Local Governments In China Research Articles

Reform of Budget Performance Management and Local Financial Pressure in China

As the situation of tight fiscal balance among local governments in China continues to intensify, research on how to release local fiscal pressure has attracted much attention. At the national level, the reform of budget performance management has significantly reduced the financial pressure on local governments; Mechanism analysis shows that reform can alleviate local fiscal pressure through two channels: improving fiscal expenditure performance and optimizing regional institutional environment; The analysis of regional heterogeneity shows that the reform only reduced the local fiscal pressure in the eastern region, while the fiscal pressure in non eastern regions did not decrease but instead increased. Finally, this article proposes suggestions for addressing the issues of unbalanced and insufficient reforms, which provide policy insights for China's subsequent efforts to improve the quality and efficiency of budget performance management.

Does centralization of tax administration regulate tax competition? Evidence from a quasi-natural experiment in China

This study investigates how the centralization of tax administration affects tax competition among local governments in China, using the merger of the State Tax Bureau and Local Tax Bureau in 2018 as a quasi-natural experiment. Our findings demonstrate that the centralization of tax administration effectively curtails the degree of tax competition among local governments, resulting in an increase in the tax burden for enterprises previously managed by the local tax bureaus. Mechanism tests indicate that the reform significantly increases the tax burden on enterprises in regions with high levels of tax competition, and overall reduces the divergence of tax burden among enterprises, restraining cross-regional investments driven by tax avoidance. Additionally, we find that after the means of tax competition among local governments are curtailed, competition continues through fiscal expenditure. Our study provides evidence from China on curbing inter-governmental tax competition from the perspective of administrative institutional reform.

Promotion Effects of High-Speed Rail on Urban Development: Evidence from Three Lines in China

Amid the vigorous development of the high-speed rail (HSR) network, local governments in China generally consider the construction of HSR as a crucial task in their regional development strategies. Currently, most provincial capitals and prefecture-level cities in the eastern and central regions of China already have operational HSR services. This study aims to examine a key question: has the objective of local governments to promote urban development through the construction of HSR been effective? The research selects cities along the Beijing–Shanghai, Beijing–Guangzhou, and Harbin–Dalian HSR lines as the study subjects. Based on the principles of proximity and similarity, cities with operational HSR and those without are chosen as the experimental group and the control group, respectively. Following the double difference (difference-in-differences) approach, an advantage index is proposed to systematically evaluate the impact of HSR operation on urban development from three dimensions: population aggregation, economic development, and expansion of construction land. Furthermore, the evaluation results are systematically clustered to identify city types that exhibit different promotional effects in various dimensions. The research findings indicate the following: (1) The promotion effect of HSR on the development of small to medium-sized cities is more reflected in economic growth and construction land growth. (2) The promotion effect of HSR on the development of large cities is more reflected in the growth of the employment population. (3) For smaller or economically less-developed cities, HSR may be detrimental to the aggregation of resident and employment populations. (4) Cities with moderate size and good economic development have the opportunity to use HSR to promote population aggregation. On this basis, combined with the findings above, strategies to promote the coordinated development of high-speed rail construction and urban systems are discussed.

The Economic Governance Capability of the Government and High-Quality Development of China’s Tourism Industry

The economic governance capacity of local government in China is instrumental in fostering tourism development quality and sustainability from the aspects of leading resource allocation, maintaining market fairness, and promoting enterprise innovation, yet this important aspect has received limited attention in present research. China’s tourism development quality is evaluated in five dimensions in this study: innovation, greenness, coordination, openness, and sharing. Employing a fixed-effects model with data from 2000 to 2019 for 30 Chinese provinces, the paper empirically tests the influence of government economic governance capacity on the tourism development quality. Our findings reveal several key insights: (1) The economic governance capacity of the government significantly contributes to enhancing the tourism development quality. (2) It is shown in the regression results of the sub-indexes of the government’s economic governance capacity and tourism development quality that the innovative development and green development of the tourism industry can be accelerated strongly by the government’s economic governance capacity, while tourism development quality can be improved significantly by the development of non-state-owned economy, the development of factor market, the development of market intermediary organizations, and the legal system. (3) It is shown in mechanism analysis that the government’s economic governance capacity can stipulate regional competition, industrial structure upgrading, improve the level of informatization, and eventually improve tourism development quality. This comprehensive analysis sheds light on the intricate relationship between local government economic governance capacity and tourism development quality, offering a novel research perspective and valuable reference points for policymakers and scholars engaged in the analysis and construction of sustainable tourism development strategies.

