China has earmarked an education fund of 10.6 billion yuan (1.36 billion U.S. dollars) to cover the nine-year compulsory education fees and textbook expenditures for all rural school children, said an educational official on Tuesday.

"The fund can save each rural primary student at least 140 yuan (17.5 U.S. dollars) each year. If living maintenance subsidized, a rural middle school student can save 620 yuan (77.5 U.S. dollars) each year," said Tian Zuyin, an official with the Ministry of Education.

Statistics show about 200,000 rural dropouts in western China returned to campus last year with the help of the subsidy.

Zhao Lu, an official with the Ministry of Finance, warned against embezzlement of the fund.

China has exempted rural students in the western area from compulsory education fees last year, and will expand the exemption policy to the central and eastern regions this spring when the new semester starts.

Editor: Wing