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Baoyun Qiao and Anwar Shah
T A B L E 4 . 3 Expenditure Shares of Various Orders of Government, 2003 (percent) Expenditure items
Capital expenditure Operational expenditure Agriculture Education Scientific research Health care Social security Public administration Public security, procuratorial, and justice National defense Foreign affairs Foreign aid Consolidated government expenditure
Central
Provincial
Subprovincial
All orders
44.4 22.7 11.9 8.2 63.5 2.8 11.4 19.5
23.1 26.2 46.5 14.6 22.8 22.3 39.3 10.5
32.5 51.1 41.6 77.2 13.7 74.9 49.3 70.0
100 100 100 100 100 100 100 100
5.4 98.8 87.3 100.0
25.4 1.2 12.7 0
69.1 0 0 0
100 100 100 100
30.1
18.5
51.4
100
Source: Data from Ministry of Finance of China.
of the total. In general, education is divided into basic, higher, and vocational education. Vocational education is mostly left to the market.2 Basic education in China includes nine years of compulsory education. The central government is the policy maker and overall planner, and it is responsible for setting up special education funds for subsidizing basic education in the poor minority areas and for subsidizing higher education. Meanwhile, the provincial government has the overall responsibility for formulating the development plan for basic education and providing assistance to counties to help them meet expenditure needs in education. The responsibility for actually implementing basic education, such as financing it, lies (in urban areas) with the cities or the districts of large cities and (in rural areas) with the counties. The education expenditure of county and lower-level governments in 2003 was US$21.2 billion, about 60 percent of the total. Basic education in rural areas has been a major concern of the central government in recent years because of the lack of access in poorer areas. New initiatives, such as the Decision on Strengthening Rural Education, which the State Council issued in September 2003, expanded the expenditure responsibilities of the central government in basic education (schooling up to ninth grade), and defined it as the shared responsibility of the central government and local governments to support students from poor families by
