National Development and Reform Commission.
The poorest regions in China are rich in water or mineral resources, but development projects in these areas have done little to bring local people out of poverty due to ineffective profit-sharing.
With these reforms, poor people will get long-term stable proceeds from the exploitation of local natural resources, compared with the current lump-sum compensation payments, Yang told a press briefing,
"If the pilot projects go smoothly, the reform will allow local residents to get higher proceeds than they receive now," Yang said. "But there are uncertainties too, depending on market changes and business operation."
To ensure the proceeds, authorities should choose projects that are economically viable with good profitability prospects and a short period of construction to pilot the reform, the plan said.