The confidence Financial Minister Jin Renqing displayed when answering journalists' questions yesterday was a good pointer to China's growing fiscal strength.
Swelling national coffers are essential to improving living standards. Without adequate fiscal strength, how would policymakers respond to growing public demand for better education, medical care and other public services?
However, while elaborating on people-first budget priorities, the financial chief also shed light on important problems in reforms to key social programs.
The development of China's social programs has long been constrained by a lack of funds, as policymakers have prioritized economic growth over social services.
But after about three decades of fast economic growth, the country is now financially prepared to fund programs that can substantially raise the living standards of the masses.
Nevertheless, sluggish reforms of those programs themselves are now emerging as a roadblock to the efficient use of additional money.
Jin yesterday expressed his whole-hearted support for a huge increase in government spending on education. But he also pointed out that even with a huge injection of funds the education system will not improve without more qualified teachers. A training system for teaching staff is urgently needed.
On public finance for healthcare, his observations are even more pertinent to the disappointing reality of the country's health service reforms. This year, the central government plans to increase healthcare expenditure by 85.8 percent over the previous year to 31.2 billion yuan (US$4 billion). Yet, the health service itself has not even come up with a reform plan.
More funding is definitely needed to boost the supply of basic medical services. But that does not mean, as a developing country, China can afford an all-free medical system wholly supported by government money.
It is necessary to distinguish as soon as possible which parts of public healthcare can benefit from public funds.
To ensure that the enhanced fiscal support will deliver the goods, it is high time we sped up the necessary reforms of social programs.
(China Daily 03/10/2007 page4)
