Editorials

Expanding coffers

(China Daily)
Updated: 2010-06-30 07:53

Even as many global leaders get busy trimming national debt for fiscal sustainability, Chinese policymakers have yet to reallocate to the public a larger share of its soaring fiscal revenues.

In the first five months of this year, the government's fiscal revenues jumped by 30.8 percent year on year to 3.55 trillion yuan, dwarfing the country's 11.9-percent growth in gross domestic product (GDP) during the first quarter.

Related readings:  China's revenue to hit 8 trillion yuan in 2010  China's 2009 fiscal revenue tops 6.85t yuan  China's fiscal revenue rises 20.5% in May

Admittedly, deeper pockets offer a thicker cushion during times of national crisis. But fiscal responsibility is not all about stashing away tax revenues to peg down budget deficits. For a fast-growing developing country like China, it is far more important to funnel a large proportion of government expenditure into public welfare programs.

For instance, while China's tax revenue growth has beaten even optimistic official forecasts for years, the government has lagged considerably in spending at least 4 percent of the national GDP on education. In 2008, the spending on education to GDP ratio stood at merely 3.48 percent, compared with the average international level of 4.5 percent.

Now, with the country's fiscal revenues being projected to touch 8 trillion yuan this year policymakers must mull ways to make the best use of the surplus funds.

The country has just approved an educational reform plan that requires government expenditure on education to touch 4 percent of GDP by 2012.

Why not make it happen as early as next year?

(China Daily 06/30/2010 page8)