BEIJING - CHINA will increase the monthly subsidy for its poorest citizens in 2009, the Xinhua news agency reported on Sunday, citing remarks by the minister of finance.

Inflation last year lifted the cost of food and especially hurt the poorest Chinese. The subsidy is designed to ensure urban and rural dwellers the minimum income necessary for survival, and is set at about a fifth of average income levels.

The minimum livelihood subsidy will rise by 15 yuan (S$3.26) for city dwellers and by 10 yuan for destitute people in rural areas, Xinhua said, citing comments from Xie Xuren at a weekend conference.

In prosperous Beijing, the programme lifts urban recipients' income to 410 yuan a month, while a rural resident might be entitled to up to 170 yuan a month.

The country is building a social safety net, to replace the cradle-to-grave security once offered by state-owned enterprises.

The central government spent 276.16 billion yuan on social welfare and employment in 2008, 19.9 per cent more than it did in 2007, Xinhua said.

The government had previously announced a 10 per cent increase in pensions for retired workers. -- REUTERS