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2024 | OriginalPaper | Chapter

10. Decentralization and Growth: The Story of China

Author : Jun Zhang

Published in: Reform, Transformation and Growth

Publisher: Springer Nature Singapore

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Abstract

The chapter delves into the complex relationship between China’s economic growth and its decentralization policies over the past 30 years. It discusses the transformation of China’s economy from a centrally planned system to a more decentralized one, focusing on the role of fiscal federalism in driving regional competition and economic growth. The text highlights the importance of local competition in promoting market preservation and infrastructure development, while also acknowledging the challenges and trade-offs associated with decentralization, such as regional disparities and the potential for local protectionism. The chapter offers a nuanced view of China’s economic reforms, emphasizing the interplay between central and local governments and the unique characteristics of China’s fiscal decentralization system. It also provides empirical evidence to support the argument that decentralization has played a crucial role in China’s economic success, despite the challenges it presents.

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previous chapter Growth, Capital Formation and Technological Choice: Explanation of Long-Term Factors for Recent Decline of Economic Growth in China

next chapter Why Have China Had a Good Infrastructure: Decentralization Competition, Governance and Infrastructure Investment Decisions

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The massive separation of powers in 1970 was also caused by strategic reason or reason of military preparation. Mao Zedong believed at that time that a new world war was about to break out, so this division of power had a more clear purpose for war preparation. To achieve this end, the whole country was divided into 10 cooperation zones, and the central committee of the Party called on the cooperation areas (including some provinces and municipalities) to set up their own industrial system to prepare for the war.

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The number of deaths caused by the famine does not have an agreed figure, and scholars have different estimates in their studies. The figure is between 15 and 35 million. The Chinese government has so far failed to publish any data on the number of deaths in the three-year famine. Speculation and estimates by scholars are mostly based on the national census data in 1953, 1964 and 1982 aided by the “1/1000 Fertility Survey of 1982 and other data.

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Title: Decentralization and Growth: The Story of China
Author: Jun Zhang
Publisher: Springer Nature Singapore
Book: Reform, Transformation and Growth
Print ISBN: 978-981-9957-11-8

Electronic ISBN: 978-981-9957-12-5

Copyright Year: 2024
DOI: https://doi.org/10.1007/978-981-99-5712-5_10

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