Allowing more people to enjoy the sunshine of public finance is crucial to narrowing both the income disparity between China's urban and rural areas and the development gap between its coastal and inland regions.
With a national coffer that has doubled in size over the past five years, the Chinese Government is certainly better prepared than ever to tackle those growing gaps.
However, to make the best use of the country's increased fiscal strength, policy-makers should not only keep tilting the fiscal policy in favour of social causes like public education, health care and social safety nets: they should also let in as much sunlight as possible in public finance.
In recent years, the central government's enlarged transfer payment for local governments in less developed regions has testified a steady shift in the focus of the country's fiscal policy.
Between 1994 and 2005, the central government has made transfer payments totalling 2.6 trillion yuan (US$329 billion) to local governments, of which as much as 44 per cent and 46 per cent went to the country's central and western areas respectively.
Though such an increase in transfer payments is still far from enough to reduce the regional gap in terms of personal incomes, it does contribute to accelerating the central and western regions' pace in catching up with their coastal cousins.
Meanwhile, by pumping more financial funds into public services, especially those basic ones most wanted by underprivileged groups, the Chinese authorities have made remarkable progress in advancing equity through fiscal incentives.
Statistics indicate that in the first eight months of this year, the country's spending on education and health care increased by 46.3 billion yuan (US$5.8 billion), up 13.8 per cent over the same period last year. Government expenditure on unemployment and social security also soared from 59.6 billion yuan (US$7.5 billion) in 1998 to 369.9 billion yuan (US$46.7 billion) in 2005.