Digital economy and economic competitive pressure on local governments: Evidence from China

For decades, fiscal decentralization and gross domestic product growth targeting have resulted in fierce economic competition among local governments in China, putting tremendous economic competitive pressure on them. The latter has serious social and economic implications and is a major issue for policymakers. This study analyzes data from China's 30 provinces for 2011–2021. It demonstrates that digital economic development could considerably reduce economic, competitive pressure on local governments, with trade openness and entrepreneurial dynamism serving as impact mechanisms. This study also found that the alleviating effects are more pronounced in regions with a poor innovation environment, a less developed economy, or lagging human resources. These findings emphasize the important role of the digital economy in increasing regional competitiveness and reducing regional disparities.

Formation of Aluminum-Fluoride Complexes Compromises Defluoridation Efficiency of Aluminum-Based Coagulation.

Aluminum-based coagulation has long been regarded as a reliable and cost-effective process for the defluoridation of industrial effluents. However, such a well-recognized viewpoint is challenged by the underestimation of fluoride levels in treated effluents. Herein, we developed a systematic protocol to distinguish different fluoride species, including free F-, exchangeable fluoride (EF), and nonexchangeable fluoride (NEF). We demonstrated that EF forms complexes with octahedral aluminum (AlO6) on the surface of polyaluminum and can be exchanged with (1,2-cyclohexylenedinitrilo)-tetraacetic acid (CDTA). However, NEF is incorporated with tetrahedral aluminum (AlO4) at the core of polyaluminum, as confirmed by 19F/23Al NMR and ESI-MS analysis, and cannot be exchanged with CDTA due to steric hindrance. Increasing the aluminum coagulant dosage effectively reduced free F- levels in photovoltaic and electroplating effluents to below 1 mg/L. However, the total fluoride content, with over half in the form of EF and NEF, was above 2 mg/L, exceeding the discharge limit regulated by many local governments of China. Furthermore, both EF and NEF can gradually transform to free F- in natural waters. Our findings indicate that aluminum-based coagulation inevitably accompanies the formation of substantial amounts of EF and NEF, compromising its defluoridation efficiency toward industrial effluents.

Transitioning to a green economy in China: The environmental and economic impacts of green credit.

Economic green transition is the change of economic development mode under environmental constraints; this process will generate huge demand for credit financing. Understanding the connection between credit allocation and environmental performance is crucial for the coordinated development of the economy and environment. Utilizing the Chinese Industrial Enterprises Database, I constructed a city-level green credit index and compiled panel data from 2006 to 2013 for 282 selected cities in China. A spatial model was employed to explore the influence of green credit on the economic green transition. The findings reveal a positive relationship between green credit and economic green transition during the study period. Green credit not only enhances local green total factor productivity but also exerts beneficial impacts on adjacent areas though demonstration effects. Additionally, the reallocation of credit resources and the innovation of clean technologies are identified as key mechanisms through which green credit fosters a greener economy. However, the study also finds that the impact of green credit is moderated by factors such as a high reliance on natural resources, the underdevelopment of market intermediaries, and excessive governmental intervention, which can undermine its effectiveness. Furthermore, the efficacy of green credit exhibits regional heterogeneity; it has a significant positive impact in the eastern regions of China, while its influence appears to be non-significantly positive in the central and western regions. This study enriches the research on the macroeconomic impacts of green credit, offering practical evidence and theoretical support for the implementation of green credit policies by local governments in China.

Can the BRI Deliver High-Quality Development? A Multi-Actor Analysis of China’s Overseas Economic Zones

ABSTRACT The Belt and Road Initiative (BRI) has evolved from its ambitious beginning into a framework focused on high-quality development (HQD), emphasizing environmental sustainability and people-centered development. This study examines to what extent these new directives are implemented in the context of China’s overseas economic zones (OEZs), employing a multi-actor-influence model to analyze the complex interactions and challenges inherent in these projects. Focusing on the Vientiane Saysettha Development Zone (VSDZ) in Laos, our analysis identifies three primary institutional challenges: fragmentation between the central and local governments in China, structural constraints imposed on Chinese businesses, and inadequate cooperation between Chinese and host country actors. These challenges underscore the complexities of translating Beijing’s top-down policy into effective action on the ground. The paper concludes with a discussion of the broader implications of these findings for the BRI’s future development.

