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Gear public spending toward social welfare

By Ma Hongman (China Daily)
Updated: 2007-08-23 11:02

In the latest round of price hikes in pork, poultry products and other food, many feel their living standards will be compromised due to their limited incomes. The central government and local governments at various levels have made a quick response to this sentiment by offering financial aid to the needy.

The groups receiving aid include low-income earners in rural and urban areas, people depending on minimum living allowances, farmers raising pigs, college students whose families are not well-off and other groups influenced by inflation.

Such extensive coverage of government assistance is unprecedented in recent years. And it would not be possible without the increase in wealth of the administrations.

Against the backdrop of a decades-long economic boom, the annul income of the central government and local governments have grown at an impressive rate. It is, therefore, an issue of public concern how the administrations spend their money, and how the common people benefit.

The financial aid to cushion inflation is one of the examples how the authorities are trying to spend their money in a manner that is beneficial to the public.

However, the finances of many Chinese administrations are targeted at economic development, rather than the public good.

Many countries in the world resorted to government spending to fight against the economic recession after World War II. But they were prudent, bearing in mind that one important goal of public spending is to narrow the gap between the rich and poor.

Several European countries carried out this policy successfully by establishing extensive social welfare systems funded by the government. Thus, they not only saw an economic recovery, but also a boost in the lifestyle of the people.

Such experiences are of great value to China which is seeking a sustainable economic growth.

Chinese decision-makers have earmarked a large portion of the country's wealth to develop the economy. It has accomplished a lot in many aspects, but the negative effects are also difficult to ignore.

While the government is putting its money directly into the economy, it is not equally taking care of the people's welfare. It is possible some officials are using government money for their own good or are spending it inefficiently.

More importantly, the inadequate social welfare system makes the public vulnerable to future uncertainties.

As a result, they tend to spend cautiously, saving their money for fear of future risks.


(For more biz stories, please visit Industry Updates)

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