Quick questions on Centre-local relations explained: H2 China Studies

China is formally a unitary, centralised state, yet in practice it governs an enormous and varied country through multiple administrative tiers, provinces, prefectures, counties and townships, that carry out much of the actual work of government. A defining feature of the reform era has been the substantial devolution of economic decision-making to these local levels, even as the Party kept ultimate political control, above all over the appointment of officials. The result is a distinctive combination: political centralisation paired with economic decentralisation.

A central argument is that local autonomy was the engine of China's reform success. Devolving economic initiative created intense competition among localities to attract investment, build infrastructure and grow their economies, because officials' careers depended on local performance. It also enabled China's signature method of reform: experimentation. New policies, the early household responsibility system in agriculture, the special economic zones, were piloted locally before being generalised nationally, allowing the centre to learn from local trials and to "cross the river by feeling the stones."

The same arrangement produced serious distortions. Because local officials were rewarded above all for delivering rapid economic growth, the incentive structure encouraged over-investment, excessive construction, the neglect of environmental and social costs, and a focus on quantity over quality. Localities competed by building industrial parks, property and infrastructure, sometimes far beyond real need, contributing to over-capacity and waste. The promotion tournament that drove growth also drove its excesses.

Under Xi Jinping the balance has shifted back toward the centre. The anti-corruption campaign disciplined local officials and reasserted central authority over them; central inspections, tighter control of local debt, and a general drive to ensure that local actors follow the central line have all strengthened the centre's hand. This recentralisation is the system correcting the excesses of the decentralised model, though it risks dampening the local initiative that drove earlier growth.

Explain what is meant by combining political centralisation with economic decentralisation in China. [4 marks]

Explain how the 1994 tax-sharing reform contributed to local-government debt. [12 marks]

"Decentralisation has done China more harm than good." How far do you agree? [20 marks]