Local Government And Local Finance Of The Republic Of China (1927-1945)

This monograph is theoretically based on the state transformation theory of China. Since the start of modern times, China has been confronted with the transformation from a traditional political society into a modern one and the reconstructing of a modern nation country. As far as local politics is concerned, modernization means the expansion and infiltration of state power into the grassroots society as well as the reform of the nature, structure and behavioral mode of local power. In Europe, augmentation of wealth and modernization served as the motivation in not only the forming of a nation but also the shaping of a state. Then in China, what kind of interactive relationship came into shape between local power and local finance?This paper aims to analyze the internal relationship between the modern reform of local power (the possibility and the limit of development) and the changes in local finance. From 1927 to 1945, China was at a critical moment, threatened by both domestic trouble and foreign invasion. Local powers under the rule of Kuomingtang government were undergoing drastic reforms. In the course of reshuffle and expansion of local power, finance acted as the motivation and also was the important part of local power construction. In context of modernization and reconstructing of a nation state, local power enhanced the function of absorbing funds from the grassroots society. Consequently, many relevant aspects of local financial underwent profound changes, such as its division and regulation, financial executive management, finance supervision, levying of revenue. New local fund-raising mechanism came into shape and the state-society relationship also has subsequent changes. In Zhejiang, from 1927 to 1937, the provincial government dedicated its efforts to modernization drive. The fact that income fell short of expenditure in finance posed direct pressure to reform in the county government. In 1930s the launching of county government building was the inherent impetus for the local power and local financial reform. The transformation of the local power and local finance took place simultaneously, which made considerable preparation in terms of fund and political mobilization. Especially in the early period of the War of Resistance against Japanese Aggression (1937-1941), the improving of local finance in some way showed that the pre-War preparation had produced the initial result. In the latter part of the War (1942—1945) , autonomous finance was established and the system enjoyed sound development. But owing to the conflicts in inherent structure of finance and politics (including such factors as the relationship between the central and local government) and the undermining of external factors, the operation of autonomous finance fell into a plight. The economization of local power corrupted the power, and the then grassroots units like Bao and Jia under the county level raised funds by illegal means such as irrational allotment. The Kuomingtang Government tried to save local economy out of trouble by regulating the autonomous finance, but all the efforts ended in failure. The local finance could no longer provide impetus for the operation of local power. As a result, the local power was out of control and the grassroots society fell into disorder.