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       The main capital supporting our national education development comes from the investment by the country. After the closing of the fifteenth session of our party, the Party Central and State Council have made an important decision that since the year of 1998, the percentage of education capital in the central financial expense will increase by one percent annually for five consecutive years. Only by this issue, the education capital in the central financial expense had increased 31.4 billion from 1998 to 2001; by the end of 2002, the increased education capital accumulated to be 48.9 billion. With the fulfillment of the capital, the proportion of the financial expense on education increased year by year.

 

       Budgetary appropriations by governments at different levels are the major source of educational funds. Since China began implementing reform and open policies in the late 1970s, governments at all levels have had a growing awareness of the importance of education. In many localities, educational fund receives priority in local financial outlays.
       According to Outline for the Reform and Development of Education in China, by the year 2000 government budgetary appropriations shall constitute 4 percent of the country's gross domestic product (GDP). How to reach this 4 percent proportion has become the basis for drawing up specific plans for education investment.
       To ensure government input in education, Education Law of the People's Republic of China provides that education-oriented appropriations shall increase within the central government's budget and within the budgets of local governments, that the increase of education-oriented appropriations shall be greater than that of regular fiscal incomes, and that such increase shall be calculated according to the average educational expense of the total enrollment of schools. These provisions are intended to make sure that budgetary outlays are enough to pay teachers increased salaries and cover increased average expenses of students.
 
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