(Xinhua)
Updated: 2008-01-08 22:44

BEIJING -- The Ministry of Education (MOE) said on Tuesday that fiscal spending on education in 2006 reached 634.8 billion yuan (US$87 billion), a record in terms of the percentage of gross domestic product (GDP) at 3.01 percent.

The total included both the central and local governments, a report by the MOE, the Ministry of Finance and the National Bureau of Statistics said. The report is available on the MOE website at www.moe.edu.cn.

The report said fiscal expenditures on education rose 23 percent from 2005, when such spending reached 2.81 percent of GDP.

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The central government's share of educational spending in 2006 was 53.8 billion yuan, less than 10 percent of the total. However, central spending in this category grew 53.88 percent, which was nearly three times as fast as central government revenues rose, the MOE said.

Spending on compulsory education, which is six years for the primary level and three for middle schools, saw the biggest annual increase of more than 60 percent, the statistics showed.

However, government spending on education might not rise fast enough to meet the goal of reaching at least 4 percent of GDP by 2010, Wang Rong, an education finance policy expert at Peking University, said.

"One major reason for the slow growth is the limited capability of the central government to spend significantly more on education," Wang said. Central government revenues in 2006 were roughly 20 percent of GDP.

In a market-oriented economy of the sort pursued by China since the late 1970s, the central government had gradually decreased its influence over local economies and given local governments greater say on how to spend their revenues.

"Local governments are prone to use their financial resources in sectors more profitable than education," such as transportation or communications infrastructure, Wang said. She suggested that further incentives should be offered by the central government to encourage localities to spend more on education.

"We need to work out a solution in which the fiscal education financing of 4 percent of GDP might be reasonably shared by the central and local governments," she said.

Many educational specialists have long been critical of what they see as imbalances in spending that favor higher education over compulsory schooling. "We saw a sound trend in recent years, that the central and local governments significantly increased their expenditures for compulsory education," one expert, Wang Shanmai, said.

The ministry, meanwhile, has just announced that it will increase its free textbook subsidy program for rural primary and middle schools by 28.6 percent from 2007, an investment of roughly 16.7 billion yuan annually.

Finance Minister Xie Xuren also said that funding for guaranteed compulsory education in rural areas would soon be extended to urban students.

In the first 11 months of 2007, he said 557.8 billion yuan of fiscal expenditure went to education, up 32.7 percent from the same period the year before.