Local tax effort in Shanghai, 1987-93: Decentralization vs. local fiscal balance

Issues and Studies

Volumn 36, Issue 6, 2000, Pages 116-138

  Hsu, S Philip ^a  

^a NONE

Author keywords

Decentralization; Extrabudgetary revenue; Local fiscal balance; Tax effort; Turnover taxes

Indexed keywords

EID: 0039257838     PISSN: 10132511     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (57)

1. Zhang Le-yin, "Central-Provincial Fiscal Relationship, Budgetary Decline, and the Impact of the 1994 Fiscal Reform: An Evaluation," The China Quarterly, no. 157 (1999): 115-41; Jae Ho Chung, "Studies of Central-Provincial Relations in the People's Republic of China: A Mid-Term Appraisal," ibid., no. 142 (1995): 488-508.
2. Zhang Le-yin, "Central-Provincial Fiscal Relationship, Budgetary Decline, and the Impact of the 1994 Fiscal Reform: An Evaluation," The China Quarterly, no. 157 (1999): 115-41; Jae Ho Chung, "Studies of Central-Provincial Relations in the People's Republic of China: A Mid-Term Appraisal," ibid., no. 142 (1995): 488-508.
3. Zhang, "Central-Provincial Fiscal Relationship," 116.
4. Wang Binsheng, "The Problems and Solutions of Subnational Public Finance under the Tax Assignment System," Zhongguo caizheng (China's Public Finance), no. 162 (1998): 54.
5. "Regulating the Central-Local Relations in Fiscal Distribution: An Interview with Jiang Yonghua, Chief of the Section of Subnational Public Finance in the Ministry of Finance," ibid., no. 157 (1998): 16-17.
6. Wang Shaoguang and Hu Angang argued in 1994 that the central government's share in total state revenue had dwindled chronically during the reform era, a view which was part of their "two declining ratios" thesis. By contrast, the share of subnational governments had grown steadily. See Wang Shaoguang and Hu Angang, Zhongguo guojia nengli baogao (A report on China's state capacity) (Shenyang: Liaoning renmin chubanshe, 1993), 1-3. More recently Hu Angang indicated that the two declining ratios were among the key rationales for the center to launch the tax assignment reform. See Hu Angang, "A Tough Job of Institutional Innovation: Preliminary Evaluation of the Tax Assignment Reform," Donga jikan (East Asia Quarterly) (Taipei) 28, no. 1 (1997): 31-35.
7. Wang Shaoguang and Hu Angang argued in 1994 that the central government's share in total state revenue had dwindled chronically during the reform era, a view which was part of their "two declining ratios" thesis. By contrast, the share of subnational governments had grown steadily. See Wang Shaoguang and Hu Angang, Zhongguo guojia nengli baogao (A report on China's state capacity) (Shenyang: Liaoning renmin chubanshe, 1993), 1-3. More recently Hu Angang indicated that the two declining ratios were among the key rationales for the center to launch the tax assignment reform. See Hu Angang, "A Tough Job of Institutional Innovation: Preliminary Evaluation of the Tax Assignment Reform," Donga jikan (East Asia Quarterly) (Taipei) 28, no. 1 (1997): 31-35.
8. Lan Zhiyong, "The Division of Labor among the Center, Localities, and the Market in the Social Security System," in Zhongguo shehui baozhang tizhi gaige (Reform of China's social security system), ed. Xu Diangqing, Yin Zunsheng, and Zheng Yuxin (Beijing: Jingji kexue chubanshe, 1999), 124-29.
9. "Carry out the Governmental Organizational Reform Positively and Steadfast," Liaowang xinwen zhoukan (Outlook News Weekly), no. 739 (1998): 1.
10. Hu Jiayong, "Why Does the Size of Our Government Keep Growing?" Gaige (Reform), no. 90 (1998): 87-89.
11. An Weihua, "An Exploration of the Dynamics of the Organizational Reform of the Government," Shehui kexue (Social Sciences), no. 93 (2000): 31-32.
12. For an updated look into how provincial or city governments affect the overall pace and content of reform, see, for instance, the following four edited volumes that reflect concerns of quite a number of scholars: Peter Tsan-yin Cheung, Jae Ho Chung, and Lin Zhimin, eds., Provincial Strategies of Economic Reform in Post-Mao China: Leadership, Politics, and Implementation (Armonk, N.Y.: M.E. Sharpe, 1998); David S.O. Goodman, ed., China's Provinces in Reform: Class, Community; and Political Culture (New York: Routledge, 1997); Hans Hendrischke and Feng Chongyi, eds., The Political Economy of China's Provinces: Comparative and Competitive Avantage (New York: Routledge, 1999); and Jae Ho Chung, Cities in China: Recipes for Economic Development in the Reform Era (New York: Routledge, 1999).
