From 1997 to 2002, China's investment in education maintained a constant and rapid growth with an average annual growth rate of 16.7 percent. In 2002, the investment in education totaled 548 billion yuan, up 116.4 percent over 1997. The proportion of financial education funds to China's gross domestic product (GDP) reached 3.41 percent in 2002.

Sources say, with the proportion of education funds in central government's financial expenditure rising 1 percentage point every year from 1998, the allocation on education in the financial budgets of the governments at various levels totaled 311.4 billion yuan in 2002. From 1998 to 2000, the central government had allocated 14.82 billion yuan state treasury bonds to strengthen the educational infrastructure construction and the expansion of higher education enrollment in China's western regions. Investment totaling 12 billion yuan has been allocated for the "Renovation Project of Rural Middle and Primary School Buildings" jointly carried out by the Ministry of Education, the former State Planning Commission, the Ministry of Finance and local governments at various levels.

In addition, during the 10th Five-Year Plan period (2001-05), the central and local governments have allocated almost 20 billion yuan, starting the "Project of Compulsory Education in Poverty-stricken Areas." Since the year 2001, the central financial department has allocated 100 million yuan every year to establish the special fund for "National Assistantship for Compulsory Education of Poor Students". This special fund aims to cut or cancel the incidental expenses of middle and primary school students in the old revolutionary base areas and western poverty-stricken regions and to provide them with living subsidies.

(People's Daily October 24, 2003)