China will accelerate the pace of rural financial reform and provide more financial services for farmers, said a senior Chinese banking official Friday.

Rural development needs a great deal of investment and banking institutions should step up their efforts to build a solid rural financial service system, said Tang Shuangning, vice chairman of the China Banking Regulatory Commission, at a forum on rural finance in Beijing.

The Chinese government is seeking to promote rural development with the "new socialist countryside" program, which aims to improve agricultural production, living conditions and public administration in rural areas with their huge population of about 800 million.

It is estimated that some 15,000 billion to 20,000 billion yuan (US$1,875 billion to US$2,500 billion) will be needed for new countryside construction by 2020. Agriculture-related loans amounted to less than one-fifth of all lending by 2005 in China.

Financial reform in rural areas lags behind urban areas in pace, level of investment, network density, business development, management and quality of personnel, according to Tang.

China will reform major rural loan providers, including the Agricultural Bank of China (ABC), the Agricultural Development Bank of China (ADBC) and rural credit cooperatives, Tang said.

The ABC will be transformed into a state-owned commercial bank, and the ADBC will also be reformed to increase its capacity to serve agriculture, according to Tang.

Rural credit cooperatives will be turned into modern financial enterprises over a five to ten year period, Tang said.

Postal savings banks will also be established, he said.

The ABC will improve services for pillar industries in agriculture and leading rural companies, and the ADBC will increase loans to poverty-stricken areas, he said.