Centralization and Decentralization in China's Fiscal Management

The economic decentralization measures introduced in the late 1950s have long been viewed as a watershed in the economic and political evolution of post-1949 China. The most widely accepted interpretation is that these edicts transferred broad economic powers from the Centre to the provincial governments and that, as a result, the ability of the central government to control the allocation of the nation's economic resources was substantially impaired. This fundamental realignment in the internal balance of economic power is, in turn, viewed as having far-reaching implications for China's capacity for national economic planning and for a broad range of other important issues related to our understanding of China's developmental experience.