Active Steps Should Be Taken to Really Augment Effective Input into Education by Observing the legal Provisions concerning the "Three Increases" of Educational Financing.

 42. In implementing the strategy of invigorating China through science and education, the idea of regarding educational investment as consumption expenditure must be changed. On the contrary, educational development should be considered in practice as a kind of infrastructure construction and investment in education should be considered as a fundamental capital investment, and accordingly educational input must be increased by every possible means. The financial authorities of governments at all levels should attentively enforce the legal provisions and policies promulgated to raise educational funds, especially ensure the "Three Increases" stipulated by the Education Law (By "There Increases" is meant that the financial appropriations for education provided by governments at all levels should grow at a higher rate than total public revenue; per student recurrent expenses should steadily increase year by year; and expenditure on teachers' salaries and per student non-personnel expenses should steadily increase). As prescribed by the education Law and the Guidelines for the Reform and Development of Education in China, we should progressively raise the public expenditure on education in terms of its proportion of GNP to 4%.

We will progressively raise the proportion of educational appropriations in the budgets of provincial governments. From 1998 on, the proportion in central government budget will be raised by 1% annually (with the same specifications kept for various items of expenditure). Thus by the year 2000, the proportion will have been raised by about three percentage points. The above budgetary increment will be mainly used to cover the expenses on those parts of the Action Scheme to be supported by the central government finance with the provision that the earmarked funds for specific projects allocated by central budget will be retained in accordance with existing policies. The proportion of educational appropriations in the budgets of provinces, autonomous regions, and municipalities directly under the central government should also be raised by l£¥ to 2£¥ annually in the light of local conditions.
We will attentively follow the spirit of a Ministry of Finance Circular distributed by the State Council £¨1998-N0. 23£© and try to ensure from 1998 onward that the proportion of surplus revenue and extrabudgetary income used for educational purposes shall be no less than the percentage of educational expenditure in the budget determined at the beginning of each year.
We should strengthen the levying and management of surcharges for education collected in urban and rural areas to ensure full levying and well-coordinated usage by the competent educational departments in consultation with the financial departments. We should actively support work-study programs and school-run enterprises, which should continue enjoying preferential treatment in taxation.

A China Education Development Fund will be set up on the basis of the National Fund for Rewarding Kindergarten, Primary and Secondary School Teachers to facilitate fund-raising for education through multiple channels.

43. We should speed up the renovation of multi-storied dormitory buildings for college teachers and the reconstruction of dilapidated buildings in HEIs so as to basically solve the housing difficulties of young teachers in HEIs by the year 2000£® The central government finance will allocate special funds to support such renovation and reconstruction in the HEIs under various central ministries and agencies£®The rest of fund needed should be jointly borne by the institutions concerned and the governmental departments in charge. The renovated multi-storied dormitories will be used as apartments and temporary housing to meet special needs.

44. Bank loans will be used to speed up the construction of houses for the staff and workers employed in HEIs directly under various central ministries and agencies. To tackle the housing difficulties faced by university and college teachers so as to stabilize the contingent of teachers, it is envisaged that part of the infrastructure loans provided by China Construction Bank to be dispensed before the year 2000 will be used for housing projects built in HEIs directly under various central ministries and agencies, and for the construction of "economical and suitable for use" houses on institutional ground, with the financial gap covered by funds raised through multiple channels£®We will continue to strengthen the "Project of Living in Contentment" for school teachers.

45. Educational authorities at all levels must take every possible means to carry out in-depth educational reforms by improving financial allocation system, simplifying organizations, reducing redundancy and enhancing the effectiveness of money spent£® In the meantime, audition and supervision over educational expenditures should be strengthened.