HEFEI - An orphanage in East China's Anhui province, formerly run by a villager, has become a government-funded welfare home for abandoned children after 18 years of struggling to exist.

Wang Jiayu Orphanage in Yingshang county, named after its founder, moved from its shabby compound into a 6.6-million-yuan ($1.04 million) new building financed by the local government on Sunday.

Wang, 72, smiled openly as the children played while being shown around the new facility, which covers three hectares and is five times its former size. "This is the best new year gift for me and the children."

The new welfare home has a playroom, a reading room and recuperation rooms for mentally impaired children and those who suffer from autism and cerebral paralysis.

Each bedroom has a washroom and balcony and accommodates two to three school age children, or four to five preschoolers.

The children's names are posted on their bedroom doors. At least half of all the young dwellers share the same family name, "Min," meaning people in Chinese.

"The beginnings of most of the children's lives were unknown and they were too young then to remember their biological parents, " said Wang. "So I chose their surnames for them."

Wang's one-man campaign began in 1994, when he took home an abandoned child who was dying of hunger near a scrap heap. More children were secretly dropped at his door after that, mostly orphans or babies abandoned because they had congenital diseases.

Wang, who never received formal schooling and was a carpenter by trade, was not well off himself. His wife suffers epilepsy and four of their five children are mentally impaired.

But, even so, over the past 18 years, he has fostered more than 500 children. At least 70 percent of them are mentally or physically disabled.

Before the government takeover of the orphanage, he was taking care of more than 200 children, all of whom call him "dad."

"They all need a helping hand," said Wang, who has struggled to raise money for the children with the help of villagers and volunteers.

Yingshang county is among the poorest in China and the local government was unable to provide Wang with any material support.

In the 1990s, the civil affairs bureau authorized Wang to be the exclusive retailer of cinerary caskets, a business that yielded an annual income of 60,000 yuan.

But Wang's business and all his property were ruined in a devastating flood in the summer of 2003 and he has since relied on donations and loans to keep the orphanage running.

In 2010, the county government received a special fund from the state for a new welfare home under the charge of the civil affairs bureau.

Starting from October, 2011, each orphan aged under 18 receives a monthly allowance of 1,000 yuan financed by the provincial and local treasury, according to a new central government policy on fostering orphans.

Wang was named the honorary president of the new welfare home. He and his team of nurses have also moved in with the children. "Now at last, I don't have to worry about these children's existence."

China had at least 655,000 orphans and abandoned children as of 2010, according to Ministry of Civil Affairs.

The government grants a monthly allowance of 1,000 yuan for those living at welfare homes and a minimum of 600 yuan a month for children who live with relatives.