15The financial guarantee system for rural compulsory education approved by
the State Council in 2005 confirmed a county-centered rural compulsory educa-
tion management and finance system. More recently (2005) the State Council
announced and associated with a number of key principles that included:
- Eliminating student tuition and fees for the compulsory stage of rural education.
- Providing free textbooks to rural students at compulsory education.
- Subsidizing students in poor families with boarding allowance.
- Establishing a long-term mechanism for school building maintenance and
restructuring. - Consolidating and improving the mechanism of guaranteeing teachers’ salaries
in rural primary and middle schools.
This system increased the ratio of central to local government financing and
favoured poor areas in the central and western regions of China. A cost-sharing
formula has been introduced whereby expenses for tuition subsidies are 8:2 central
and local government in the western region and 6:4 in the central region; expenses
needed for free textbooks are wholly assumed by the central government; and
those for school building maintenance and restructuring are shared 1:1 by the cen-
tral and local levels. Transfer payments are now made to counties to guarantee
teachers’ salaries are paid on time directly into teachers’ bank accounts. Formula
funding is used to allocate public funds to rural primary schools to ensure that lost
income from tuition fees etc. is replaced, schools have adequate operating budgets,
and funding becomes more equitable between schools in urban and rural areas.
Notwithstanding this policy central primary schools continue to exist in most areas
and receive the resources first. They may then distribute the resources in different
ways to the schools they administer.
The rapid development of China’s economy has greatly strengthened its finan-
cial capacity. This has allowed the central government to support commitments to
educational development and compulsory education through increased education
spending. Budget allocations have included some attempts to increase equity by
adopting more favourable subsidies for the poorest places, and especially to rural
areas. This is a departure from historic practice and is a response to growing ine-
qualities and the need to build a “new socialist countryside” and promote a more
“harmonious society”. It is yet to be established to what extent these transfers are
really sufficient in volume, and whether they are being allocated in ways that are
efficient in increasing equity.
To explore some of the achievements and remaining challenges we now turn to
the case studies that we have undertaken.
1.1.4 The Case Studies and Research Methods
In 1990 a team from Beijing Normal University designed and developed a
research programme to explore progress in universalising enrolment in basic
1.1 Introduction