1296.2.4.2 Implementation and Promotion of the Reform
The reform of the fund guarantee system in rural compulsory education came
into effect in the spring semester of 2006 and has been implemented year by year
in different areas. Beginning in 2006, the “Two Exemptions and One Subsidy”
(TEOS) policy was integrated into the “New Mechanism”. The exemption policy
was first implemented in western part of China in 2006 and was expanded to the
central and eastern regions in 2007. This is now combined with the comprehensive
guarantee (quanmian baozhang), which brings the basic requirements of rural sec-
ondary and elementary schools entirely within the orbit of financial guarantees. It
is more comprehensive than the previously proposed “three Guarantees” (guaran-
teed security, guaranteed wages, guaranteed operations) (Ding 2008 ). TEOS is an
important measure in China’s endeavor to construct a rural compulsory education
assured funding system (Ding 2008 ).
The New Mechanism has been broadly well received. Issues that arose in
implementation included problems with the implementation of the subsidy for
poor families and the coverage rate of free textbooks was smaller than anticipated
and often the textbooks failed to be reused. The level of public funding remained
low in some areas and the mechanism for renovation school buildings in extremely
cold or remote areas was difficult to utilize. As a result in 2008 the standards for
the average amount of funds per student were revised and the coverage rate of free
textbooks was expanded with additional central finance. Benchmark quotas for
public funds per student were published and by 2010 were in place across China.
The “New Mechanism” reform has included compulsory education in public
financial guarantee system, established the mechanism of shared responsibility
between the central and local government according to fixed ratios of contribu-
tion, and carried out the system of “provincial government is responsible for
overall implementation, administered by county-level government”. The “New
Mechanism” recognizes the need for different timescales for implementation in
different regions, and begins to solve the problem of financial guarantees and the
financing of teachers, renovation of school buildings, and textbooks and living
expenditure subsidies for poor students.
As the implementation of the “New Mechanism” continues, several achieve-
ments are evident. First the situation of under funding for rural education has
improved a lot. During the period of eleventh five-year plan, the added edu-
cational funds allocated mounted to 218 billion yuan of which the central state
contributed 125 billion yuan and local government 92.8 billion yuan (Liu 2010 ).
Second, the gaps in funding between eastern region and western region are becom-
ing smaller, though western region still lags. Third, the conditions of many schools
have improved and the environment for the development of rural education has
been enhanced. Fourth, the salaries and benefits or teachers in rural areas have
increased.
The “New Mechanism” is a milestone in rural compulsory education funding
system reforms.
6.2 Reform of Management and Fund Guarantee System