The Explanation For Strategy Transformation Of China's Local Government: From Enterprise Operation To District Operation

With the transformation from traditional economy to market economy, the local government took the transformation from enterprise operation to region operation. The paper firstly expounds the process of transformation. There're two local governance patterns in China:the China's fiscal decentralization and political tournament, which formed the incentives for competition of local government. Basing on this trait of governing modes and market-oriented policy, the reason of local government's transformation can be found. And the land development right is under the control of the local government, which is the manifestation of the transformation. In addition, the economics model will be added to theoretical analysis. Lastly, one case will be raised to verify the explanation for strategy transformation of China's local government.The empirical results of this paper show that:the transformation of the local government was formed under the governing modes and economic system reform. The governing modes gave the local government incentive to promoting economic gain, and facing economic system reform, the local government gave up enterprise operation, and boosted economic growth through region operation.