The Effect of Urban Experience on the Settlement Intention of Rural Migrants: Evidence from China

Urban experience can increase the ability of rural migrants to integrate into cities, thereby enhancing their settlement intentions. This paper empirically supports these findings using data from the China Migrants Dynamic Survey (CMDS). The mechanism analysis finds that urban experience promotes economic survival skills and adaptive capacity among rural migrants and enhances their willingness to settle in cities. It has significantly increased the labor market income, social activity, and interpersonal interaction of rural migrants. Compared with other cities, the urban experience of rural migrants who move to first-tier cities in their first migration significantly impacts their willingness to settle in cities. Finally, further discussion finds that the impact of urban experience on rural migrants’ settlement intention is nonlinear, with an inverted U-shaped curve. These findings can help local governments in China improve the integration ability and willingness of rural migrants to settle in cities through measures such as optimizing household registration and improving the social security system. They can also provide lessons for urbanization development in other countries.

What contributes to the collaborative network of emergency information release? A case study of COVID-19 response in China

ABSTRACT Transparent and proactive emergency communication plays a crucial role in effectively responding to public crises. The effectiveness of emergency management throughout a crisis event depends on the organizations the local government collaborates with in information release. This study reviewed the institutional basis of Chinese emergency information release and explored the mechanism of collaborative networks in press conferences through the Exponential Random Graph Model (ERGM). The findings suggest that (1) local governments in China are gradually forming the whole-of-society pattern of emergency information release by establishing network structures with multiple triangulations across different types of organizations, irrespective of their jurisdictional level; (2) while an emergency response plan defines the responsibilities of certain organizations, in practice, network actors extend beyond these designations; (3) past collaborations have a lasting impact on subsequent ones, and the key participants in emergency response tend to create path dependence through long-term collaboration.

How Do Toothless Tigers Bite? Extra-institutional Governance and Internet Censorship by Local Governments in China

Abstract China has constructed a rigorous state apparatus to control its online social content. To date, research has largely focused on the central government's cyber control, but the less studied local cyberspace administrative forces are also important. Our fieldwork and interviews at a county-level cyberspace administration office (CAO) in east China reveal that the local CAO had been rendered a “toothless tiger” with insufficient technology, power and labour. However, it has made up for these deficiencies by utilizing systems such as outsourced surveillance, organized mass reporting and personnel secondment. We contend that these practices, which we label “extra-institutional governance” (EIG), emerge when bureaucracies with limited resources face external pressures. The findings shed light on how censorship machines operate in local governments in China and reveal the general dynamics of how bureaucratic organizations adapt to environmental pressures.

Policy Instrument Preferences and Optimization Strategies: Based Text Analysis of Provincial-Level Education Digitalization Policy from China

In the context of world education digitalization, the Chinese government has formulated China’s education digitalization strategy. The education digitalization policy tools of provincial governments are an important factor affecting the effectiveness of education digitalization policies. In this study, a text quantification and content analysis is conducted on educational digital policy documents released by eight provinces of China during the 14th Five-Year Plan period in China. This is based on a two-dimensional analysis framework of “instruments-value” using instrument types and policy principles, and NVivo software. The research outcomes reveal the following: (1) The distribution of educational digital policy instrument types is uneven, with an excess of supply-side instruments and a noticeable shortage of demand-side instruments. (2) Different policy instruments exhibit varying degrees of preference in implementing policy principles. There is a stronger emphasis on technology application and balanced development, while the emphasis on service principles promoting diverse participation is relatively weaker. (3) The policy instruments that facilitate interaction between policymakers and educational entities require further strengthening. In light of these findings, local governments in China should strengthen the use of demand-side policy instruments to achieve comprehensiveness and sustainability in educational digitalization. Policymakers should pay more attention to the demands of educational entities to shift educational digitalization from being technology driven to being demand driven. Furthermore, policy instrument selection should adhere to the value of serving and supporting individuals and reinforce the concept of multi-participation in their development, ultimately improving the precision and coordination of policies, and achieving a harmonious integration of technological and value aspects of policy instruments.

