More money should be invested in public services, says a signed article in China Economic Daily. An excerpt follows:

Professor Wu Zhongmin from the Party School of Communist Party of China Central Committee recently pointed out that, as a proportion of its gross domestic product (GDP), China's investment in its basic public services is among the lowest in the world.

More efforts should be made in the reforms in related areas including social security, compulsory education, public health and housing.

Zhou Tianyong, another professor from the Party School, compared public spending in China and the United States. In 2004, China's administrative expenditure accounted for 37.6 percent of total fiscal expenses while the percentage for the United States was 12.5. China's proportion of investment in economic construction was 11.6 percent while it was 5 percent for the United States. The proportion of expenses in public services was 25 percent for China, while it was 75 percent in the United States.

The Chinese government's administrative costs are rather high. This is connected with overstaffing in government departments and their high spending. High spending on administrative affairs and economic construction undoubtedly impacts on investment in public services.

Investment in public services should be the top priority of public spending. But this is not always the case.

Some government officials' concept of administrative performance is the major culprit. Many of them attach far too much importance to GDP growth. Investment in public services does not directly lead to GDP growth, so they care little for it.

It is an institutional unfairness that government input in public goods and services is low. The situation should be changed to let the majority of the people enjoy the fruits of economic development.

(China Daily July 11, 2006)