China has set up an education system with government as the major investor and social partners as co-investors. In current stage, local government is playing a key role in compulsory education, while central and provincial government are dominant in higher education. In occupational and adult education, social partners including industrial organizations, businesses and public institutions are playing a more and more important role.

Ministry of Education of PRC is the supreme education administration body in China, which is responsible for carrying out related laws, regulations, guidelines and policies of the central government; planning development of education sector; integrating and coordinating educational initiatives and programs nationwide; maneuvering and guiding education reform countrywide.

Since 1978, Chinese government has promulgated such codes as Degree Statute of the People's Republic of China, Law of Compulsory Education of the People's Republic of China, Law of Teachers of the People's Republic of China, Law of Protection over Juveniles of the People's Republic of China, Education Law of the People's Republic of China, Statute for Teacher's Eligibility and Law of Higher education of the People's Republic of China, and released more than ten sets of education administration regulations. The Ministry of Education, within its jurisdiction, has issued more than 200 sets of administrative rules and regulations, significantly facilitating development of education of different natures.

With regard to education budget, financial allocation is still the major source, while multiple fund channels have been opened up. At present, fund needed by schools directly controlled by the central government comes from the central financial pool; schools controlled by local governments are supported by local finance; schools sponsored by township and villageship governments and by public institutions are mainly financed by the sponsor institutions and subsidized by local governments; funds needed by schools operated by social partners and celebrities are raised by the sponsors themselves (including collecting tuition from students and soliciting contributions). In addition to these sources, the central government is advocating work-study programs, aiming at improving the education conditions through premium services.

China's educational fund has been increased on yearly basis since 1978. Total educational input in 1998 reached RMB294.906 billion, amongst, 203.245 billion from the revenue pool, of which, 156.559 billion from budget allocation in a strict sense.