Provincial economic growth and firm excess investment: Evidence from China

Local governments in China frequently report provincial economic growth rates that exceed their targets. Prior studies suggest that this phenomenon is attributable to governmental influence over local firms, particularly through coercing these firms into escalating investments to maximize economic expansion. Using a sample of 18,349 Chinese listed firms from 2001 to 2017, we find that firms located in regions that exceed economic growth targets tend to invest more heavily. This effect is more pronounced in years when local government officials face stronger promotion pressure; furthermore, excess economic growth is associated with diminished investment efficiency within firms and increased government subsidies. These findings suggest that excess economic growth proxies for local government opportunism and plays an important role in local firms’ investment decisions.

A study of market segmentation, government competition, and public service efficiency in China: Based on a semi-parametric spatial lag model.

Despite significant growth in fiscal expenditure, the overall level of public services in China remains inadequate. One approach to improving government public service efficiency from the perspective of management psychology is to strengthen government competition. However, only a few studies have explored the improvement of public service efficiency through government competition, with even fewer addressing the phenomena of market segmentation and spatial effects that accompany the process of government competition. This paper aims to fill this research gap by examining the effects of government competition and market segmentation on public service efficiency, as well as their spatial disparities. We initially employs the DEA method to assess the efficiency of public services based on inputs and outputs, and examines its spatial variations. Subsequently, a semi-parametric spatial lag panel model is utilized to validate the effects of market segmentation and government competition on public service efficiency. Our findings indicate that inter-provincial market segmentation leads to a decline in public service efficiency. Moreover, the influence of horizontal competition between local governments on public service efficiency varies depending on the degree of positive and negative effects in their competition dynamics. The impact of vertical competition between central and local governments on public service efficiency is influenced by the degree of fiscal decentralization. When the level of fiscal decentralization is below 0.808, vertical competition between central and local governments has a promoting effect on public service efficiency. However, when the degree of fiscal decentralization exceeds 0.08, this promoting effect weakens and gradually transforms into a negative influence. The insights and evidence provided by this study offer valuable guidance for for effectively reshaping the fiscal relations between the central and local governments in China and improving public service efficiency in the context of a new round of fiscal and tax system reforms.

Development of New Generation of Artificial Intelligence in China: When Beijing’s Global Ambitions Meet Local Realities

ABSTRACT How did China become one of the leaders in AI development, and will China prevail in the ongoing AI race with the US? Existing studies have focused on the Chinese central government’s role in promoting AI. Notwithstanding the importance of the central government, a significant portion of the responsibility for AI development falls on local governments’ shoulders. Local governments have diverging interests, capacities and, therefore, approaches to promoting AI. This poses an important question: How do local governments respond to the central government’s policies on emerging technologies, such as AI? This article answers this question by examining the convergence or divergence of central and local priorities related to AI development by analysing the central and local AI policy documents and the provincial variations by focusing on the diffusion of the New Generation Artificial Intelligence Development Plan (NGAIDP) in China. Using a unique dataset of China’s provincial AI-related policies that cite the NGAIDP, the nature of diffusion of the NGAIDP is examined by conducting content analysis and fuzzy-set Qualitative Comparative Analysis (fsQCA). This study highlights the important role of local governments in China’s AI development and emphasises examining policy diffusion as a political process.

The Impact of Financing Constraints on the Efficiency of Investment and Construction: Evidence from Municipal Infrastructure in China

Imperfect external capital market and internal soft budget constraints are important reasons for the issue of enterprise financing constraints. This paper studies the impact of financing constraints and influencing factors of financing constraints in municipal infrastructure investment and construction for local governments by using the panel data from 2003 to 2018 in China. The results show that, first, there are great financing constraints in municipal infrastructure investment and construction for local government in China. Second, the increase of self-financing capacity and external financing capacity can reduce the level and uncertainty of financing constraints, thus improving the efficiency of municipal infrastructure investment and construction. Third, the expansion of the city scale may reduce the uncertainty of financing constraints, but improve the level of financing constraints thus reducing the efficiency of municipal infrastructure investment and construction.

