Abstract
Public finance is at the heart of politics. In China, public finance has remained marginal to political contestations. This is puzzling because public revenue as a percentage of gross domestic policy has risen rapidly in the past two decades, indicating enhanced extractive efforts by the state. By examining two components of China's public financial system—tax and nontax revenues—this article considers the specific sources of China's public revenues and the state‐society relationship implicated in the processes of collecting them. I argue that there has been an institutional design by the Chinese central state to depoliticize public finance in the reform era, with both intended and unintended consequences. First, China's evolving tax structure played the role of fending off the formation of politically active social groups that could develop out of a progressive tax profile. Second, fiscal centralization attempted by the central state since the 1990s has severed the fiscal contracts established previously between grassroots governments and local communities. It has turned local governments into upwardly oriented applicants for central fiscal transfers and economic entrepreneurs on the capital market.Related Articles Gatchair, Sonia D. 2015. “.” Politics & Policy 43 (): 887‐913. http://onlinelibrary.wiley.com/doi/10.1111/polp.12139/full Wise, Carol, and Cintia Quiliconi. 2007. “.” Politics & Policy 35 (): 410‐438. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2007.00067.x/full Hu, Shaohua. 2007. “.” Politics & Policy 35 (): 136‐153. http://onlinelibrary.wiley.com/doi/10.1111/j.1747-1346.2007.00051.x/full
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