China is the most decentralized country in the world in terms of expenditures shares, with subnational governments responsible for 85 percent of government spending. Limited revenue autonomy and insufficient intergovernmental transfers have led to large unfunded mandates and a build-up of debt outside the budget. The government has recently announced an ambitious intergovernmental fiscal reform, which will increase the role of the central government. Comprehensive reform is needed to improve public service delivery, increase overall social spending levels and reduce regional disparities. Revenue reforms are also necessary to improve efficiency and reduce vulnerabilities from excessive subnational borrowing. These reforms are challenging, but are crucial so that the government can support China’s continued development and prosperity.

Since 1980, China's economy has been the envy of the world. Is annual growth rate of more than 9 percent during this period makes China today the world's fourth-largest economy. And this sustained growth has reduced the poverty rate from 60 percent of the population to less than 10 percent. However, such rapid growth has also increased inequalities in income and access to basic services and stressed natural resources. The government seeks to resolve these and other issues by creating a 'harmonious society' -- shifting priorities from the overriding pursuit of growth to more balanced economic and social development. This volume compiles analyses and insights from high-level Chinese policy makers and prominent international scholars that address the changes needed in public finance for success in the government's new endeavor. It examines such key policy issues as public finance and the changing role of the state; fiscal reform and revenue and expenditure assignments; intergovernmental relations and fiscal transfers; and financing and delivery of basic public goods such as compulsory education, innovation, public health, and social protection. And it offers concrete recommendations for immediate policy changes and for China's future reform agenda. Public Finance in China' is a must-read for specialists in public finance and for those seeking an understanding of the complex and daunting challenges China is facing.

Taxation in Modern China is concerned with tax and public financial issues arising in China's economic transition. The contributors, among the leading authorities on public finance, transitional economics and policy reform in China, direct attention to the largest and most comprehensive fiscal reform program in modern history. The essays collected here cover the main institutional, intergovernmental and industrial issues and address the long-term challenges facing China as well as transitional changes.

This paper provides an overview of recent Chinese reforms to introduce a modern system of fiscal federalism that balances the need for central macroeconomic control with the economic advantages of decentralized government. Following a discussion of the rationale for decentralization, the paper describes the main structural and economic developments in China in this area, including their impact on economic stabilization. The key measures in the 1994 fiscal reforms as well as reform initiatives needed in the future are also discussed.

This volume is about the political economy of Deng Xiaoping's Nanxun (tour of South China), which was the most critical phase in China's reform and development since 1978. The first round of Deng's reform resulted in high growth through the 1980s. However, it created a messy half-reformed economy with many problems, including the Tiananmen incident. The immediate aftermath of the Tiananmen was collapse of economic growth and reform deadlock. To break out from this low-level “reform-growth trap”, Deng decided to launch the Nanxun, not just to reignite the reform but also to complete China's march towards a market economy. Looking back, the Nanxun led to the most crucial reform breakthrough, which, in turn, sparked off a dynamic reform-growth-nexus for China's eventual economic take-off.The chapters in this volume were originally “policy reports” on China, meant for the Singapore government. These reports were written based on the information available at that time, and reflected the prevailing political mood.Each chapter is accompanied by a detailed introduction that is aimed at providing a broad background for readers to better understand the Nanxun period. The introduction also serves as a post-evaluation of the events based on new information, and shows how those events have evolved over the years. In combination, these chapters should piece together a reasonably realistic picture of the basic politics and economics of the crucial Nanxun period.

The Political Economy of China’s Great Transformation consists of three parts: first, covering the current political transformation, providing a general political background for the socio-economic, fiscal and urban and rural transformation. The book analyses the economic transformation and addresses the shortcomings of existing interpretations of the "Chinese Miracle" and develops a new multi-dimensional framework. In addition, it shows how the private sector has been developing and what a major role it is playing in pushing forward the overall economic development. The book also focuses on the analysis of China’s fiscal transformation. With the set of refined principles of fiscal federalism that the author has developed, it examines the problems of Chinese fiscal federalism in contrast to them. It further elaborates on topics such as the local government debt and explains why further reforms are necessary, making this book a very comprehensive read to understand China’s progress.

How do we understand the evolution of central-local relations in China during the reform period? This book addresses this question by focusing on eight separate issues in which the central-local relationship has been especially salient – government finance, investment control, regional development, administrative zoning, implementation, culture, social welfare and international relations. Each chapter introduces a sector and the way the center and various local governments have shared or divided power over the different periods of China’s reform era. The balance of power is gauged dynamically over time to measure the extent to which one level of government dominates, influences or shares power in making decisions in each of these particular domains, as well as what is likely to occur in the foreseeable future. The authors assess the winners and losers of these changes among key actors in China’s society. The result provides a dynamic view of China’s changing power relations.

Papers presented at the Senior Policy Seminar on Intergovernmental Fiscal Relations and Macroeconomic Management in Large Countires, held in New Delhi, February 26-28, 1991.

Designing a well-functioning intergovernmenal fiscal system is essential to the success of all the transitional economies' major reform goals: privatization, macroeconomic stability, more efficient performance and economic growth, and an adequate social safety net.

Is there a "best" way to divide fiscal responsibilities between China's central and local governments in China's three- tiered fiscal system?