Shanghai digs deeper for harmony
Xin BeiChina Daily  Updated: 2005-02-22 06:11

Shanghai's decision to significantly boost expenditure on social projects has set an example that other local governments should be prepared to follow.

It was reported that the municipal government recently announced that it will shift the focus of its spending from building the city's image to improving local people's living standards. This year, Shanghai will allocate 70 per cent of its increased spending on social projects.

This is a welcome start in transforming the city's swelling public coffers into concrete benefits for its people.

Last year, Shanghai's revenue soared by 24.5 per cent to 111.9 billion yuan (US$13.5 billion).

Such robust growth, however, was not limited only to this booming city.

Thanks to an unexpected 9.5 per cent growth of the Chinese economy last year, the country's overall income hit a record high of about 2.6 trillion yuan (US$314 billion), an increase of more than 500 billion yuan (US$60.4 billion) over the previous year.

Since the end of last year there has been much talk about on how to make the best use of this unprecedented surplus to improve society.

The widening income gap between urban and rural people and that between the rich and the poor in cities demand immediate attention. And the insufficiently-funded education, healthcare and social security systems all are crying out for more money.

As the country goes all out to build a balanced society, clearly it has already become a matter of urgency to address these social problems.

Being the most dynamic part of the national economy, domestic cities are financially much better equipped than rural areas in dealing with this challenge.

It is surely no coincidence that Shanghai has taken the initiative in adopting such a people-oriented fiscal policy.

As one of the country's key economic locomotives, Shanghai now boasts a growing strength that will enable it not only to continue to contribute to economic growth, but also to provide money for social causes.

Like many other Chinese cities, Shanghai once invested heavily in urban construction to improve the city. Such projects usually bite excessively deep into local public coffers at the expense of spending on social causes.

Shanghai's about-turn represents a new style of governing that can help bring about a more caring society.

Many think Shanghai's determination to undertake a wholesale review of fiscal support for social causes will, in the long term, pay dividends.

After all, a harmonious society is a prerequisite for sustainable development for the local as well as the national economy.

Other municipal governments may have a point in arguing that fiscal support for social causes depends on the development level of the local economy.

It is true that the economic strength of Shanghai can be rivalled by few in the country. But the crux of the problem is policy-makers' determination to put people's welfare before short-term economic growth.

Though the current increase in fiscal revenue is not enough to meet all demands, local governments should be ready to give more priority to social causes.

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