Rural education requires funding rethink Liu ZeyunChina Daily Updated: 2006-02-13 05:28
The current financing system underpinning rural education cannot pay for a
free nine-year compulsory education. The system must be reformed to ensure
adequate funding for the economically underdeveloped countryside.
Since the mid-80s, China has gradually established an educational funding
system based on local resources, including both fiscal and non-fiscal funding.
County-level fiscal funding has been the backbone of rural educational
financing. In 2001, the State Council decided to reiterate the role of local
governments in supporting compulsory education.
This allows both the public and local governments to develop compulsory
education.
China suffers from wide income gaps between different regions. Official
surveys show urban residents earn an average of three times as much as their
rural counterparts. Considering the benefits city dwellers tend to enjoy, such
as pensions, medical care and unemployment insurance, the gap could be said to
be wider.
This has made it extremely difficult to pool funds in rural areas to support
local compulsory education. Many poor farmers have to spend most of their income
on the basics to feed their families and pay for agricultural production. They
have to cut everyday expenditure or production costs if they are to come up with
tuition fees for their children.
Local governments are not rich enough to pay for compulsory education. Since
1994, when China launched its taxation sharing system, under which the central
and local governments share national revenues, the lower-level governments have
been less powerful financially.
In 2001, for example, the per capita disposable funding of the central and
provincial governments was 27,228 yuan (US$3,280) while that of county-level
coffers was only 435 yuan (US$52). In western regions, funds for developing
social services are even more restricted.
But the 1986 Law on Compulsory Education stipulates that developing
compulsory education is one of the major tasks assigned to county-level
governments, many of which are financially incapable of accomplishing that task,
especially in the poor western regions.
The funding shortages will affect the future prospects of many rural
children, who could have improved their situation through education.
The central leadership has hammered out a national development blueprint that
declares rural development, including compulsory education, to be a policy
priority. It has put forward the idea of building a new socialist countryside, a
drive that is expected to change the social and economic landscape of rural
areas in an all-round way.
To that end, the financing system for rural compulsory education must be
reformed.
Compulsory education should be free. But given current conditions this is not
realistic. Perhaps the government could first provide free compulsory education
in poor rural areas before spreading this service nationwide in the future, when
it becomes financially possible.
Financing is an inevitable obstacle to providing free education. Before 2003,
when China began to implement its tax-for-fee reform in rural areas, fiscal
support and extra educational fees supported compulsory education. Since then,
only fiscal support has been available so funding shortages have worsened.
The experiences of developed countries show systems that rely on county-level
coffers to shoulder the lion's share of compulsory educational costs block the
development of a country's education provision. These countries have shifted
part of the cost of compulsory education to provincial and central governments
and established a regime that shares costs among central, provincial and
county-level coffers.
An advisable solution for China is for the central government to pay for
teachers' wages, which are currently drawn from county-level coffers. Economists
estimate the costs will amount to 50 billion yuan (US$6.2 billion), which
accounts for less than 5 per cent of annual central fiscal income. If just
teachers in western regions are considered, only 23.2 billion yuan (US$2.8
billion) would be needed, according to Lin Yifu, a renowned economist from
Peking University's China Centre for Economic Research.
Such an arrangement is affordable for the central government.
Local governments will shoulder the costs of infrastructure and other
expenditures.
Since the wages of teachers account for most of the expenditure on compulsory
education, such an arrangement will solve the problem of funding shortages in
rural areas.
The central government has poured vast sums of money into compulsory
education in rural areas in the form of payment transfers, and has promised to
invest more. This will do much to bridge the educational gap between prosperous
urban areas and poor rural regions.
As for provincial governments, they should establish grant systems to support
students from poverty-stricken families.
Some provinces have started to implement such schemes, but more must follow
suit.
The author is a researcher at the School of Economics and Business
Administration of Beijing Normal University.
(China Daily 02/13/2006 page4)
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