China, People's Republic of: People's Republic of China: Supporting Fiscal Reforms in High Priority Sectors

Sovereign Project | 42003-012

Summary

The President approved the captioned TA for $1,000,000 to support fiscal policy reforms in high priority areas in the People's Republic of China (PRC) on 10 July 2008. Total project cost is $1,300,000, with government financing of $300,000 in kind. The International Department of the PRC Ministry of Finance (MOF) is the executing agency. The TA became effective on 29 July 2008 and is scheduled to close on 31 March 2012.

The objective of the TA is to enhance fiscal effectiveness through improved public sector resource management with three outputs: (A) fiscal policy support for health sector reforms, (B) management of sub-national government liabilities, and (C) development strategy and institutional planning for local treasury cash management. The Department of Social Security of the MOF is the implementing agency (IA) for Output A, the Budget Department of the MOF for Output B, and the Treasury Department of the MOF for Output C.

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Project Name People's Republic of China: Supporting Fiscal Reforms in High Priority Sectors
Project Number 42003-012
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7095-PRC: People's Republic of China: Supporting Fiscal Reforms in High Priority Sectors
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Public sector management - Public expenditure and fiscal management

Gender Equity and Mainstreaming No gender elements
Description

The President approved the captioned TA for $1,000,000 to support fiscal policy reforms in high priority areas in the People's Republic of China (PRC) on 10 July 2008. Total project cost is $1,300,000, with government financing of $300,000 in kind. The International Department of the PRC Ministry of Finance (MOF) is the executing agency. The TA became effective on 29 July 2008 and is scheduled to close on 31 March 2012.

The objective of the TA is to enhance fiscal effectiveness through improved public sector resource management with three outputs: (A) fiscal policy support for health sector reforms, (B) management of sub-national government liabilities, and (C) development strategy and institutional planning for local treasury cash management. The Department of Social Security of the MOF is the implementing agency (IA) for Output A, the Budget Department of the MOF for Output B, and the Treasury Department of the MOF for Output C.

Project Rationale and Linkage to Country/Regional Strategy

The TA directly supports ADB's Country Partnership Strategy 2008-2010 (CPS) for PRC through the CPS's key pillar of inclusive growth and balanced development, with focus on strengthening governance in the management of public resources. Under the strategy, ADB will support governance by developing legal and regulatory systems for the market economy and strengthening public administration.

The TA will support the PRC in three high priority areas of public resource management to enhance the capacity of the Ministry of Finance to provide more resources for efficient public service delivery efficiently. The TA will facilitate: (i) cost-effectiveness, equity, and efficacy of grassroots health financing schemes; (ii) better management of subnational government explicit and implicit debt and its associated risk; and (iii) recommended model of local treasury cash management suitable for PRC. Under the first component (Output A) covering facilitating fiscal reforms in the health sector, the TA will assist the set-up of a suitable performance monitoring system for evaluating the cost-effectiveness of pilot systems of funding health care services to facilitate government policy formulation on health care delivery. The second component of the TA on local debt management risk mitigation (Output B) will prepare a blueprint for better management of subnational government implicit and explicit debt. The third component (Output C) will recommend a model and pilots of local government treasury cash management suitable for PRC.

Impact Increased fiscal effectiveness and equity through improved public resource management in key areas.
Project Outcome
Description of Outcome Deepened fiscal reforms in health care financing, local government debt management, and control of government administrative costs.
Progress Toward Outcome Policy research work on health care financing was completed in September 2012, with the macro analysis of current fiscal investment on the health sector prepared in February 2012. Analysis and policy recommendations on local management of government debt are complete, with blueprint for local government debt management, and conference was held in June 2012. Policy research work on local treasury cash management is complete and policy note on local treasury cash management was published in 2012.
Implementation Progress
Description of Project Outputs

Output A: Successful pilot project to test the efficacy of financing grassroots health facilities through alternative sources of funding.

Output B: Blueprint for better management of subnational government implicit and explicit debt.

Output C: Report with recommendations for containing administrative costs based on a study of national and international practices; report to contain (i) trend analysis of administrative costs across the levels of governments and regions; and (ii) in-depth analysis of sources of administrative cost increase, including the potential latent impact of off-budget expenditure.

Status of Implementation Progress (Outputs, Activities, and Issues)

Output A: Work under Output A is complete.

(1.1) Preparatory work commenced following the finalization of health sector policy reforms in April 2009. ADB discussed implementation arrangements for this component with the Government in August 2009 and consultants were fielded in November 2009 and April 2010. In June 2010, agreement on the policy framework of TA implementation was reached: (i) analysis of status of implementation of healthcare system reform; and (ii) select 4 ongoing experiments on subsidy mechanism on grassroots healthcare facilities.

(1.2) The Senior Health Evaluation Specialist was recruited in November 2009. The Health Economics and Financing Specialist and the Senior Health Reform and Evaluation Specialist (team leader) were recruited in April 2010 and May 2010, respectively.

