China will set up a minimum living allowance system for rural areas by the end of this year, the State Council, the country's cabinet, said yesterday.

Despite years of poverty alleviation work that has lifted millions out of poverty, part of the rural population is still very poor. Such people are in urgent need of government subsidies for their survival, a State Council statement said.

"The work (to set up the system) is of great importance to promote rural social economic development, to reduce the urban-rural income gap and to maintain social equality," the State Council said.