13. For an updated look into how provincial or city governments affect the overall pace and content of reform, see, for instance, the following four edited volumes that reflect concerns of quite a number of scholars: Peter Tsan-yin Cheung, Jae Ho Chung, and Lin Zhimin, eds., Provincial Strategies of Economic Reform in Post-Mao China: Leadership, Politics, and Implementation (Armonk, N.Y.: M.E. Sharpe, 1998); David S.O. Goodman, ed., China's Provinces in Reform: Class, Community; and Political Culture (New York: Routledge, 1997); Hans Hendrischke and Feng Chongyi, eds., The Political Economy of China's Provinces: Comparative and Competitive Avantage (New York: Routledge, 1999); and Jae Ho Chung, Cities in China: Recipes for Economic Development in the Reform Era (New York: Routledge, 1999).
14. For an updated look into how provincial or city governments affect the overall pace and content of reform, see, for instance, the following four edited volumes that reflect concerns of quite a number of scholars: Peter Tsan-yin Cheung, Jae Ho Chung, and Lin Zhimin, eds., Provincial Strategies of Economic Reform in Post-Mao China: Leadership, Politics, and Implementation (Armonk, N.Y.: M.E. Sharpe, 1998); David S.O. Goodman, ed., China's Provinces in Reform: Class, Community; and Political Culture (New York: Routledge, 1997); Hans Hendrischke and Feng Chongyi, eds., The Political Economy of China's Provinces: Comparative and Competitive Avantage (New York: Routledge, 1999); and Jae Ho Chung, Cities in China: Recipes for Economic Development in the Reform Era (New York: Routledge, 1999).
15. For an updated look into how provincial or city governments affect the overall pace and content of reform, see, for instance, the following four edited volumes that reflect concerns of quite a number of scholars: Peter Tsan-yin Cheung, Jae Ho Chung, and Lin Zhimin, eds., Provincial Strategies of Economic Reform in Post-Mao China: Leadership, Politics, and Implementation (Armonk, N.Y.: M.E. Sharpe, 1998); David S.O. Goodman, ed., China's Provinces in Reform: Class, Community; and Political Culture (New York: Routledge, 1997); Hans Hendrischke and Feng Chongyi, eds., The Political Economy of China's Provinces: Comparative and Competitive Avantage (New York: Routledge, 1999); and Jae Ho Chung, Cities in China: Recipes for Economic Development in the Reform Era (New York: Routledge, 1999).
16. Susan Shirk, The Political Logic of Economic Reform in China (Berkeley: University of California Press, 1993), 149-96.
17. Peter Tsan-yin Cheung, "Introduction: Provincial Leadership and Economic Reform in Post-Mao China," in Cheung, Chung, and Lin, Provincial Strategies of Economic Reform, 3-18.
18. World Bank, China: Revenue Mobilization and Tax Policy (Washington, D.C.: World Bank, 1990), 283-85.
19. Christine P.W. Wong, Christopher Heady, and Wing T. Woo, Fiscal Management and Economic Reform in the People's Republic of China (Hong Kong: Oxford University Press, 1995), 96: Ma Jun, Intergovernmental Relations and Economic Management in China (New York: St. Martin's Press, 1997), 16; Zhou Xiaochuan and Yang Zhigang, Zhongguo caishui tizhi de wenti yu chulu (Problems and solutions to China's fiscal and tax system) (Tianjin: Tianjin renmin chubanshe, 1992), 72.
20. Christine P.W. Wong, Christopher Heady, and Wing T. Woo, Fiscal Management and Economic Reform in the People's Republic of China (Hong Kong: Oxford University Press, 1995), 96: Ma Jun, Intergovernmental Relations and Economic Management in China (New York: St. Martin's Press, 1997), 16; Zhou Xiaochuan and Yang Zhigang, Zhongguo caishui tizhi de wenti yu chulu (Problems and solutions to China's fiscal and tax system) (Tianjin: Tianjin renmin chubanshe, 1992), 72.
21. Christine P.W. Wong, Christopher Heady, and Wing T. Woo, Fiscal Management and Economic Reform in the People's Republic of China (Hong Kong: Oxford University Press, 1995), 96: Ma Jun, Intergovernmental Relations and Economic Management in China (New York: St. Martin's Press, 1997), 16; Zhou Xiaochuan and Yang Zhigang, Zhongguo caishui tizhi de wenti yu chulu (Problems and solutions to China's fiscal and tax system) (Tianjin: Tianjin renmin chubanshe, 1992), 72.
22. Elizabeth J. Perry, "Trends in the Study of Chinese Politics: State-Society Relations," The China Quarterly, no. 139 (1994): 706-7.
23. This elaboration is an application of Shirk's conceptions of the two approaches to the issue of SOEs' fiscal supply to the state. For the specifics of Shirk's conceptions, see Shirk, The Political Logic, 221-44.
