Public spending is one of the Chinese government's key tools to shape national development. Currently, public expenditure policies are undergoing a major transformation to meet the changing requirements of the market economy. However, major challenges remain: to develop more effective institutions and practices for planning, implementing and controlling spending; to improve the allocation of spending so that it better meets China's needs; and to reform the relations among levels of government. This study draws extensively on Chinese government and other sources to provide a detailed and up-to-date picture of the current state of China's public expenditure policies, the main reforms that are being undertaken, and the problems that remain to be resolved. The first and second chapters discuss the main elements of China's public expenditures, the factors underlying their rapid growth over the past 10 years, and efforts to improve the effectiveness with which public expenditures are...

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