Author：John L. Mikesell, Alfred Tat-Kei Ho, Jun Ma & Meil
Date：2009-11-10
Summary：
The People's Republic of China is in the process of substantial economic, social, and demographic change. A great population shift from rural to urban areas has accompanied increased industrialization and greater prosperity in the country. During the period of 1978 to 2006, the percentage of urban population in China has increased from 17.9% to 44.9%.1 These changes have brought new pressure on localities for delivery of government services, particularly in urban areas. Localities must respond to their citizenry with expanded and enhanced services and must, accordingly, find ways to finance those services. New prosperity brings new demands and, in light of the centralization of finances that occurred in the mid-1990s, transfers from the central government must constitute part of these finances. But using local fiscal resources has many advantages in terms of allowing greater responsiveness, flexibility, and incentives for efficiency in delivery of services that are of greatest interest to the local population. This project examines the institutional arrangement and politics of the infrastructure financing mechanism, analyzes the issues related to “extra-budgetary” revenues and control, and provides recommendations regarding the current system of capital budgeting and financing by the Chinese government. By developing an in-depth understanding of these finances in Guangdong Province, it will be easier to analyze the conditions elsewhere and to devise responsive strategies to deal with the process of urban development.
Keywords：public finance; infrastructure
