Dynamics of central–local relations in China’s social welfare system

Abstract

Central–local relations have been always regarded as one of fundamental institutional arrangements that determine rapid economic development in China. However, the dynamics of central–local relations in China’s social welfare system have not been paid much attention. I argue, in this article, that China has moved from decentralization to recentralization in enacting its social welfare system, to address increasingly more serious social unrest stemming from loosened control over public welfare provision on the part of the central government during the decentralizing market reform era. The process of recentralization is embodied in three major policy instruments: (1) reintroducing the binding targets as a tool by which they could control local governments once again; (2) scaling up the proportion of special transfer payments and initiated central-guided regional pilot projects; and (3) strengthening line management and encouraging local administrative power to concentrate in provincial governments. I empirically illustrate the recent recentralization processes in several social policy fields such as public health, pension insurance, and basic education.