(1.3) Consultants were fielded in June 2010 to work on analysis of status of implementation of health care system reform. The research work plan and budget for strengthening the evaluation component of the 4 ongoing experiements on reforming subsidy mechanisms for grassroot facilities was approved in January 2011. The health monitoring and evaluation specialist started work in February 2011. Consultants implemented the research plan: (i) survey instruments were

developed; and (ii) initial drafts of some reports in Chinese were available, with macro-analysis on the current fiscal investment in the health sector completed.

(1.4) Field survey was conducted in Tieling, Liaoning Province in April 2011. This was followed by the survey work in Suqian, Jiangsu Province in May 2011. Survey work in Zhichang was done in October 2011.

(1.5) A midterm workshop on health sector reform, with 20 participants, was held in July 2011 to discuss preliminary findings of the study and health policy issues in PRC.

(1.6) A study tour of health officials to Canada was conducted on 16-21 October 2011 to learn from the Canadian experience and best practices. The study tour included Vancouver, Ottawa, and Toronto.

(1.7) The final English language report titled "Government Investment Model and Compensation Mechanism for Healthcare Facilities" was received in September 2012 and was endorsed by the Government.

Output B - Work under Output B is complete.

(2.1) Progress in implementing Output B was achieved. The draft inception report was discussed with MOF in August 2009 and recommended changes in the report. The revised inception report was submitted in March 2010 and accepted by ADB as the interim/draft report.

(2.2) The final report on the blueprint for better management of subnational government implicit and explicit debt was submitted in December 2010 and presented/discussed in January 2011. Agreement was reached on the preparation of a publication on the policy recommendations and the conduct of an international workshop on local government indebtedness by early 2012. Due to sensitivity of issues on local government debt, the publication was not pursued and only the international workshop pushed through in June 2012.

Output C - Work on Output C is complete.

(3.1) Output C has progressed well and is complete. The report on international treasury cash management was submitted in April 2010. The report (English version) on domestic treasury cash management was submitted in October 2010 (Chinese version was done in June 2010). An updated and combined treasury cash management report was completed in September 2011. A policy note on local treasury cash management was prepared and published as ADB's Observations and Suggestions.

(3.2) Pilot research visits were conducted in June-September 2010. Draft reports on the pilot research visits were submitted in October 2010 and key findings were presented in January 2011.

(3.3) Two conferences on local treasury cash management (Sanya, Hainan and Guilin, Guangxi) and one expert group meeting had been conducted.

Geographical Location PRC
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design ADB conducted consultations with key government institutions like the Ministry of Finance, National Development and Reform Commission, Ministry of Health and the Institute of Fiscal Studies.
During Project Implementation ADB conducted consultations with the Ministry of Finance, Ministry of Health, National Development and Reform Commission, China Financial Policy Research Center of Renmin University of China, and development partners like the World Bank, World Health Organization, USAID, among others.
Business Opportunities
Consulting Services

Consulting services for the following expertise are estimated:

A. Component on Fiscal Policy Support for the Health Sector Reforms:

1. National Senior Health Reform and Evaluation Specialist/Team Leader (4 person-months);

2. National Health Economics and Financing Specialist (3 person-months);

3. International Senior Health Evaluation Specialist (2.7 person-months); and

4. National Health Systems Reform and Evaluation Specialist (duration of engagement still to be determined).

B. Component on Management of Subnational Government Liabilities:

1. International Public Debt Management Expert (4.6 person-months); and

2. National Debt Management Specialist (firm) (18 person-months).

C. Component on Local Treasury Cash Management:

1. International Treasury Management Specialist (1 person-month);

2. National Budget Specialist (5.8 person-months);

3. International Treasury Management Expert (1 person-month);

4. National Treasury Management Expert (2 person-months).

Responsible ADB Officer Jorn Brommelhorster
Responsible ADB Department East Asia Department
Responsible ADB Division Office of the Director General, EARD
Executing Agencies
Ministry of FinanceXiaolong Moxl.mo@mof.gov.cnInternational Department, Ministry of Finance
Timetable
Concept Clearance 18 Mar 2008
Fact Finding 14 Apr 2008 to 21 Apr 2008
MRM -
Approval 10 Jul 2008
Last Review Mission -
PDS Creation Date 22 Apr 2008
Last PDS Update 27 Mar 2013

TA 7095-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Jul 2008 29 Jul 2008 29 Jul 2008 31 Jul 2011 28 Feb 2013 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 300,000.00 0.00 0.00 0.00 1,300,000.00 10 Jul 2008 914,144.46
Title Document Type Document Date
Supporting Fiscal Reforms in High Priority Sectors TA Completion Reports Aug 2013
Supporting Fiscal Reforms in High Priority Sectors Technical Assistance Reports Jul 2008

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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