Nation, page 12, issue 504, January 31
Translated by Tang Xiangyang
Original article: [Chinese]

The Beijing government has piloted a project to conduct a preliminary evaluation of government spending projects. Beijing earned over 230 billion yuan in fiscal revenue in 2010 and plans to spend 113.5 billion yuan this year.

The first batch of projects covered by this pilot policy contains seven projects in Beijing's city-level spending budget for 2011. The Beijing government has hired the Beijing Jinkai Weiye Consultant Company, a third-party consulting service provider, to evaluate all the projects.

Beijing is not the first Chinese city to conduct a preliminary evaluation on government spending projects, but its pilot project may serve as a model for other Chinese cities.

Evaluation

Prior to Beijing's reform, Wuxi City in Jiangsu Province, Haerbin City in Jilin Province, Wenling City in Zhejiang Province, and Minhang District in Shanghai City had all piloted projects that involved soliciting public opinion on government budgets.

Beijing's reform is focused on conducting a preliminary evaluation of government spending projects. Prior to the reform, projects were only evaluated once they were completed, and the system was long criticized for producing poor budget plans, insufficiently-detailed projects and the misuse of government capital.

Beijing's preliminary evaluation pilot already underway is different. It evaluates projects before they are conducted and allows the government to improve or even cancel projects if they are not well-designed or are deemed unnecessary.

The first batch of projects covered by this pilot policy contains a promotional project of the Beijing Tourism Bureau and a traffic technology network planned by the Beijing Traffic Bureau. All seven projects being evaluated concern people's livelihoods.

"The Beijing Municipal Bureau of Finance is not sure whether it should approve them or not. It hopes the preliminary evaluation will help with its decision process," Wang Ruichao, deputy director of the Budget Department of the Beijing Municipal Bureau of Finance said.

An important part of the pilot project is the inclusion of several local NPC and CPPCC members along with other representatives of public opinion. Based on the seven projects selected, the financial and economic commission of the standing committee of Beijing's people's congress has recommended six representatives and the economic commission of Beijing's people's political consultative conference also recommended six experts.

Aside from those 12 representatives, the Beijing Municipal Bureau of Finance has imported a third-party consultancy agency, Beijing Jinkai Weiye Consultancy Company, to hire 35 experts, who have formed an evaluation team along with the 12 representatives to conduct the preliminary evaluation. The evaluation team consists of both financial experts and experts in special fields in accordance with specific projects.

Projects are evaluated according to their necessity, feasibility, targets and risks. The evaluation team gathers information, conducts a field investigation, holds talks and surveys those responsible for the projects using a questionnaire before evaluating them.

Inquiry

Pi Dandan, an appraiser with the Beijing Jinkai Weiye, never anticipated it would be difficult to gather information to evaluate the government projects planned.

For example, the Beijing Municipal Education Commission has reported a preschool education project which calls for 500 million yuan in investments. The evaluation team has found it difficult to obtain details about this project; the education commission has only provided the team with a copy of the 12th Five-Year Plan which does not offer a specific budget for 2011.

Pi Dandan said, at the very beginning, people serving the education commission were reluctant to provide details about their project. They thought it was unnecessary since the details could be outlined during the project's implementation process. However, after several rounds of communication, they finally realized the importance of providing details.

Experts serving the evaluation team have played an important role. For example, Feng Xiaoxia, a professor with Beijing Normal University and chairman of the China Preschool Education Research Association, has improved the education-related project with abundant domestic and international materials, and by using the results of her own research.

The education commission plans to subsidize each kindergarten with one million yuan. But where did this calculation come from? The commission did not provide an explanation. The evaluation team provided suggestions and the original project was improved.

Government agencies also sent officials to attend an inquiry meeting held by the evaluation team where experts raised very detailed questions.

For example, when discussing a promotion project planned by Beijing's tourism bureau, experts raised questions about a training fee such as who would benefit from the fee and what the training involved. After the bureau answered that tour guides from tour agencies would be trained to promote Beijing's image, the evaluation team drew the conclusion that this type of expense was already contained in the tourism bureau's management fee and thus the training fee should not be approved.

Experts also asked what specific types of cameras were needed in a project planned by the Beijing Municipal Traffic Bureau, but the latter could not provide a satisfying response.

Aside from their lack of detailed information, project applications were also criticized for concealing risks.

The Beijing Gonglian Highway Connect Line Co., Ltd has submitted a project to offer operational subsidies for traffic hubs. However two hubs in Sihui and Songjiazhuang, have yet to complete construction. That means, even if the operational subsidy is approved, it faces great uncertainty.

Veto

Among members of the evaluation team, while representatives of the NPC and the CPPCC are concerned with the necessity of the projects, experts prefer to give professional suggestions.

While evaluating a geological project, they suggested having two district-level finance bureaus in charge of financing the project, instead of the Beijing Municipal Bureau of Finance due to the fact that only two Beijing districts were included in the project.

The only project that has been rejected by the evaluation team was the promotion of a service hotline that had previously been set up by the Beijing Civil Affairs Bureau. The estimated budget was 16 million yuan.

Through their investigation, the evaluation team discovered that this hotline has no clear function and was too risky to promote.

Though the evaluation team plays a role in approving the projects, the Beijing Municipal Finance Bureau makes the decisions. That is why, although none of the projects were deemed highly satisfactory, only one of them has been rejected. All the other six projects have received suggestions for improvement.

Results

Combined, 1.225 billion yuan was budgeted for the seven projects evaluated; the hotline promotion project which was rejected had a budget of 250 million yuan.

The evaluation team had been afraid that their suggestions would be vetoed by the Beijing Municipal Finance Bureau. However, the budget plans of the seven projects have accepted their suggestions. The Beijing Municipal Finance Bureau agreed with their suggested project veto, and accepted nearly all of the evaluation team's suggestions about which projects to support.

At this year's "two sessions", Yang Xiaochao, director of the Beijing Municipal Finance Bureau, said to the media that this year it would further promote the publication of government budgets and the number of government agencies that will have their budget plans open to the public will be increased from 45 to 58. He also said, the content of budget plans open to the public would provide more details than it had done in the past.

This article was edited by Rose Scobie and Ruoji Tang