Fiscal reform, decentralization and poverty alleviation in the context of China's 12th Five-Year Plan

Abstract

China is said to be one of the world's most economically decentralized countries. While the claim that economic as well as fiscal decentralization had much to do with the success of China's reforms is controversial and it has been argued that China's approach to administrative decentralization might over time threaten the success of the reform process, the highly remarkable extent of fiscal decentralization could have the potential to aid the effort at poverty alleviation, especially in the context of the ethno-regional dimension of the country's poverty problem, and reduce the extent of social stratification and enhance stability. This paper analyses the various issues related to fiscal reform and fiscal decentralization in China in the context of the country's 12th Five-Year Plan and explores the Plan's implications for poverty alleviation and the overcoming of stratification.