A Constitutional Analysis of China’s Fiscal Transfers—The Perspective on Central and Local Relationship

Abstract

Section 4 of Article 3 in 82 Constitution actually reflects some exploratory political ideas more than it provides concrete normative model of Central and local relationship. China’s form of state structure and its system design are rich in intension. China is not a typical unitary system and there should be Local Governance according to 82 Constitution. The tension between centralization and decentralization presents itself variously in different periods accompanying the changes of fiscal and taxation system. Since 1994, the tax system reform, especially fiscal transfers, has strengthened centralization, influenced the Constitutional structure of Local Governance, and interfered with the delicate balance in the Constitutional framework. And its roots still lie in the internal tension of the Constitutional framework. Construction of modernization as the reason of state in 82 Constitution could provide normative purport in some sense for Section 4 of Article 3 aimed at dissolving the tension.