Gov't education spending to reach 4% of GDP by 2012

The last six years have seen a big rise in government spending on education with the vice finance minister planning that investment in education hit 4 percent of GDP by 2012. The structure of expenditure is also due for an overhaul, as is the method by which funds are collected and managed. 

Vice finance minister Ding Xuedong said since 2004, China has realized free compulsory education in urban and rural areas and set up subsidy system for struggling families. Vocational education has developed fast, and higher education is getting to the common people. It is a period that has seen a fast rise in government education spending.

Ding Xuedong, Vice Finance Minister, said, "From 2004 to 2008, government spending in education increases from 400 billion yuan to 970 billion yuan, that is 14.9 percent to 16.3 percent. The percentage is now higher than the world average. Education is the top item in government spending."

Ding said the ministry is confident about its target that fiscal spending in education will reach 4 percent of GDP in 2012. But he also admitted difficulties.

Dong said, "The proportion of education spending also relies on how much fiscal spending accounts for total GDP. In 2009, fiscal spending accounted for 20 percent of GDP, 10 percentage points lower than the world's average. It puts a curb on education spending."

The vice minister noted the Finance Ministry will take various measures to raise educational spending. It will strengthen administration on tax collection and ensure stable growth of fiscal revenue. It will also adjust spending structure and put more capital injection into education. The ministry also plans to set up a long-term system to collect funds for education from various means. Lastly, the ministry will strengthen management of education spending to ensure efficient use.