In 1960 he received a degree in Chinese literature from Shandong University.
After university, he worked for two years as an assistant researcher at the Institute of Computing Technology, Chinese Academy of Sciences. In 1962, he transferred to the Ministry of Finance and thus began a lifelong career in finance that was capped by his appointment as minister at the Ministry of Finance, from 1998 to 2003. In a speech before the Johns Hopkins School of Advanced International Studies in Washington, DC, Xiang Huaicheng explained the basic finance policy that he tried to pursue in China. He stressed that from the standpoint of state finance, China had never paused in its attempts to restructure its economy despite what had been reported by some. Economic reform had never stopped; indeed, he believed that China had come to the point where it could no longer stop economic restructuring (Xiang, 2002).
During his term as minister of finance, Xiang Huaicheng also pushed for fund allocations to stimulate development in Western China. The People’s Daily (English version, 6 March 2001) reported the proactive fiscal policy during his term. He proposed the flotation of 50 billion yuan in special Treasury bonds, which would be used to build largescale infrastructure projects. Among the projects that Xiang Huaicheng supported were a pipeline for natural gas and transmission lines for electricity from the western provinces to the eastern regions, water diversion projects to carry water from the south to the water-starved cities in the north, and finally the building of a railway from Qinghai to Tibet, which was inaugurated in 2006. His participation since 1992 as deputy head of the resettlement group for communities affected by the Three Gorges project underscored Xiang Huaicheng’s deep concern for the poor. In 1993, he was also selected as deputy head for the Aid-the-Poor projects. These were long-term commitments for him, and he remained in these posts even during his terms as minister of finance.
Xiang Huaicheng retired from the Ministry of Finance in 2003, after a solid 40 years in service. Retirement liberated him to do things that were really close to his heart continuing the reform in the country’s social security system. Shortly after his retirement from the ministry, he was appointed to the presidency of the National Council for Social Security Fund. Xiang Huaicheng is also a published author not in Chinese literature, his college degree, but on fiscal reform in China. He set down in books all his ideas and strategies for undertaking reforms in the fiscal system and in China’s efforts to gain experience in macroeconomic management. He is an honorary professor at several institutions, including Tsinghua University, Renmin University of China, Wuhai University, and China National School of Administration.
Xiang Huaicheng as minister of finance was always conscious of the vital role that fiscal policies played in development, and felt he had to put in place development-orientated fiscal policies to support these economic targets. To him, it was inevitable that development would always be a dominant theme in China’s economy, as the ultimate target was to improve the living standards of the Chinese people. To achieve that desired end, the government had targeted five reforms: on state-owned enterprises, on the system of investment and financing, on overall fiscal and financial reform, on social security, and on tax conversion. In all of these reforms, Xiang Huaicheng played a key role.
He placed top priority on social security reform, then on tax conversion to spur development in the rural areas of China, particularly in the western provinces, and third, financial and fiscal reforms. All of these reforms, in his view, would help to make state-owned enterprises more efficient. Conceding that these enterprises had too many employees, Xiang Huaicheng felt that the excess personnel should be removed from state enterprises, but that the state cannot just do that without making provisions for their welfare; thus it was necessary to have reforms in the social security system.
Always conscious of the objective of raising living standards, Xiang Huaicheng included provisions to increase social security expenditures in the economic programs for each year. He believed that the social security programs would help to promote social stability. The establishment of a comprehensive system of social security would be one of the best ways to promote reform in state-owned enterprises, assuring that those who were no longer employed in the various companies of the state would still be provided for, and thus helping achieve sustainable social development.