Breaking the Cycle? China’s Attempt to Institutionalize Center-Local Relations

Abstract

ABSTRACT This study argues that the current Chinese administration has attempted to institutionalize center-local relations by reforming keyparty-state entities, with the aim of mitigating thecentralization-decentralization cycle driven by ad hoc political mobilization. On the fiscal front, these reforms aim to consolidate budget management, merging national and local tax agencies, limiting local government borrowing, and centralizing expenditure planning. On the rule-enforcement front, the reforms try to empower the judiciary and the disciplinary inspection systems by isolating them from local influences. These changes havesystematically strengthened the center’s fiscal control and enhanced local compliance with national policies and rules. However, it remains to be seen whether the new structure will eventually be weighed down by local resistance, incentive issues, or changes in the center’s factional dynamics.