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China should set up a national educational bank to properly manage the country's educational investment, said a lawmaker on the sidelines of the annual full session of the National People's Congress (NPC).

 

A national educational bank with provincial branches can make more effective use of the educational allocation from the central government and social investment in educational research, said Jiang Fengchi, an NPC deputy from eastern Jiangxi Province.

 

"The national educational bank can waiver interest tax, reduce or cut the commission charge and lower down the lending rate to attract social investment in education," said Jiang, former vice president of Jiangxi Normal University.

 

Jiang said that profit-driven commercial banks, which run the country's educational investment, have failed to manage the money properly.

 

"Some commercial banks are reluctant to grant interest-free student loans, resulting in a difficult access for poor rural students to universities," said Jiang, adding the establishment of the educational bank can alleviate the pressure of central government for more educational budget.

 

Educational investment in rural areas will total 223.5 billion yuan (US$28.7 billion) this year, a rise of 39.5 billion yuan year on year, according to Premier Wen Jiabao's government work report delivered last Monday to lawmakers.

 

According to the report, 10 billion yuan will be allocated from the central budget to rebuild rural middle schools, while local governments will allocate support funds for the program.

 

A system of national scholarships and tuition assistance will go into operation this semester, which starts in early March, for regular undergraduate institutions, vocational colleges and secondary vocational schools. The country will grant free education for students majoring in education in teachers colleges this year, said the premier.

 

(Xinhua News Agency March 16, 2007)