A circular released by the State Council on Oct 18 plans to benefit residents living in poor regions through resource development, according to Economic Daily.

Many poor areas in China have rich resources such as hydropower and ore, but the current profit distribution mechanism of resource development brings few benefits to the local residents.

“Some people complain that developers, such as enterprises, have occupied lands, removed residents, took the profits away and damaged the environment. But the local governments and residents have not gotten their share of the profit from the resources,” said Yang Qian, an official from the National Development and Reform Commission.

The policy is aimed at changing the current mechanism of land compensation fee into equity sharing, so that residents who lose their land can enjoy annual dividends, instead of just receiving a one-time compensation.

“Low-income residents will get longtime, stable earnings after the reform,” Yang Qian said.

According to the circular, assets that can be transferred to equity share are limited to land compensation fees for non-construction land, which is entrusted to rural collective economic organizations.

Poor families who are officially registered will have priority in the profit distribution, the circular said.

In addition, the new distribution mechanism will serve as an alternative to the current one. “Local families have the right to choose,” Yang said.

In order to encourage developers to participate in the plan, the government will offer favorable policies, including project subsidy, cutting registration procedures and land costs, Economic Daily reported.