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Can a New Education Law Save China

10-18 00:00 Caijing Magazine

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By staff reporter Chang Hongxiao

He Haiping often feels financially restrained - not for himself, but for his school.

The principal of a well-known middle school in Jianli County of Hubei Province is distressed by the shortage of funding for his school. His school enrolls 700 new students every year, less than 40 percent of those seeking to enroll. Lacking enough space, he crams more than 100 students into every classroom. To top it off, the school cannot always afford to pay teachers fully or on-time. Some teachers have left the school to find jobs in more affluent regions, where the pay is better.

He Haiping shares his fate with many other principals in western China’s poor rural areas. The challenges they face make it apparent that the current push to revise the Compulsory Education Law is long overdue.

China passed its compulsory education law in 1986, but the simple 18-article, 1,800-word law has not done enough for the country’s compulsory education system, which covers students from grade one to nine. A 1992 reform of the law also did not improve the situation.

The chief fault of the law is its failure to define whether national, provincial or local governments should pay for education spending. The 1986 law vaguely stipulates that the government should be responsible for the operating expenses and construction investment needed by the education system, without defining who should pay. It has been a recipe for disaster. In reality, most of the burden falls upon poor farmers, who pay for the education system through agricultural taxes and educational fees. According to a 2002 survey by the State Council’s Development Research Center, below-county level governments pay for 78 percent of compulsory education costs, county-level governments pay 9 percent, provincial-level governments pay 11 percent, and the central government contributes less than 2 percent.

According to analysts, inadequate funding causes high dropout rates in poorer regions. The Ministry of Education estimates that about 7.17 million young people have not attended all nine years of compulsory education. Ding Yanqing with Peking University’s School of Education said the real number is more than 10 million.

On June 7 the Ministry of Education submitted the new revisions to the State Council and the National People’s Congress Standing Committee held panel meetings to review the draft on September 16 and October 10. Analysts say that if everything goes smoothly, the 71-article, 7,000-word law will be passed during the National People’s Congress’ national sessions next March.

The ongoing rural fee-to-tax reform, aimed at getting rid of high fees on farmers, has pushed the education law revisions to the top of the agenda. The reform may reduce the local burden for education costs, leading to a gap in education funding. "The funding process must be changed," said Wang Dinghua, director of the General Office of the Ministry of Education’s Basic Education Department.

Thirteen articles of the revised law deal with "the guaranteeing of funds for education." They emphasize cost-sharing between the central, provincial, above-county-level and county-level governments. The revised law also requires education funds to be singled out in transfer payments between different levels of government. Currently the funds earmarked for compulsory education spending is not set apart from the rest of the transfer. Also, Article 38 of the draft entitles the county-level government to independently draft their educational budgets in accordance with the funding from the provincial and central government. Budget independence should allow local governments to make their own educational priorities and prevent the provincial and central government from tying education funding to the promotion of pet projects.
Analysts are not sure whether the revised law will be enough to save China’s compulsory education system.

Ding Yanqing said: "It is a progress for the new draft to require the central and provincial governments to shoulder more responsibility. But it is still not very clear regarding the issue of sources of funding, meaning the law does not solve the fundamental problem."

An official from the Ministry of Education said changes in educational funding is closely related to the existing fiscal and budgetary systems. Some analysts say the Ministry of Finance considers it necessary to change the current Budgetary Law and draft a new transfer law to pass the revised education law. If the Ministry of Finance successfully raises these objections, it could delay passage of the revised education law. The Ministry of Finance may object to the new transfers on efficiency grounds. But as China does not have a measure for the quality of compulsory education, it is difficult to gauge the efficiency of educational spending.

Experts also suggest that making education fund allocation transparent should be a top priority. Ye Ping, with the Hubei Education Science Research Institute, said: "how much of the transfer payment is earmarked for compulsory education by the county governments is always a secret." Wei Xiangchi, a researcher at the China National Institute for Educational Research, said: "Only three people know - the Party secretary of the county, the administrative head of the county, and the director of county bureau of finance. To effectively solve the problem of inadequate educational funding, the allocation mechanism must be more transparent."

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