A Study On Changes Of China Fiscal Relations Between The Central And Local Governments_Based On The Conflict Between Centralization And Decentralization

The core of fiscal relations between the central and local governments is how to allocate the fiscal power and revenues between the central and local governments, or centralization and decentralization. It is more important for a big nation such as China. Using historical and institutional methods, the thesis studies the changes of China fiscal relations between the central and local governments, which based on the conflict between centralization and decentralization. Especially, the thesis places great emphasis on the changes of China fiscal relations between the central and local governments since the foundation of the People's Republic of China (PRC). The paper makes conclusion that it is the conflict between centralization and decentralization that pushes the reform of China's fiscal system forward. Moreover, this conflict exists endogenously in the traditionally planning system, which result in the inefficiency whatever the fiscal centralization or decentralization is exerted. This conflict was not only proven by the practices before China's reform, but also developed its extreme limit during the China's reform, which began by administrative decentralization. The revenue levied by the central government was decreasing continually, accompanied by the local governments preference for levying fee; the structure out-of-balance represented by the local division and the duplicating construction happened repeatedly, accompanied by the fiscal equality deteriorating among the regions. All above questions induced the market-oriented share-tax reform in 1994. Therefore, the result of china's reform is not the expectation of the reformers, but the natural result of the centralization and decentralization conflict movement.Studying the conflict between centralization and decentralization of China's feudal society does not cut off the history connection. At the same time, it is theconflict of centralization and decentralization that hide endogenously in China's feudal land institution. Under feudal private land institution, the extreme centralization leads to the extreme decentralization because the small land private property would becoming the big land private property finally.