24. One of the leading provinces to do this was Guangdong. For the practice of such an expansion in Guangzhou during the CMRS period, see Szue-Chin Philip Hsu, "Policy Implementation under Dual Decentralization in the People's Republic of China, 1979-1995: Coalitions, Institutions, and International Economic Links" (Ph.D. dissertation, University of Denver, 1998; available at Ann Arbor: University of Michigan Microfilms International, 1998), 232-37.
25. Interviews #9502-0102, #9502-0205, and #9504-0208.
26. "A Bundle of Trial-Point Enterprises in the Municipality Shitted to a New Scheme of Turnover Taxes," Jiefang ribao (Liberation Daily) (Shanghai), March 5, 1987, 2.
27. Shanghai Academy of Social Sciences, Shanghai jingji nianjian 1987 (Shanghai economic yearbook 1987) (Shanghai: Shanghai jingji nianjian chubanshe, 1988), 634.
28. World Bank, China: Revenue Mobilization and Tax Policy, 120-21.
29. Zhou Shaojun, "An Exploration of the Models of Tax Collection and Administration," Shuiwu yanjiu (Taxation Research), no. 29 (1987): 37.
30. Ibid., 36; Study Group of Topics on Tax Collection and Management, "Reform of Tax Collection and Administration in the Nation and Related Situations," Shuishou yanjiu ziliao (Materials for Taxation Research), no. 53 (1992): 11.
31. Ibid., 36; Study Group of Topics on Tax Collection and Management, "Reform of Tax Collection and Administration in the Nation and Related Situations," Shuishou yanjiu ziliao (Materials for Taxation Research), no. 53 (1992): 11.
32. Shanghai jingji nianjian 1987, 627.
33. Interviews #9502-0203, #502-0205, #9502-0206, #9502-0210, and #9502-0214. The scope of the actual tax concessions conferred by the district and county tax offices was derived by synthesizing the information provided by interviewees in SOEs. No official document is publicly available on this power delegation which alluded to the actual scope of authorization by SMTB.
34. Barry Naughton, Crowing Out of the Plan: Chinese Economic Reform, 1978-1993 (New York: Cambridge University Press, 1995), 250-65.
35. Chen Yizi, Zhongguo: Shinian gaige yu bajiu minyun (China: A decade of reform and the 1989 pro-democracy movement) (Taipei: Lianjing chubanshe, 1990), 123-50.
36. Naughton, Growing Out of the Plan, 274-76.
37. Chen, Zhongguo: Shinian gaige yu bajiu minyun, 204-6.
38. "The Method for Managing Tax Reductions and Exemptions by the Municipal Taxation Bureau of Shanghai," Shanghai caishui (Public Finance and Taxation in Shanghai), no. 108 (1990): 40.
39. "Several Rules on the First Wave of Cleansing and Rectifying Tax Reductions and Exemptions," ibid., no. 109 (1990): 26.
40. Shanghai jingji nianjian 1990, 455.
41. Yasheng Huang, "Administrative Monitoring in China," The China Quarterly, no. 143 (1995): 837-38.
42. Shanghai jingji nianjian 1991, 9-10.
43. See note 33 above.
44. Interviews #9502-0104 and #9502-0207.
45. Yasheng Huang, The Politics of Inflation Control in China: Provincial Responses to Central Investment Policies, 1979-1989 (Ph.D. dissertation, Harvard University, 1992; available at Ann Arbor: University of Michigan Microfilms International, 1992).
46. Ibid., 256-57.
47. Naughton, Growing Out of the Plan, 281-87.
48. State Statistical Bureau, Zhongguo tongji nianjian 1994 (Statistical yearbook of China 1994) (Beijing: Zhongguo tongji chubanshe, 1994), 34.
49. Literally, Pudong means "east of the Huangpu River," standing in contradistinction to the city's western part of Puxi, which literally means "west of the Huangpu River" and has traditionally been the heart of Shanghai.
50. World Bank, China: Internal Market Development and Regulation (Washington, D.C.: World Bank, 1994), 248; Tian Gang, Shanghai's Role in the Economic Development of China: Reform of Foreign Trade and Investment (Westport, Conn.: Praeger, 1996), 52.
51. World Bank, China: Internal Market Development and Regulation (Washington, D.C.: World Bank, 1994), 248; Tian Gang, Shanghai's Role in the Economic Development of China: Reform of Foreign Trade and Investment (Westport, Conn.: Praeger, 1996), 52.
52. Pu Dengxian, "On the Economic Efficiency of High- and New-Technology Industries Developed by Shanghai," Shanghai jingii (Shanghai's Economy), no. 151 (1994): 33.
53. Interviews #9502-0203 and #9502-0205.
54. Ministry of Finance, Zhongguo caizheng nianjian 1993 (Fiscal yearbook of China 1993) (Beijing: Zhongguo tongji chubanshe, 1993), 223-24.
55. Shanghai jingji nianjian 1992, 404.
56. The document was titled "Circular Regarding the Strengthening of Tax Management and Strictly Controlling Tax Reduction and Exemption." See Shanghai Academy of Social Sciences, Shanghai jingii nianjian 1993 (Shanghai economic yearbook 1993) (Shanghai: Shanghai jingji nianjian chubanshe, 1993), 403.
57. Interview #9502-0101.