119Major measures included strengthening the administration and the financial man-
agement for primary school and middle schools was moved to county level from
the commune and production brigade. High schools were placed under Provincial
supervision. Between 1966 and 1976 the chaos of the Great Proletarian Cultural
Revolution affected every aspect of life including the educational financing sys-
tem (Wu 2008 ). During this period policy on rural basic education was neglected
and there was little systematic administration of the school system to promote its
development.
After the fall of the “Gang of Four” it became possible to resurrect the school
system. The late 1970s in China were a period of comprehensively promoted
reforms of the economic system in rural area which resulted in the implementa-
tion of the household contract responsibility system. This promoted increased pro-
ductivity in rural areas, but it also impaired the collective rural economy and its
revenue raising capabilities. This had adverse consequences for the financial con-
ditions of county and village schools and the development of rural basic education.
In spite of various up and downs, great progress was made in universal edu-
cation. Primary school enrolment increased from below 20 % of the age group
before the founding of New China to 49 % in 1952 and 93 % by 1979. Educational
investment also increased greatly. In 1952, educational expenditure from the state
was 1.1 billion yuan (at current prices) and it increased to 7.5 billion yuan in 1978,
a nominal increase of more than 10 times compared to 1950[11].
In summary from 1949 to the late 1970s school funding flowed from central
government to local authorities. The source of funding was single. Government
expenditure on education was determined by the five year plans and remained a
low proportion of total government expenditure for most of the period. Non-
government investment was limited by the lack of economic growth and the limi-
tations of domestic resources but was essential to support “minban” locally funded
teachers in rural schools (Wu 2008 ). Within the limitations of the times of the sys-
tem and national financial resources the system evolved but was unable to meet
all the demands made upon it. Public services in rural areas, which made up more
than 80 % of the total expenditure, could not be financed solely from local income.
Before the rural tax reforms, educational taxes continually aggravated farmer’s
economic burden and caused serious unrest in different parts of China (Huang
2008 ). Rural education development thus remained at a low level because of a fail-
ure to resolve funding issues in poorer counties (Zhang 2004 ).
The problems were exacerbated by China’s “the Great Proletarian Cultural
Revolution”, and the education system was suffered considerably. Schools sus-
pended classes to make revolution and modern basic education was displaced by
ideology and devaluing the intellectual and Chinese culture. Economic decline
made it impossible to finance the education system in a normal way. Before the
reform and opening up after 1980, economic development was at very low level.
The condition of compulsory education was very weak and it faced a series of
problems with a serious shortage of funding and teachers, poor condition school
buildings and facilities and very uneven quality.