Social Embeddedness, Power Balance, and Local Governance in China

Why are informal institutions beneficial to local governance in some context but harmful in others? This research argues that local governance outcomes are jointly determined by social embeddedness – the extent to which local community leaders connect with their community members through informal ties, and power balance – the extent to which political power is balanced among local ruling elites to prevent it being captured by informal groups. We test our theory by investigating how informal lineage groups interact with formal political power to influence village governance in China. Using a four-round survey (2005–2016) in rural China, we find that village political leaders whose power is oligopolistically shared by two large clans distributed higher land-taking compensation to land-dispossessed households, while village leaders whose power is monopolized by one large clan paid less. This is because socially embedded village officials from the monopolized ruling clan are better able to fragment collective resistance, buy off aggrieved villagers, and collude with the state. The research reconciles the positive and negative perspectives of the role of informal institutions in local governance and highlights the effect of social embeddedness on local governance is conditional on the balance of power among local ruling elites.

When blame avoidance meets transparency: local governments’ bandwagon strategy in environmental information disclosure in China

ABSTRACT Despite the ample literature on government transparency, our knowledge about local governments’ strategic responses to transparency mandates, especially those in non-democratic regimes, is limited. This study sets out to fill this gap by investigating local governments’ strategic behaviours in implementing environmental information disclosure (EID), a specific form of government transparency, in the context of China. We assert that local governments in China are largely steered by the motivation of blame avoidance (BA) in EID and tend to adopt the bandwagon strategy, a specific form of anticipatory BA strategy. Moreover, having patronage ties with political superiors weakens local governments’ tendency to engage in the bandwagon strategy. Using city-level governments as the unit of analysis, we apply spatial econometric models in various specifications and find strong evidence that substantiates our arguments.

IMPACT OF HETEROGENEOUS LOCAL GOVERNMENT COMPETITION AND GREEN TECHNOLOGY INNOVATION ON ECONOMIC LOW-CARBON TRANSITION: NEW INSIGHTS FROM CHINA

Low-carbon transformation of the economy is the inevitable orientation of socialism with Chinese characteristics to high-quality development in the new era, while the Chinese decentralized development model determines that the competition of local governments in China is an important factor influencing the green technological innovation on low-carbon transformation of the economy. How to achieve coordinated economic growth and ecological environment has become a prob-lem for local governments. Data from a Chinese provincial panel covering the years 2007–2019 is used to investigate the effects of heterogeneous local government competition (Comp), namely, economic, ecological and service competitions on economic low-carbon transition, and moderating effects of heterogeneous government competition and green technology innovation (GTECH) on the low-carbon economic transition (LCT). The results reveal that there are substantial disparities in the consequences of heterogeneous government competition on low-carbon economic transition (LCT). Among them, economic competition significantly dampens economic low-carbon transition (LCT), and ecological competition and service competition significantly boost economic low-carbon transi-tion (LCT). After performing robustness checks, these results continue to be strongly convincing. The study of moderating effects shows that economic competition can dampen the positive influence of green technology innovation (GTECH) to the economic low-carbon transition (LCT). However, ecological competition and service competition facilitate the promoting effect of green technology innovation on economic low-carbon transition (LCT).

How does the environmental attention of local governments affect regional green development? Empirical evidence from local governments in China

Due to the continuous progress of constructing sustainable environments in China, the role played by the Chinese central government as the main body for promoting green development is worth studying. Because China’s ecological civilization building has been steadily progressing. Governments at all levels in China have prioritised the development of environmental civilization as a key aspect of regional growth. However, the actual impact and mechanisms of influence of this construction still require further investigation. This paper constructs a government environmental attention index using word frequency found in the Report on the Work of the Government. It uses a long difference model to study the impact and mechanism of government environmental attention on urban green efficiency, carbon emissions and air quality. The results show that the government’s ecological attention can improve green efficiency, and air quality, but it can also lead to increased carbon emissions, and the impact is particularly evident in the eastern and western regions of the country. This is because the government’s emphasis on the environment significantly impacts on environmental regulations and technological progress, and is directly influenced by fiscal bias and financial pressure. Given the results, we put forward some policy suggestions that local governments should improve the intensity of local environmental regulation, encourage green technology innovation, provide encouraging conditions for environmental development, and establish a long-term strategic vision. The findings in this study has implications for promoting the implementation of local governments’ environmental protection and the development of sustainable societies in China.