2008 Winner
Xian District, Xian Ning City, Hubei Province
Innovations and Excellence in Local Chinese Government
Innovations and Excellence in Local Chinese Government

Rural Tax Reform: Premier Wen Jiabao, said that the key to implementing rural tax reform lay in advancing comprehensive rural reforms in the government of townships, compulsory education, and the financial systems of town and county governments. The statement stressed the necessity to test the comprehensive reforms in more rural areas and encourage township governments to focus on rural social management and public services by reducing staff numbers and expenditure. (Xinhua News Agency) au.chnina-embassy.org

How do we ensure that governments at the Township level have funds to fulfill their duties after the rural tax-fee reform? How do we enable Township governments to fulfill their functions? To answer these questions, the Xian'an District initiated "The Reform of the Administrative System at the Township Level" in 2003. It is a comprehensive reform that consists of three basic components that have been refined and improved during the last four years.

1. It streamlines government structures and adopts the policy of "cross appointment."

  • Government Structure: The Township government was downsized from 774 to 433 and leadership positions reduced from 234 to 132. The government structure at the Township level was streamlined to become "Three Offices and One Department." The streamlined structure includes the Comprehensive Office of Governmental and Party Affairs, the Office of Economic Development, the Office of Social Issues, and the Finance Department. Based on the population of the towns involved, personnel quotas in town governments were set at three levels, 39, 37, and 32 respectively. Social insurance was established for downsized officials and assistance was given to retrenched officials so they could find other ways to make a living. The District government resolved the thorny problems of overstaffing in an active and orderly manner.
  • "Cross-Appointment" and Improved Leadership: The Party Secretary holds the concurrent position of Township Mayor, the Party Deputy Secretary is also Chairman of The People's Congress, and The Party Commissioner also holds the position of Deputy Mayor. The number of Township Party Committee Members was thus limited to 7 to 9. Finally, leadership at the Township level is nominated publicly and elected directly. Ordinary officials are publicly selected through competition.

2. It delivers public goods in rural areas by "purchasing services." Existing offices were replaced by service centers that use the concept of "project management" to deliver public goods. Project management makes clear what farmers need; estimates costs based on the local economy; allocates funding; conducts competitive bidding; signs contracts; evaluates the projects; and purchases the services. Using this methodology the government improved the quality of services, delivers services in a more proactive way, and broadens the scope of service delivery. Previously farmers had access to five services now they have13. These include agricultural skills, veterinarian assistance, family control, irrigation, forestry, and radio. Local farmers benefited as the budget for Public Services in the Rural Area has steadily increased: 2530000 Yuan in 2005, 3040000 Yuan in 2006 and 4680000 Yuan in 2007. (1 USD is equal to roughly 6.8 Yuan)

3. It uses a supervision system that ensures the quality of public services and lowers the cost of government supervision. The system clarified government functions and developed more efficient working teams. It also institutionalized standard contract formats, and developed examining methods and examination criteria for public servants.

The reform in Xian'an District has received much attention from the Provincial Government of Hubei and the mechanism of "Purchasing Public Services" has been implemented across the Hubei Province. However, the reform has encountered several obstacles. The first is pressure from functional departments at superior levels which question the need for reform at the Township level and the second is the need to improve participation by farmers.